Budget (No. 2) Bill: Second Stage

Part of Executive Committee Business – in the Northern Ireland Assembly am 4:30 pm ar 2 Gorffennaf 2024.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Caoimhe Archibald Caoimhe Archibald Sinn Féin 4:30, 2 Gorffennaf 2024

No, I will not.

Mr O'Toole also mentioned that the June monitoring round provided no strategic plan and did not set out how issues such as waiting lists would be addressed. In-year monitoring rounds do not set long-term strategic plans; they allocate any funding that has become available in-year and consider any emerging issues. The June monitoring round provided allocations to help mitigate the worst impacts identified by Departments, and that will provide the clarity that is needed to allow Departments to plan effectively.

Mr O'Toole also highlighted a number of cases where expenditure relies on the sole authority of the Budget Act. I agree that it is important that Departments take steps to ensure that that spend is regularised as soon as possible. I know that the development of a financial provisions Bill, which is being taken forward by my Department, will address a number of the issues listed. Likewise, my Department is working on legislation that relates to the Fiscal Council.

Mr O'Toole referred to RRI borrowing, as did a number of other Members. As the Member will be aware, the Executive fully utilised the £220 million of RRI borrowing available to them in the 2024-25 Budget. The level of RRI borrowing will grow in line with inflation until 2028-29 as a result of the financial package. It will be for the Executive to decide how to make best use of that borrowing in future Budgets in the context of a Programme for Government and an investment strategy.

Mr O'Toole and a number of other Members rightly highlighted the important role that Committees play in the Budget scrutiny process. I encourage all Departments to ensure that they fully engage with their Committees as part of that process.

Mr Tennyson and Mr Elliott spoke about climate change priorities not being reflected in the Budget process. While some Departments had submitted bids for climate change, given the constrained financial position, I did not ring-fence any allocations specifically for that purpose. That is not reflective of the priority that I consider should be attached to climate change; rather, it reflects the intention to provide Departments and Ministers with maximum flexibility to manage their budgets. As climate action is so far-reaching, as Mr Elliott also said, it should be a consideration right across spending areas in Departments. I encourage my Executive colleagues to consider their statutory obligations in the Climate Change Act when prioritising expenditure within the funding envelopes that have been provided to their Departments. Once the Programme for Government priorities are agreed, which may include climate requirements, consideration will be given to how those priorities may be best reflected in the subsequent Budget process. Any decision on prioritising the climate in the Budget will, however, be for the Executive in what will likely be a continually strained fiscal environment.

Ms Bradshaw, in her contribution as the Chair of the Committee for the Executive Office, asked how the Department could plan effectively in the absence of certainty on its funding. I appreciate that the absence of a multi-year Budget may mean that Departments do not have longer-term certainty on their budgets. Unfortunately, I am constrained by the period of the Treasury spending review, as Members will be aware. I have expressed my commitment to multi-year Budgets where possible. Departments, however, have certainty over their budgets for the current financial year, as agreed by the Executive on 25 April. The funding envelope for each Department has been set. The guidance is clear that that must be regarded as the ceiling, and Departments must plan to live within that amount. Departments may, of course, bid for additional funding through the in-year monitoring process, but they cannot assume that funding will be provided.

Mr Brett, in his contribution, asked how Departments will be able to meet public-sector pay pressures in the coming year. I fully acknowledge the vital role of public-sector workers in delivering public services on a daily basis. As the Member will be aware, I got the agreement of Treasury that £688 million could be used in 2023-24 to enable Departments to meet public-sector pay awards. However, it was clear to all Ministers that, in setting the 2024-25 Budget, Departments would have to manage the cost of any pay awards within the budget allocated to them, because the financial package did not have a recurring amount of money for public-sector pay.

Mr Brett also asked about the RHI business case. The Department for the Economy submitted a business case addendum to my Department in November 2023. The addendum proposed an uplift in the non-domestic RHI tariffs that were set in 2019. Following engagement between my officials and their counterparts in DFE, my Department has approved the expenditure associated with the revised tariffs.

