Debate contribution: Budget 2024-25

Debate contribution by Dr Caoimhe Archibald on 28 May 2024.

MLA

Dr Caoimhe Archibald

Party at the time

Sinn Féin

Date

28 May 2024

Type

Debate contribution (made as a minister)

Business

Executive Committee Business

Heading

Budget 2024-25

Assembly identifier

Official Report component 4492165

Read the official Assembly record

Text

I beg to move

The restoration of the Executive on 3 February meant that there was an exceptionally tight time frame in which to develop the Budget. Despite the financial package that accompanied restoration, it was always clear that this was going to be an incredibly challenging Budget. The time frame for this Budget process did not allow for the full level of engagement that I would have wanted. My strong preference would have been to publish a draft Budget and put it out for a full 12-week consultation, and the results of that consultation would then have informed the Executive's decisions on their final Budget. Unfortunately, that was not an option; there was simply not enough time to do that. However, that is the approach that I intend to take going forward.

One-year Budgets do not create the circumstances and conditions to strategically plan the delivery of public services. To deliver the necessary change in how our services are funded and operated, we need multi-year Budgets. That was not possible though, as this is the last year of the current spending review period. Ideally, a Finance Minister would present a Budget to the Assembly before the start of the financial year on 1 April. From a practical perspective, it was imperative that Ministers were given time to consider their Departments' priorities and financial position before considering Budget proposals. To allow for that, after discussion, the Executive agreed a short extension to the end of April for the agreement of a Budget. That target was achieved by the Executive, with a Budget being agreed on 25 April. It was not easy, and everyone around the Table had to compromise, but it paved the way for this important debate to happen before summer recess. Of course, time was not the only challenge that the Executive faced in setting the Budget. As has been widely publicised, demand outstripped the funding available many times over. For every pound we had to allocate to day-to-day spending on public services, we had three times as many demands. Similarly, for every one pound available to spend on capital, including money for hospitals, schools and roads, we had one and a half times as many demands. With increased demands on services and rising costs, the Executive simply do not have the Budget to do everything they wish to do to provide the public services that people expect and deserve. Many in the Chamber can tell Executive Ministers where to spend money. However, they rarely provide a proposition outlining where they would take the money from to make that happen. Simply put, additional funding for one area means less funding for another. As Finance Minister, I have tried to build consensus and focus on what we can do together, and I will continue to work with all Ministers in the Executive to meet the challenges that we face. Articulating problems is easy. However, working together to address them is what we were elected to do. I will keep working in partnership with all Ministers in the Executive to meet the challenges that we face and to continue to make the case for better funding for public services. For over a decade, the austerity agenda of the Tories has devastated public services. That will not be corrected or fixed simply by being funded at a level of relative need. What we need is more funding for public services. The Executive are united on that, and I will continue to fight for it. I will take the fight to whomever is elected as the next British Government that our public services need additional investment to deliver for those who rely on them: for people on waiting lists; to make childcare more affordable; to invest in special educational needs; and for much-needed investment in our schools, hospitals, roads and environment. I will have the backs of our hard-working public-sector workers and work to deliver for all our citizens. I have established and developed relationships with Treasury, and it is acutely aware of our position and our determination to ensure the best possible outcome for the Executive. Last Tuesday, I signed an interim fiscal framework with the Chief Secretary to the Treasury that secured a number of concessions. A Joint Exchequer Committee has been established, which reflects arrangements in Scotland and Wales and is an important step towards agreeing a final fiscal framework. A commitment to review the Executive's funding approach before the 2026-27 Budget was agreed. Importantly, it recognises that the Executive will continue to plan on the basis that they will be funded at or above the 124% level of relative need in future financial years. That means that concerns over falling off a cliff edge once the financial package ends in 2025-26 can be tempered. The interim fiscal framework will also see the 24% needs-based factor applied to new Barnett consequentials from the time that the Executive were restored, rather than from the beginning of the 2024-25 financial year. That means an additional £24 million for the Executive from the spring Budget announcement alone that will be available in June monitoring. Some might say that £24 million is a drop in the ocean, given the scale of the pressures that we face, but we operate in a system where every pound matters. The needs-based factor will also apply even if the financial package brings the Executive's funding level above the level of relative need. That means that additional funding will be available from any Barnett consequentials in 2024-25 and 2025-26. I plan to bring recommendations on the June monitoring round to the Executive at the end of June. Although I cannot provide certainty until the Westminster Main Estimates process concludes, it is likely that significant additional funding will be provided to the Executive through that process. I had expected —.

