Debate contribution: Public Expenditure: Provisional Out-turn 2024-25 and June Monitoring 2025-26

Debate contribution by Mr John O'Dowd on 30 June 2025.

MLA

Mr John O'Dowd

Party at the time

Sinn Féin

Date

30 June 2025

Type

Debate contribution (made as a minister)

Business

Ministerial Statement

Heading

Public Expenditure: Provisional Out-turn 2024-25 and June Monitoring 2025-26

Assembly identifier

Official Report component 5043380

Read the official Assembly record

Text

Go raibh maith agat, a Cheann Comhairle.

Thank you for the opportunity to update the Assembly on the 2024-25 provisional out-turn and the 2025-26 June monitoring exercise. Before turning to the current year, I want to update the Assembly on the 2024-25 provisional out-turn and the resulting carry-forward under the Budget exchange scheme. As I outlined to Members on 16 June, subject to final out-turn, the Treasury has confirmed that the Executive have fulfilled the requirement to deliver a balanced Budget in 2024-25 and therefore will not be required to repay the £559 million of debt from the 2024 restoration package. While it should never have been viewed as a debt, that is still a positive outcome.

The tables accompanying the statement set out the provisional out-turn position for each Department. In resource departmental expenditure limit (DEL), Departments reported an underspend of £23·2 million. Adjusting for higher regional rates income, lower reinvestment and reform initiative (RRI) interest costs than forecast and earmarked funding that will be returned to the Treasury, the overall resource DEL underspend was £26·6 million. Of that, £11 million will be used to offset pressures in capital DEL and £15·6 million will be carried forward to the 2025-26 budgetary period. On conventional capital DEL, the Department's net underspend position is £8·5 million. That includes an underspend of £15·6 million for the A5. As that will be offset by an equivalent reduction in the funding drawn down from the Irish Government, it has no impact on the block position. Adjusting for that and for earmarked funding that must be returned to the Treasury and including a central pressure of £3·5 million resulting from a late adjustment to the Barnett consequentials provided at Westminster Supplementary Estimates results in an overall capital DEL pressure of £11 million. As I have already stated, in line with Treasury rules, that will be offset by the easements in resource DEL, which will ensure that the overall block remains balanced and no funding is lost to the Executive. On financial transactions capital (FTC), the total underspend is £52·5 million. The Budget exchange scheme allows only £1·3 million of FTC to be carried forward. However, my Department secured agreement with the Treasury that any FTC underspends can be used to offset the required repayments. Therefore, the remaining underspend of £51·2 million is not lost but rather reduces future liabilities. Ring-fenced resource DEL may be used for non-cash depreciation and impairment costs but cannot be used to fund other services. Due to Budget exchange limits, only £6·5 million can be carried forward to 2025-26. However, it should be noted that, of the total underspend of £314·4 million, some £266 million relates to student loan impairments and is mainly a result of the funding model used by the Treasury rather than any underspend by the Department. I now turn to June monitoring. I will first address some prior commitments made by the Executive in agreeing Budget 2025-26. Members will recall that Budget 2025-26 set aside £50 million for actions relating to an early learning childcare strategy, as well as committing to providing a further £5 million from available funding in-year. As the Executive have now agreed proposals brought forward by the Education Minister to utilise that funding, the full £55 million is being transferred to the Department of Education in this monitoring round.

We are already seeing the impact of that funding, as it is enabling of the extension of the childcare subsidy scheme to school-age children from September 2025. It will also enable the stabilisation and expansion of early learning and childcare programmes and provide a further 2,000 children with 22 and a half hours of preschool education a week. That shows the Executive's commitment to supporting hard-working families.

