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 4492795

Read the official Assembly record

Text

Thank you, Mr Deputy Speaker. I thank all the Members and Committee Chairs for their participation in the debate. I thank the Members who were supportive of the Budget proposals for their input, and I have listened with interest to Members who have spoken against the Budget. I intend to use most of my time to respond to as many of the useful and constructive issues raised by Members as possible. The leader of the Opposition highlighted, as did other Members, the issue of multi-year Budgets. Colleagues will be aware that I have said numerous times that my preference is for a multi-year Budget. I am keen to be in a place where we are able to set a multi-year Budget to maximise Departments' abilities to plan. However, as I have also said many times, this is the final year of the current spending review period, so it is not possible to set a multi-year Budget at this point. That is set out in legislation. Unfortunately, that prevents Departments from being able to plan more effectively. Treasury has made it clear that a spending review will take place after the general election, which has been set for 4 July. What is not clear at this point is whether that will be a single- or multi-year settlement, although I have made the case to Treasury and to the shadow Secretary of State that the preference of the Executive and all parties here is for multi-year Budgets. Mr O'Toole also raised the issue of the Fresh Start funding. I reiterate that the decision was taken by Treasury to un-ring-fence any money that was repackaged into the financial package. I am sure that the Member is aware that that money was then made available to the Executive as resource funding. To convert that back into capital would have meant £150 million less for day-to-day spending. Following a request by the Education Minister, the Executive agreed to provide £150 million over the next three years to build the Strule Shared Education Campus, which was previously a Fresh Start project. The Budget includes the first £20 million of that, and that was based on what DE has profiled to spend in this financial year. While the Fresh Start funding is no longer available to take forward the other shared and integrated education projects that are not already in contractual commitment, the Education Minister has confirmed that he will include those in his prioritisation for his Budget allocation. I am sure that the Member will agree that the £150 million from Fresh Start would only have gone so far in the delivery of those 11 projects. Mr O'Toole mentioned Casement Park. As all Members will be aware and as has been referred to, it is an Executive flagship project. The bid from the Department for Communities for this year was met in full. The Casement Park project can deliver huge sporting, economic and social benefits across our communities. It needs to be delivered, and it is unthinkable that that would not happen in time to host Euro 2028. My Department has received a strategic outline case on the subregional stadia programme that my officials are considering. As recently as last Friday, the Prime Minister reiterated that the British Government would make a significant contribution to the redevelopment of Casement Park. They need to get on and clarify as soon as possible what that contribution will be.

Sure.

The Member will be aware that the Communities Minister is leading on Casement Park. I have written to the Communities Minister offering any support necessary from my Department and officials to move the project forward. I am open to any suggestions from him about how to move it forward. Mr O'Toole mentioned revenue raising. I have always been clear that the Executive will consider all options, including efficiencies, generating revenue, additional borrowing and further fiscal powers. That will continue to be part of the negotiations with Treasury on the final fiscal framework. Mr O'Toole mentioned that, in his view, the Budget lacks strategic priorities. Of course, the correct place to set the Executive's priorities is a Programme for Government. I am certainly of the view that we want to take that forward as quickly as possible. The Executive have been clear that they want to progress it as quickly as possible. However, we have to agree a Budget as early as possible to allow Departments to plan effectively.

I want to make some progress, please. As I set out, the Budget reflects, as far as possible, the priorities of the Executive. It was developed in just three months from the Executive's return and in a challenging financial position. The interim fiscal framework will set out the scope of the sustainability plan, which my Department is working on at pace and which will include input from other Departments. I have heard Members from the Opposition criticise the Budget today. It is easy to point to the problems, but there are fewer solutions to come by. I have yet to see or hear the Opposition provide an alternative Budget or a plan for how to move things forward. Steve Aiken, Liz Kimmins and a number of other Members mentioned the Department of Health's budget. Mr Aiken remarked that the Department of Health has always received more than 50% of the available Budget. That is not the case; in fact, the share of the overall Budget allocated to Health has grown slowly and inexorably over time. Since the Executive returned in 2020, the Health baseline has increased by £2 billion. While some have highlighted my party and other parties' manifesto commitments to an additional £1 billion for Health over the spending review period, Health has, in fact, received a £1·6 billion uplift to its baseline funding over that period. I fully agree that Health needs more money, as do all Departments. The British Government need to provide the Executive with a sustainable level of public finances. Public services here are suffering because that is not happening. Of course, my job, as Finance Minister, is to balance all the asks and ensure that all Departments can deliver the public services within their responsibility.

