Debate contribution: Budget 2025-26

Debate contribution by Mr John O'Dowd on 7 April 2025.

MLA

Mr John O'Dowd

Party at the time

Sinn Féin

Date

7 April 2025

Type

Debate contribution (made as a minister)

Business

Ministerial Statement

Heading

Budget 2025-26

Assembly identifier

Official Report component 4890298

Read the official Assembly record

Text

Go raibh maith agat, a Phríomh-Leas-Cheann Comhairle.

Thank you for the opportunity to make a statement on the final Budget 2025-26. The Executive agreed their final Budget for 2025-26 on 3 April, and I made a written ministerial statement on the same day. Given the pressures that the Executive faced and the limited resources available, the Executive have strived to provide a Budget for 2025-26 that focuses on providing funding for the delivery of our Programme for Government (PFG) priorities. We have considered the consultation responses from our stakeholders, organisations and citizens alike. The Budget reflects our Programme for Government commitments and shows the Executive's determination to work together to deliver. The Budget includes £16·8 billion of investment in public services, plus £2·4 billion in capital spending, with Health receiving £8·5 billion; Education £3·3 billion; and Justice £1·4 billion. That means that those three Departments alone account for some 80% of the funding for the day-to-day spending that is available, providing vital funding for our health service, schools, policing and the wider justice system. It sets out the direction of travel, which shows that the Executive are prepared to do things differently and use our limited resources to do what matters most. We all know someone on a waiting list — a mother, a father, a child or a grandparent. The Budget will mean £215 million going towards cutting health waiting lists and supporting investment in elective care, with £165 million of that earmarked in Health’s final Budget settlement and a further £50 million to be provided in June monitoring. Our children are the future, and we must invest in them. The Budget doubles our investment in the early years and childcare strategy to £50 million, with a commitment to provide a further £5 million in June monitoring to support our children and help hard-working families. It provides an additional £15 million for special educational needs (SEN) and delivers a further £8 million for skills, bringing the total to £15 million to build the skills needed now and in the future to grow our economy. The Budget provides an additional £5 million to make our communities safer and £2 million towards ending violence against women and girls. It recognises the importance of Lough Neagh and our desire to protect it through a £5 million ring-fenced investment. It supports our agriculture, agrienvironment, fisheries and rural development with £332·5 million ring-fenced for this, recognising the importance of the sector to our economy and local farming communities. It also provides £21·3 million for transformation projects in health, justice, infrastructure and special educational needs and £100 million to create more social housing. In line with that commitment, we are also investing £105·7 million in water infrastructure. There is also a capital allocation of £12·3 million for the just transition programme, in line with our commitment on climate change. The Budget shows that the Executive are prepared to do things differently and prioritise the limited funding that we have available to make real change for the better in people’s daily lives. There is no doubt that the financial outlook remains incredibly challenging, particularly given the Westminster Government’s continued policy of austerity. The Chancellor’s spring statement continued the austerity agenda by choosing not to invest in public services and, instead, cutting benefits and targeting those most in need. It provided limited additional resources: £12·5 million resource departmental expenditure limit (DEL) and £1·6 million capital DEL for the Executive in 2025-26. That, together with the £146 million employers' National Insurance contribution support, will be included in the Executive’s DEL totals following Main Estimates in May/June, meaning they will be available for allocation in the June monitoring round. Given the need to provide Departments with the ability to plan, indicative June monitoring allocations for those funds have been agreed in the final Budget. As there is no additional funding for the final Budget, the allocations made were to distribute the funding held centrally at draft Budget and the unallocated financial transactions capital (FTC). Recognising the important work of our public servants, the draft Budget sets aside £26 million to meet the costs of the pay settlement for those on Civil Service terms and conditions. That pay award has now been agreed, and the funding has been allocated to Departments in the final Budget. Some costs are inescapable, and the Budget provides funding for the costs associated with the Open and for statutory salaries. To provide further support for the health sector and recognise the important role that family health services play, £3·5 million has been earmarked to provide support for the impact of National Insurance increases on GP practices, dentists, pharmacists and other family health service providers. The final Budget also gives each Department a general allocation to be used towards wider pressures, including pay and employer's National Insurance increases. The Executive gave a commitment to provide funding of up to £20 million capital on an equal basis to Education and Infrastructure, if it became available. Therefore, the final Budget provides both Departments with a general capital allocation of £7·7 million, with a further £1 million each as an indicative June monitoring allocation. The final Budget also sees the allocation of £8·4 million in financial transactions capital that remained unallocated in the draft Budget. The Department for the Economy will receive £6·1 million towards Invest NI capital grants to businesses, and the Executive Office will receive £2·3 million towards interest payments.

