Debate contribution: Budget 2025-26: Reports

Debate contribution by Ms Diane Forsythe on 8 April 2025.

MLA

Ms Diane Forsythe

Party at the time

Democratic Unionist Party

Date

8 April 2025

Type

Debate contribution

Business

Committee Business

Heading

Budget 2025-26: Reports

Assembly identifier

Official Report component 4919905

Read the official Assembly record

Text

Thank you, Mr Deputy Speaker. In the absence of Matthew O'Toole, the Chairperson of the Committee for Finance, who is on paternity leave, I will speak for the Committee for Finance in proposing its motion. Members will be aware that, in previous mandates, it has been for the Committee for Finance to undertake a round-robin exercise to hear the views of the other Statutory Committees on their respective Departments' budgets, as was the case in 2022. The exercise also takes in the Northern Ireland Fiscal Council's view of the Executive's Budget for 2025-26. The Committee has compiled and published a brief report on those views. Today's debate provides Members and, in particular, Chairs of the Statutory Committees with the opportunity to debate the 2025-26 Budget. The Finance Committee takes it role in leading scrutiny of the Executive's Budget very seriously, with members seeking ways to support and facilitate other Statutory Committees in the scrutiny of their respective Departments' budgets. The Committee is very grateful to the Minister for agreeing to respond to the debate today. I will start the debate by highlighting the extremely difficult Budget envelope that we have for 2025-26. While elements of the Executive restoration settlement are still helping to deliver funding, Finance officials have highlighted to the Committee on a number of occasions the fact that in-year funding from the UK Government will be significantly less than last year and that Departments must live within their budgetary limits. With the final Budget being approved by the Executive on 3 April, it is timely for the House to debate this motion. I thank the Business Committee for scheduling the debate. The debate is informed by the Budget document itself, by the very useful Fiscal Council assessment and by the excellent scrutiny undertaken by Statutory Committees. I thank the Fiscal Council and all the Statutory Committees that were able to respond with their thoughts, on which I will now reflect. The Fiscal Council highlighted the fact that the Executive have delivered a Budget that formally balances each of the distinctive control totals for day-to-day resource spending, capital and financial transactions capital (FTC). That means that the proposed departmental allocations and forecast debt interest costs are covered by a combination of block grant funding, regional rates revenue and capital borrowing. The Fiscal Council notes that the Budget balance is resting on some significant assumptions, most notably in Health, where the position bakes in a reliance on trusts raising £200 million of additional savings. There are also general pressures that the Committee has previously noted arising from public-sector pay and the cost of meeting the UK Government's employers' National Insurance increases. I also note that, in his written ministerial statement last week, the Minister confirmed that the Executive will only receive approximately £146 million of the £200 million that they identified as needed for the core Civil Service to offset the rise in employers' National Insurance contributions. That £200 million did not include GPs, dentists and all those public-sector employees who are not core civil servants, nor does it include the councils or third-sector organisations that deliver public services. Additionally, that funding will not be available until the Westminster Main Estimates in June, and it will be allocated through our June monitoring round here.

Until then, Departments will need to manage the additional costs.

The Fiscal Council has assessed that, because of the large spending increases in the October 2024 UK Budget, it is unlikely that the Executive Budget for 2024-25 will unbalance, but there are significant potential pressures to contend with in 2025-26. As has been discussed with the Committee on a number of occasions, the restoration package contains a funding cliff edge in 2026-27, when the short-term Budget support that is being provided runs out but the 24% Barnett consequentials top-up will not have had time to build up to a similar level. The Committee welcomes the interim fiscal framework signed off by the previous Finance Minister last May, which has delivered considerable benefits for the Executive, not least the recognition of the 124% relative need figure. The Fiscal Council highlights that 2025-26 represents the eleventh successive year in which Northern Ireland has operated with a single-year Budget. Many stakeholders have told the council and the Committee that multi-year Budgets would provide a better basis for delivery and for workforce and transformation planning in Departments and arm's-length bodies (ALBs). However, the council suggests that, while that is true, recent experience shows that, even over relatively short periods, initial Budget allocations can be amended significantly as the overall funding position changes and resources are reallocated between Departments. With specific reference to the Department of Finance's budget, the Committee has noted that the Department will carry significant capital pressures that it intends to manage down during the year through a range of measures. The Committee will continue to keep those pressures and others identified by the Department under observation. As well as continuing their scrutiny of funds arising from the restoration package, including the public-sector transformation fund, members are heavily engaged with the workaround fiscal framework being taken forward by Professor Gerry Holtham. It is hoped that that will take us beyond the 124% relative need, compared with per head spend in England, which has already been identified in the interim framework. Through its membership of the Interparliamentary Finance Committee Forum, with counterparts in Wales and Scotland, the Committee has recently engaged with the Chief Secretary to the Treasury, the Rt Hon Darren Jones MP, as part of the fourth meeting of the forum, which was hosted in Parliament Buildings. With our Scottish and Welsh counterparts, the Committee is keen to engage with UK Treasury to provide greater scrutiny of its actions, which have a direct and significant impact on the UK's fiscal context, not least the Budget for Northern Ireland. With our Scottish and Welsh colleagues, the Committee is working to ensure that our Budget settlements reflect our respective needs and are more adaptive and flexible. The current arrangements do not incentivise the Executive to grow the economy or tax base here, as the current arrangements with the UK Government see us losing any growth in our fiscal base to the Treasury. As per the custom in previous years, the Committee agreed to ask the other Statutory Committees of the Northern Ireland Assembly to review the anticipated impact of the 2025-26 draft Budget proposals on their respective Departments. The Chairs of the Committees will have an opportunity to comment, but I will note the common themes from the Statutory Committees. They include concerns over the lack of a multi-year Budget. They indicated that a multi-annual Budget would assist Departments in their long-term planning, especially for larger capital projects. We are aware that the UK Government plan to produce multi-annual Budgets going forward. We will know more following the comprehensive spending review later in the year. The Committees indicated that a joined-up, cross-departmental approach with departmental budgets being linked to the Programme for Government (PFG) would help to link funding decisions to policy outcomes and that that would make it easier to assess whether financial allocations were being directed towards the most urgent needs. That has been a consistent theme of the Finance Committee, and it is hoped that the work already under way through the Budget improvement road map will allow Departments to provide longer-term budget plans that are linked to PFG priorities through indicative five-year business plans. While those are likely to focus on baseline budgets, they will be an important planning tool. The Statutory Committees have indicated their understanding of the constrained fiscal context in which we find ourselves. They acknowledge that there are considerable pressures on the public purse and that difficult decisions will need to be made during the 2025-26 financial year. I look forward to hearing Members' comments and the Minister's response. Once again, we are grateful to the Minister for agreeing to respond to today's debate. I will make some brief comments as a DUP MLA. I welcome the progression of the 2025-26 Budget, which, with a Programme for Government in place, will enable priorities to align and funding to flow. While we recognise that the Budget is incredibly challenging, we all need to work hard as we see it progress. We need to ensure that value for money is delivered, eliminate any wastage of public funds and see the delivery of real public-sector transformation: improved procurement practices; significant improvement in the management of major capital projects; and improved cross-departmental working. We know that no Minister has received an allocation of all that they wanted, but we need to see value for money for Budget allocations in the delivery of public-sector services across Northern Ireland.

1,452 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 12:21 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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