Debate contribution: Budget 2025-26

Debate contribution by Mr Matthew O'Toole on 19 May 2025.

MLA

Mr Matthew O'Toole

Party at the time

Social Democratic and Labour Party

Date

19 May 2025

Type

Debate contribution

Business

Executive Committee Business

Heading

Budget 2025-26

Assembly identifier

Official Report component 4968033

Read the official Assembly record

Text

Thank you, Madam Principal Deputy Speaker. I will be pursuing the point, particularly because others in the Chamber make great play of the importance of opposition in other Chambers on this island. I intend to do my job in opposition on this part of the island and to have it properly respected. Anyway, I will move on. I am giving the views on the Budget on behalf of the Finance Committee. We have carried out important scrutiny in that context. I thank the Minister for tabling the motion, which follows on from the Committee's Budget debate prior to the Easter recess. In the past number of months, the Committee has met the Chief Secretary to the Treasury to discuss the Budget process alongside our Scottish and Welsh counterparts. Soon, we will engage informally with the Secretary of State for Northern Ireland. In the past, the Committee has been critical of the Executive for not explicitly linking Budgets to the PFG. Committee members, however, welcome the development of five-year business plans and, indeed, the indications of moving towards having multi-annual Budgets following the comprehensive spending review. I acknowledge that the Minister made that point today.

We are all aware of the extremely challenging Budget envelope that we have for 2025-26, and the Fiscal Council has noted the considerable general pressures that Departments face, not least through the impact of the autumn statement and the rise in employers' National Insurance contributions. The Committee looks forward to receiving briefings from the Department this week on the fiscal framework and, we hope, on the report on our relative need from Professor Gerry Holtham. I may say more on that soon. At this point, we are, as I said, still largely dependent on regional rates and reinvestment and reform initiative (RRI) borrowing when it comes to money that is independent from the Treasury. The Committee also acknowledges the funding provided by financial packages, including New Decade, New Approach and Fresh Start, for shared education and housing and the Executive restoration package. As Members are aware, those financial packages are confirmed separately by the Secretary of State, who sets out the funding and any relevant conditions. I mentioned the impact of the rise in employers' National Insurance contributions. The Treasury has confirmed that the Executive will receive £146 million from Westminster Main Estimates to offset that cost. However, the Committee is aware that that is approximately £60 million short of what is needed for core Departments and does not extend to the wider public sector, such as GPs' and dentists' practices, nor indeed councils and community and voluntary sector organisations that are involved in the provision of public services. The Budget's uplift of 5% of the regional rate for domestic and 3% for non-domestic properties provides, in total, £732·3 million of funding in 2025-26. The Committee has engaged with officials regarding the levels of unpaid rates. The Committee also welcomes the uplift that was delivered in the restoration package to the Executive's borrowing power through the reinvestment and reform initiative. That additional £20 million in 2024-25 rises with inflation in subsequent years, so its addition gives the Executive the ability to access £225·7 million of borrowing for 2025-26. With Treasury allocations and funds available from June monitoring, the Executive Budget for 2025-26 stands at just shy of £17 billion in resource departmental expenditure limit (DEL) and just under £2·5 billion in capital DEL. We are pleased that FTC bids have, for the first time, exceeded the available allocation, which is £58·7 million. That is a welcome development and something that many of us, from all parties, have called for. Across resource and capital DEL, £440·6 million has been earmarked for PFG priorities, including £357 million in the Budget 2025-26 outcome and £83 million of indicative June monitoring allocations. Resource DEL allocations include a welcome £250 million to cut health waiting times. Capital DEL allocations include the allocation of £21·3 million of the £47 million that is available from the Executive restoration package. There is still some work to do on the public-sector transformation board (PSTB). The Committee has applied considerable scrutiny to the work of the PSTB and will engage further with the Minister and Secretary of State on that. Turning to the Department of Finance's own budget, non-ring-fenced DEL for 2025-26 amounts to £240 million and there is capital DEL of £32·1 million. On a number of occasions, the Committee has considered the Executive restoration package cliff edge when the short-term Budget support that is being provided runs out but the 24% Barnett consequential top-up has not had time to build up to a similar level. The Committee particularly looks forward to being briefed by Department of Finance officials this week regarding the fiscal framework and the work of Professor Holtham. It is vital that the Executive's Budget is set at the appropriate level. Through its membership of the Interparliamentary Finance Committee Forum, the Committee has engaged significantly with its counterparts in Wales and Scotland and will continue to do so. It will also engage with the Chief Secretary to the Treasury. I look forward to hearing Members' comments and those of the Chairs of other Statutory Committees. We welcome the fact that the debate was brought forward by the Minister. In the remaining five minutes of my 10 minutes — the Minister having taken 10 minutes of his 60 — I will endeavour to give the view of the official Opposition. This Budget represents drift, inaction and distraction by the Executive. Interestingly, the Minister said contradictory things in his opening remarks. He talked about the tightness of the spending settlement, but, from that lectern a few minutes ago, he also said that Departments have had "record levels of funding". It is true to say that, in the previous financial year, which was the first year back after restoration, the Executive experienced record levels of funding. The question that we are asking today is this: what have they done with it? How clear and specific are the targets set out in this document for the second full-year Budget of our restored Executive? How ambitious and realistic are those plans?