I want to make some progress, please. There remains an onus on the Department of Health, as the biggest spending Department, to continue to transform and improve productivity in the delivery of its services. Approximately £1 billion in resource DEL was available for allocation to all Departments. It simply was not realistic to meet all the pressures of one Department, given the number of bids being made by all Departments. The Department of Health has been allocated 51·2% of the overall resource DEL funding available, a 6·3% uplift from the opening position of 2023-24.

I am sure that I could explain why there are differences between the North and England, Scotland and Wales and the South. We faced a really challenging Budget, and, as I said, the bids that came in from all Departments greatly outweighed the money to be allocated. It was a case of having to balance up and get some money to all Departments. We tried our best. Do I think that we put enough money into any Department? No, I do not. That is why I continue to make the case to Treasury that we need proper investment in our public services. Every Department asked for more than it received. Mr Aiken said that the Budget should be delayed in order to allocate the additional funding that is likely to become available from Westminster Main Estimates. Perhaps the Member was not listening when, in my opening remarks, I explained that that approach is prohibited by the 1998 Act and that, even if it were possible to do that, it would carry the significant risks that I also outlined: the risk of overspends; the risk of worse impacts from decisions later in the year; the risk of the Vote on Account being exhausted; and the risk of £559 million having to be repaid next year. I have to say that I am not clear on what the Member or his party hope to achieve by delaying the Budget. As he said, the funding will be allocated in June monitoring. That will allow Departments to properly identify the impact of their funding envelope and develop bids accordingly. It will also allow the Executive to properly assess those bids in the context of competing pressures across all Departments. The Department of Health will be able to engage in that process in the same way as every other Department. Calls to delay the Budget —

I would like to continue to make some progress. Calls to delay the Budget appear to be an excuse to avoid taking challenging decisions. We do not have that luxury. Colm Gildernew mentioned the budget for Supporting People. The Supporting People programme assists some 19,500 vulnerable people each year to live independently and is an important element of the Department for Communities budget. That funding is recognised as a preventative intervention that reduces the potential for greater costs to fall on the health and justice sectors. It is a demand-led service that has been under pressure as a result of increasing homelessness. The Communities Minister bid for £12·6 million for the programme, and it will now be for him to allocate his resource budget to take account of that important priority. Paula Bradshaw asked about the Executive bureau in Beijing. TEO is responsible for implementing the Executive's international relations strategy. As part of that, TEO utilises £365,000 of its budget to fund the Executive's Beijing bureau. It is approaching its tenth year in operation and has made a significant contribution to the development of relationships with China. TEO and many Departments and agencies have worked and are working closely with the consulate to support initiatives to build relationships. Phillip Brett and Cathy Mason mentioned the EA pay and grading review, and other Members raised that in the course of the debate. The Executive agreed that I would write to the British Treasury to seek agreement to re-profile the Executive's future years funding in order to fund the full implementation of the non-teaching pay and grading review for education support staff. The Education Minister wrote to me confirming the cost sought for re-profiling, and my officials and I engaged with the British Treasury to make that case. I formally wrote to the Chief Secretary to the Treasury on 17 May, and I raised it with her when we met last week. The request remains with Treasury for it to address. Mr Brett also raised RHI tariffs, the closure of the scheme and AME funding. The non-domestic RHI scheme continues to be funded through ring-fenced and capped AME budget set as a population proportion of the funding for the equivalent scheme in England. The Department for the Economy submitted a business case addendum to my Department for the uplift in tariffs in November 2023.

DFE subsequently confirmed to my Department that an Executive view was necessary regarding the future of the scheme before the work was progressed. As DFE is the lead Department on energy policy and the operation of the non-domestic RHI scheme, responsibility for the business case rests with that Department, and my officials continue to engage with their counterparts on that.