I am aware that the Economy Minister is also working towards securing the Executive's agreement to close the non-domestic RHI scheme. Given that DFE is the lead Department on energy policy and the operation of the non-domestic RHI scheme, responsibility for the business case rests with his Department.

Deborah Erskine asked when the next Budget process will begin and whether it will be a multi-year Budget process. I aim to begin work on the next Budget as soon as possible after the election, once we have clarity around the timing and scope of the next spending review. As the Member will be aware, whether that results in a multi-year or single-year Budget will depend on decisions taken by the new Chancellor. I have repeatedly made the case to the Chief Secretary to the Treasury and the shadow Secretary of State that our preference is most certainly for a multi-year Budget. I am sure that Members, like me, have been following the media commentary on that. It is not exactly clear whether we will get a one-year or a multi-year Budget. My preference most certainly is for a multi-year Budget.

Mr Chambers made a number of comments about the Department of Health's budget. I put on record again that I wish that I had been in a position to give the Department of Health more money in the Budget and the June monitoring round. It is the same for all Departments. We are constrained by the funding envelope available to us. I must, however, reject the assertion that Health was not prioritised. It got over 50% of the amount of money available to us for allocation in the Budget process, and it got 57% of the money available for allocation in the June monitoring round. Therefore, it is disingenuous to say that the Executive have not prioritised Health. In fact, over the past three years of the current spending review, there has been a £1·6 billion uplift in the Department of Health's baseline.

Mr Beattie's contribution reflected his view that the Department of Health needs a 6% uplift, year-on-year. It got a 6·3% uplift this year. I recognise, however, the huge challenges for all those people who are on waiting lists or trying to access GP appointments and those who work in our health service. It is really important that we, as an Executive and an Assembly, collectively make the case that we need to see proper investment in all our public services. Certainly, I will make that case to the incoming Government as soon as we know who that will be.

Mr Durkan made a number of comments about the level of scrutiny in the Budget Bill process. The Member will be aware that it is normal to obtain accelerated passage for the Budget Bill. It always needs to be taken through the Assembly by accelerated passage, because it must always be written to the Executive's most-up-to-date spending plans. Failure to do so risks Departments running out of cash before the new Bill is introduced. The need for accelerated passage is in line with the approach taken to equivalent Bills in other jurisdictions.

Mr Durkan spoke at some length about the things that have not been funded in the Budget. I am sure that he recognises the pressures facing our public services, which are very well rehearsed at this point. It is easy to say where more money is needed — we could all do that — but it is not so easy to identify where money can be found. We would all like to provide more funding for our hard-pressed public services, but the Executive must live within the funding available to them. The amount of funding is higher than before, due to the agreement of the interim fiscal framework. I intend to build on that as we agree a final fiscal framework. I have also made, and will continue to make, the case for additional funding for public services, as I reflected to Mr Chambers.

I have covered many of the points. Diane Dodds referred to the need to deliver efficiencies in Departments. That point was well made, and many of us agree with that. I have been on record as saying that we aim to put our finances on a more sustainable basis. It is important that we look at all opportunities to deliver efficiencies, generate revenue, look at further borrowing powers and explore further fiscal devolution.

Mr Tennyson also referred to the devolution of fiscal powers. I do not disagree with him about the need to look at that with some degree of urgency. He will be aware — I have said this to him a couple of times today — that I have recently established a budget sustainability team and a fiscal team that will take forward that piece of work. The number of officials in my Department who work on those issues is small, and they have had an awful lot on their plate in the past months, but we are giving significant attention to the budget sustainability plan and to being in a position to negotiate the future fiscal framework. He will also be aware, however, that we, as an Executive, will have to take a position in any negotiation on fiscal powers, so I will bring to the Executive, in the near future, recommendations based on the consultation on the work of the Fiscal Commission.

I will draw my remarks to a close. I have tried to respond to Members on as many of the issues that have been raised as possible. As always, the debate has been useful, with many points being raised, and I thank Members for their contributions. It is imperative that the legislation debated today continues its passage through the Assembly so that public services continue to be delivered to our citizens. I ask Members to support the Budget (No. 2) Bill, thereby authorising spending on public services by Departments in 2024-25 and the Excesses identified by the Public Accounts Committee.