For the first time, the FTC funding has been oversubscribed, and with the DFE bid exceeding the available funding, an indicative June monitoring allocation of £1·1 million has been agreed to. That reflects the amount that will be carried forward from 2024-25.

There is no doubt that the Executive's finances remain under pressure. While the 2025-26 financial position remains challenging for all Departments, the Budget agreed by the Executive clearly prioritises their Programme for Government priorities, and, excluding earmarked allocations and in-year transfers, provides every Department with an uplift on its 2024-25 budget position. With the indicative allocations included, the Budget provides Departments with £19·3 billion funding. That money will be spent on running our public services and investing in our infrastructure. There will never be enough money to fund all our ambitions, but we can make a positive difference. Regrettably, it seems likely that the second phase of the spending review, which will be announced in June, will be a continuation of the austerity agenda that the Treasury is pursuing. On behalf of the Executive and the people whom we serve, I will continue to make the case for better funding not just for the Executive but for all public services. It is incumbent on us all to manage our budgets efficiently and effectively. All decisions should be taken with the intention of making things better, and every pound should be treated with the same care as that with which we would treat our own money. I will continue to work with Executive colleagues to support workers, families and communities. As Members are aware, I intend this to be the last single-year Budget, now that the Treasury has committed to undertaking a multi-year spending review. I believe that the introduction of a multi-year Budget will be a game changer, providing Departments with the ability to undertake longer-term planning. The five-year departmental financial plans will play a crucial role in that. Behind the figures of millions and billions of pounds are people and families. It is incumbent on all of us in the Chamber to work together to improve their lives and opportunities for the future. For now, I commend the final Budget 2025-26 to the Assembly.

Let us be very clear: the Executive have ring-fenced £215 million to tackle waiting lists. Be in no doubt about that. Things are going to be done differently. We cannot continue to be in a position of continually uplifting the Health budget and expecting different outcomes but not getting those outcomes. The Executive have made their position clear: we expect a different outcome from this Budget. We have ring-fenced £215 million of the Budget to start to tackle Health waiting lists. The Health Department has received over £200 million additional funding this year. What the Health Minister chooses to do with that funding is a matter for the Health Minister, but the Executive, in agreement with the Health Minister, have set out quite clearly what they wish to do. I took the time to read your press release on the Budget, Mr McGrath, which is entitled "Underwhelming". Yes, it is. It is also absent an alternative Budget. I look forward to reading his alternative Budget —

I look forward —

I look forward to reading his alternative Budget and seeing how the Member intends to deal with waiting lists.

The Executive made a conscious decision to redistribute the £158 million extra funding that they had as a result of Barnett consequentials in the way that they did. Around £50 million of that will go to tackling waiting lists; £8 million of it will go to tackling the skills deficit; £5 million will go to Lough Neagh; and £15 million will go to special educational needs. Those are priorities in the Programme for Government. I do not suggest for one second that the challenges faced by the sectors that you read out are not real; they are real. However, the Executive made a conscious decision to direct their limited resources in a certain way, and that was the correct decision. I will continue to engage with the Treasury. I have made a robust case to the Treasury, as have the other Administrations, that its funding mechanism for National Insurance contributions is unsatisfactory. We will continue to make that case. Ahead of the spending review, we will continue to make the case for a needs-based analysis for the Executive. The Executive continue to be underfunded significantly by the Exchequer and the Treasury.

The Executive continue to recognise the challenges that are faced on Lough Neagh. We also recognise that it will take considerable investment and time to correct the mistakes of the past. In the Budget, we have ring-fenced £5 million for the AERA Minister to engage with sectors and continue to take on the challenge of pollution in Lough Neagh, as is only right and proper.

No. A lot of work has already been undertaken, and Professor Holtham will have access to that research and data. I am confident that his report will be available in sufficient time for us to submit it to the Treasury ahead of the spending review. The case was originally made by the Fiscal Council. We continue to make that case, and Professor Holtham's work will add to it.

We took a conscious decision to allocate the funding in this way at this time. We cannot include it as part of the Budget spending, because we have yet to receive the letter from the Secretary of State confirming it — we are dealing with a number of technicalities here — but, in reality, £50 million is set aside for tackling health waiting lists. It is only right and proper that we inform the Health Minister that it is available now to allow him to plan for that spend from June. We have taken the appropriate action.

Again, that is a strategic investment by the Executive: we have almost doubled the investment in skills. In the draft Budget, it was £7 million. The Executive have taken a decision to increase investment in skills to £15 million. That is a huge boost for upskilling the current workforce, for bringing new workers into the workforce and for the economy.

My understanding is that it is from the A1. More details on the easement will be made available to the Member. How the Committee engages with the Department is a matter for the Committee and the Department. I have no concerns about the identified easement, however. The Department has a proven record of investing its limited resources — all Departments' resources are limited — in front-line services.