I will come back to you. I had expected — in fact, I was told — that the Westminster Main Estimates would be introduced before June monitoring, thereby providing certainty on the funding available. However, as per usual, the Tories prioritised self-interest by calling a general election, which has prevented that. We had initial indications from Treasury on the funding that was to be provided. While there is, of course, the potential that an incoming Government will make different decisions, it is important that the additional funding is provided to Departments at an early stage to give them the ability to plan and make decisions. Therefore, the June monitoring round will proceed to the intended timescale and assumptions will be made on the funding available on the basis of previous Treasury indications. I am aware that some believe that the Budget should be delayed to allow the additional allocations to be included. However, Assembly approval of the Budget cannot be delayed. Not only is such an approach not permitted under section 64 of the 1998 Act but it would carry real risks. There would be a risk of overspends, as Departments would be delayed in taking decisions to live within allocations, and, worse still, it might lead to decisions being made later in the year and having harsher impacts on citizens. Any delay in agreeing a Budget would have a corresponding impact on the Budget Bill and Main Estimates. The 65% Vote on Account was based on Royal Assent being obtained in September. If the Bill could not be introduced until after the summer recess, it would bring a real risk that Departments would reach the limit of their Vote on Account. I cannot contemplate a situation where Departments could be unable to access cash to deliver services. I caution those who are minded to do that to think through the consequences of their actions. If a balanced Budget is not agreed, the write-off of £559 million that is provided in the financial package is potentially at risk. The repayment of such an amount would severely impact on our Budget for 2025-26. Therefore, we simply cannot delay Assembly approval. Work on a Programme for Government is ongoing, but the Budget reflects the views and priorities of the Executive: for example, setting aside £25 million to support a childcare strategy. Affordable and accessible childcare is a priority for the Executive, and, despite the challenging context, it was important to reflect that in the Budget. Of the funding that was available for allocation to general pressures, over 90% went to three Departments: Health, Education and Justice. Indeed, the Executive demonstrated their commitment to Health by allocating it over half of the overall resource departmental expenditure limit (DEL) available. That sees Health baseline funding increase by £1·6 billion over the three-year period of the spending review. Public-sector workers deserve to be paid fairly for their dedication and the services that they deliver for citizens daily. The Executive recognised that priority by agreeing a final Budget position for 2023-24 to allow pay negotiations to begin within two weeks of restoration. The Executive continue to recognise pay as a priority. Following the approach that I set out to my Executive colleagues, in order to allow pay to be settled more quickly than in recent years, my Department will now write to Departments to formally communicate that public-sector pay policy. Given the ongoing budgetary constraints, that policy will maintain that 2024-25 pay awards must be affordable within each Department's Budget settlement. It is also clear that the principle of fairness must apply to all workers. Consideration must be given to how awards can be targeted to address low pay and the payment of the real living wage. The Budget also provides for £2·1 billion of capital expenditure by Departments, including funding for previous Executive commitments, such as flagship projects and city and growth deals. Now that Ministers have their funding envelopes, it is for them to prioritise spending. That will undoubtedly mean difficult decisions for all Departments. In line with previous Equality Commission advice, the Executive were provided with departmental assessments of the potential equality impacts of Departments living within the baseline and of bids, if met, in considering Budget 2024-25. It is now for Departments to carry out equality impact screening and/or assessments in line with their equality schemes. The outcomes of those screenings and assessments should assist Ministers with their choices. It is my intention to bring the results of those screenings and assessments to the Executive as part of the October monitoring round. That will allow the Executive to give due regard to their section 75 duties by considering whether any changes to funding allocations are required. Despite the challenges that the Executive faced in delivering Budget 2024-25, it provides certainty for Departments to allow them to plan and maintain the delivery of public services and to support local businesses, workers and families. I commend the Budget to the Assembly.

1,798 words. Text as published by the Northern Ireland Assembly.

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