The answer, I am afraid, is this: not at all. There has been consistent drift and inaction from the Minister.

I will pick a few specific areas. There is no plan for investment in water. The Finance Minister and his colleague the Economy Minister made great play of the cost-of-doing-business review in response to the increase in employers' National Insurance contributions. Their response, in policy terms, to the research that they commissioned an academic to do was, "Forward it on to London". There is no clear plan from the Finance Minister or his colleagues for electricity investment and infrastructure. Compare that with what his counterpart Eoin Ó Broin and other Sinn Féin TDs were saying, possibly with some merit, in Dáil Éireann, just a few weeks ago, when they called out the absence of strategic investment in water, infrastructure and a range of other priorities south of the border. Who is in charge of those things north of the border? It is Sinn Féin — it is a Sinn Féin Finance Minister and other Sinn Féin Ministers. I accept that we are in a different situation on this side of the border, that we are not yet in a sovereign Irish Government representing the whole island and that the Minister will probably say to me, "Ah, but the choices I have are not the same as a Minister in Dublin has". That is true, but I would expect to see from a republican Finance Minister a little more ambition than simply to say, "London isn't giving us enough money. Therefore we can't take action". In his statement, the Minister said that he wants to see alternatives. I am glad to say that the Opposition have, today, published a detailed alternative plan — a five-point approach — that is different from that published by the Executive. There are things that the Minister and his colleagues could do to increase investment in Northern Ireland, but they are not doing them. He is not doing it. He is not taking the power to increase infrastructure investment, for example, by a more innovative use of infrastructure financing. He is not taking increased fiscal powers; in fact, I had to press him in the Committee to find out whether there is any plan to increase fiscal devolution. You would not know from what is in the document, because there is no intention to increase our fiscal powers whatever. There is a consistent argument that we are not getting enough money from the British Government — that is, of course, true; I would not disagree with that — but the test of people in power is not what they do to blame others for the limitations on their power. By the way, there is a legitimate and robust argument that the UK Government are not funding this place to need. As an Opposition we have consistently agreed with the Executive on that, but we have also said, "Show us your alternative view. Maximise the powers that you have in terms of fiscal devolution, local revenue raising and a greater use of alternative sources of funding". From 1919 to 1921, Michael Collins was a republican Minister of Finance who raised money internationally to help pay for the new Irish Republic. I would expect a republican Finance Minister to show a little more initiative than to simply wait for the UK Government to increase allocations; I expect a little more ambition from the Minister. The document does not have the ambition that we need for our public services, and it does not come near the kind of aspiration that we should have for our people. It has no plan for long-term investment in our infrastructure and no plan to take more powers to this place, rather than simply shifting blame to others. It is, I am afraid, a further example of the Executive's drift, inaction and distraction, so the Opposition cannot and will not support it.

1,682 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 01:20 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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