I have given Members the headlines about the additional funding that has been allocated to Departments as a result of Barnett consequentials and expected Barnett consequentials. The funding and the projects that were identified in the draft Budget stand. Departments' responsibility to outline their projects also stands. I have allocated the funds to Departments, and we have ring-fenced, on this occasion, significant amounts of funding. How Departments now spend their allocated funding is up to them.

I do not have responsibility for micromanaging Departments, although I obviously have an overview of and an interest in how funding is delivered in them. We need to take a long, hard look at bureaucracy in how we deliver public services and at the number of public bodies and quangos that deliver those services. It is clear that we will continue to have significantly constrained Budgets, so every penny counts. If delivery of public services is overly bureaucratic, I therefore encourage Ministers to remove the bureaucracy and put the savings made into front-line services.

Contrary to popular belief, a business case is not sitting on my desk. A business case is in the Department of Finance, where it is being appropriately scrutinised by the relevant officials, who are working with the Department of Justice and will, at the appropriate time, provide me with a report. I await the outcome of that scrutiny of the business case. When it comes to me, I will continue to engage with the Minister of Justice on supporting policing and on ensuring that investment in policing is sufficient, is delivering the safer communities that all our citizens want and is being delivered in a front-line services way. There is a process to follow — it will not be sped up by googling or doing anything else — and I will follow it.

The five-year business plan presented to my Department obviously covers five years, and this would have been the first year. As far as I am aware, the amount of additional expenditure in the first year was limited and would not have had a significant impact on policing numbers or plans. As I said, there is a process to go through. I am sure that the Member will want to ensure and will want me to ensure that any bids for quite significant additional funding will be spent appropriately and will be fully required. We cannot run our public finances according to who gets the most dramatic headline on whatever day of the week it is. We have to run our public services on the basis of the Programme for Government's priorities and by ensuring that the limited public resources that we have are best utilised.

The Executive and, indeed, the Assembly have to be commended. From a standing-still point last year, we are now spending £50 million on early years and childcare, and we have pledged an additional £5 million in June monitoring. That is £55 million from the standstill point this time last year. Thousands of families are benefiting from the Executive's decisive action in that regard. There is more work to be done. As I said, I look forward to seeing the Opposition's alternative Budget. I will study it closely to see their suggestions. I am always keen to engage on that basis. However, it is £55 million compared with zero.

As I understand it, it is the continuation of a current scheme, and it fulfils projects that would not go ahead without the money. It is a welcome investment in the economy along with the skills investment.

It is vital, whether you are a Minister, an MLA, a chief executive or a public servant, to be careful about the language that you use and that you do not unnecessarily raise anxiety and concern among the general public, patients and, particularly, the health service workforce. We all must act responsibly in these matters. Therefore, I caution everyone who will be on the airwaves or seeks to be on the airwaves to be extremely cautious with the language that they use. The sentence in the Health Minister's letter that stands out to me — I commend him for it — is this:

"I accept the challenge of trying to deliver better with less funding".

That is the challenge for all Executive Ministers, but it is a challenge that we have to take on. We cannot simply throw our hands in the air and say, "It can't be done". We have a duty to do better.

I do not have to impress that point on the Infrastructure Minister. The Member will be aware, however, that that funding will be allocated to NI Water, which has a chief executive and a board who are ultimately responsible for how the money is spent.

If I were to go through every financial transaction and movement that occurs in the 2025-26 Budget, we would be here until midnight. I have given Members the headlines, the movements of finances and, attached to the statement, tables of all the financial transactions under the headlines. Look, it is understandable and right that the Budget is open to question. I have no difficulty with that; in fact, I fully support it, because we end up with a better, more transparent system. However, I would like to compare it with something. I would like to compare it with the Opposition's Budget. Thus far, I am unable to do so, because you have not produced one.

I have had some engagement with the Health Minister, but the £50 million extra is on the proviso that the Minister bring forward a plan for how it will be invested. In the Health Minister's budget, £165 million is ring-fenced, and the £50 million of additional funding that I am bringing forward for him is on the proviso that he brings forward a plan for how it will be invested to tackle waiting lists. I am not challenging the Health Minister in that regard, because, in fairness to him, he is on the same page.

We can all be very thankful that policing is in a different place from where it was in 2010 and that our society is a much more settled place than it was then. That needs to be reflected when comparing policing budgets over that period. As I said to some of your colleagues, there is a business case with the Department. My officials are analysing that, as they would any business case. When it is appropriate to do so, it will be brought to my attention. I will continue to engage with the Justice Minister at that stage on how we move financing for policing forward. I am sure that, if someone were looking for an extra £200 million of very limited public resources, the Member would be the first to tell me that he expected proper process to be followed. Proper process will be followed.

3,157 words. Text as published by the Northern Ireland Assembly.

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