Colin McGrath raised the issue of the budget for the community and voluntary sector. Again, I recognise that the sector and its organisations are experiencing significant increases in demands for their services, including for advice and support at a time when rising costs are impacting on organisations and their ability to continue to meet demand. The Communities Minister bid for some additional money in the 2024-25 Budget, and, again, it will be for the Communities Minister, as with all other Ministers, to prioritise his budget and the programmes in it. Of course, Ministers will have the opportunity to bid for further funding allocations through the in-year monitoring rounds. Mr McGrath seems to have more faith in an incoming Labour Government than I do, and he thinks that we could do better with the Budget that we have. The question that I pose to anybody who criticises the Budget is: where would you take the money from to give it to somebody else? I give the Departments the money and they decide how to spend it, but there was a limited pot of money to allocate. I have yet to hear any proposals on where I should take that money from. Mr Swann talked about the reduction to the Department of Health's budget and compared the end of 2023-24 with the start of 2024-25. That is not a like-for-like comparison, as has been repeated numerous times. Additional funding is frequently provided in year. The Department of Health also received £80 million of transfers from Whitehall Departments in 2023-24, and I assume that the Department of Health will receive similar transfers this year. We are already talking about the in-year monitoring money that will be allocated in June, so it just does not stack up to compare the end of the year with the start of the year, and talking about a 2·3% reduction is misleading. The only true comparison with the end of 2023-24 will be the end of 2024-25. Mr Swann also talked about how unrealistic it was to provide funding for pay in 2023-24 and not recover those costs this year. When asking the Executive to agree the final plan for 2023-24, I highlighted the fact that the same level of funding would not be available this year. Indeed, that would have been clear to everyone. The financial package provided over £1 billion in 2023-24 and £520 million in 2024-25. It was for each Minister to decide what was affordable for the pay awards within their control in the knowledge that funding would be lower in 2024-25. Mr Swann also complained that the Department of Health only received £34 million specifically for waiting lists. That is true: I did not ring-fence additional money in order to give the Health Minister the maximum flexibility to manage the full £7·8 billion resource DEL Health budget. Mr Swann has said a number of times that Departments did not bid on the same basis. That is true, despite guidance from my Department. Some Departments were cognisant of the funding available and competing pressures and minimised their bids, but others bid for everything possible. Some Departments followed the guidance and did not bid for pay costs, but others, such as the Department of Health, did. Some Departments broke their bids down into discrete areas, but others added a number of bids for different purposes together to present a large number of inescapable pressures. That is why Departments did not simply receive a proportion of their bids, nor did they receive an allocation based on their proportion of the block. Instead, an assessment was made of the best way possible to allocate the limited resources that were available. That approach gave the Department of Health half of what was available for general allocation. Frankly, it is utterly incoherent to resign, ostensibly in protest against the Budget, on the eve of an election campaign, only for your party to then appoint your colleague to the position. What message does that send? The public will make up their own minds. Declan McAleer and Tom Elliott both spoke about the challenges facing the Department of Agriculture, Environment and Rural Affairs, highlighting the challenges that the Executive faced in setting this Budget. Mr Elliott also raised climate change, an issue that he has raised with me a number of times. Under section 52 of the Climate Change Act 2022, all Departments are required to exercise their functions in a manner that is consistent with achieving emissions targets and carbon budgets. Given the constrained financial position, I did not propose earmarked allocations for climate change in the Budget. That was not reflective of the priority that should be given to climate change, but rather to reflect the intention to provide Departments with maximum flexibility to manage their budgets. Indeed, as climate change is so far-reaching, it should be a consideration across all areas of spend in Departments. Joanne Bunting and Stewart Dickson outlined their concerns about the Department of Justice budget. I fully agree that the Department of Justice needs more money. We tried to reflect that in the Budget allocations that were made. It received the third-largest allocation in relation to the money that was available to us. As I have said many times, including in the course of this debate, the limited funds meant that no Department got what it wanted. I have listened to the concerns of the Justice Minister. I hope that she will recognise that I have tried to work with her constructively, and I will continue to do so. I fully intend to work as constructively as possible with Mr Nesbitt when he takes up his role as anticipated later today. He highlighted the potential to delay the vote because Departments have a 65% Vote on Account. I have already set out in the course of the discussion that the 65% Vote on Account was based on the assumption of Royal Assent for the next Budget Bill in September. If we delay this vote and the introduction of the next Budget Bill, there is a risk that Departments could run out of cash on the basis of the Vote on Account that was taken. I want to put on record that I agree with Sian Mulholland's comments around the arts, which are not just nice-to-haves. We need to invest in our artists and creatives, not just because they contribute significantly to our economy but because they are beneficial to our communities, particularly in a society like ours that is emerging from conflict. Mr Allister made some comments about parties going back into the Executive without clarity or sufficient funds. Time and again, my party has said that the best place to negotiate with the British Government and with Treasury was in an Executive, with a Finance Minister and the First Minister and deputy First Minister negotiating with the British Government. That is exactly what has been borne out over the past couple of weeks. I will bring my remarks to a close. It is the responsibility of a Finance Minister to bring Budget proposals before the House. It is a responsibility that I take seriously. I want to, and intend to, deliver for all our citizens. On that note, I commend the Budget to the Assembly.

3,099 words. Text as published by the Northern Ireland Assembly.

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