The Executive also agreed, as part of the Budget for 2025-26, how funding from the Chancellor's spring statement and the Westminster Main Estimates of £158·5 million in resource DEL and £2·4 million in capital DEL will be allocated. That funding was not provided until the Westminster Main Estimates were announced, so it could not be formally allocated in the Budget and was therefore presented as indicative allocations. The Executive also agreed in the Budget an indicative allocation of £1·1 million for FTC funding. Those 2025-26 Budget indicative allocations will be formally allocated to Departments in the June monitoring round. They can be viewed at table 5 of the statement. I will now turn to funding that is available for allocation. Following the Westminster Main Estimates and phase 2 of the spending review, and after adjusting for reclassifications and the indicative allocations that were agreed as part of the Budget, £78·5 million in resource DEL, £40·1 million in capital DEL and £176·4 million in ring-fenced resource DEL are available for allocation in this monitoring round. Before considering departmental bids, the Executive agreed some central allocations. As well as the £5 million in resource DEL for childcare that I referred to earlier, £0·3 million of match funding will be allocated to the Executive Office for the cross-border PEACE PLUS programme. The Executive have also agreed resource DEL to capital DEL switches totalling £0·3 million for the Department of Education for its early learning and childcare strategy and to the Food Standards Agency (FSA) for a nutrition R&D project. Having taken account of those issues, the Executive had £73·2 million in resource DEL, £40·1 million in capital DEL and £176·4 million in ring-fenced resource DEL available for allocation. It will come as no surprise to Members to learn that the level of bids that Departments submitted exceeded the funding available some 12 times over for resource funding and some eight times over for capital funding. The Executive therefore had to make difficult decisions in order to ensure that the most urgent and high-priority needs were met within the constrained funding envelope available. Full details of the bids received, and the allocations made, are set out in the tables that accompany the statement. I will highlight the key resource DEL allocations. The Department of Agriculture, Environment and Rural Affairs will receive £3·2 million for its bovine TB programme delivery. The programme is essential to the operation of the cattle industry. The Department for Communities will receive £0·6 million for its legislative requirement under the derating grant provided to councils. The Department for the Economy will receive £7 million to meet an inescapable pressure as a result of the shortfall in the higher education teaching grant, as well as a further £2·8 million for energy. In addition to the £55 million for its early learning and childcare strategy that I referred to earlier, the Department of Education will receive £12·3 million for special educational needs and £8·1 million for a range of pressures that the Education Authority faces in delivering its statutory duties. The Department of Health will receive £25 million to address a range of pressures. The Department for Infrastructure will receive £1·8 million towards the increase in the road drainage charge that it has a statutory obligation to pay, £1·3 million towards pressures facing the Driver and Vehicle Agency (DVA) and a general allocation of £3 million to help it meet a range of other pressures, including those in Translink and NI Water. The Department of Justice will receive £5 million to cover unforeseen costs to the PSNI from dealing with the recent public disorder. In addition, I propose that the Department of Justice be given first call on up to £7 million of funding in future monitoring rounds this year towards PSNI workforce recovery costs, thus recognising the importance of investing in our police workforce. I look forward to working with the Minister of Justice and the rest of the Executive to progress the delivery of the PSNI workforce recovery plan as part of the multi-year Budget process. The Executive Office will receive £2·2 million towards ending violence against women and girls. That money will deliver further funding to women's advocacy groups and build capacity in the community and voluntary sector. Moreover, £1 million is being provided for the central good relations fund. I turn now to capital DEL. The Executive have agreed allocations of just over £40 million. Those include the following: £11·3 million to the Department of Education for a range of capital works; £1 million to the Department of Finance for the office estate and fit-out costs for buildings that are managed on behalf of other Civil Service Departments; and £11·3 million to the Department for Infrastructure for pressures relating to water. DFI will also receive £3·4 million for the A1 junctions phase 2 road scheme and £1 million for local transport safety measures that are aimed at raising road standards and enhancing safety for road users. The Department for Communities will receive £9 million for new-build social housing to help meet the demand for homes. I am conscious of the pressure on the new-build social housing programme. I look forward to working with the Communities Minister, in conjunction with the Executive, on the new-build targets, as set out and agreed in the Programme for Government and the housing supply strategy. In addition, I am proposing that DFC be given first call of up to £2 million on funding in future monitoring rounds this year for new-build social housing. The Department for the Economy will receive £2·5 million for higher education quality-related research grants, which provide strategic institutional funding to our higher education institutions in support of research activities. Finally, the Executive Office will receive £0·7 million for the ending violence against women and girls strategy, to develop the use of technological innovation in order to improve understanding and prevention of violence against women and girls. On ring-fenced DEL, the Executive have allocated the full amount of funding available, details of which are set out in the tables that accompany the statement. To increase transparency, the statement is also accompanied by tables that outline the details of changes to departmental budgets. Included under technical adjustments are various Treasury-earmarked funding streams and Budget cover transfers from Whitehall Departments. Those reflect areas such as the Windsor framework; the immigration health surcharge; the Homes for Ukraine scheme; and the City of Derry Airport. In total, those amount to £148·4 million resource DEL and £13·2 million capital DEL. In conclusion, as an Executive, we have worked together to collectively agree allocations that will make a positive difference to citizens across society. Much-needed funding is being provided for childcare; special educational needs; ending violence against women and girls; policing; our higher education sector; and social housing. The allocations announced as part of June monitoring, including the indicative allocations that the Executive agreed as part of the Budget, total over £237 million resource DEL and £42 million capital DEL and will help to alleviate some of the many pressures facing Departments. My Department’s focus will now turn to the multi-year Budget process. With public expenditure likely to be constrained for some time, transformation must be an essential part of the Budget if the Executive are to deliver their ambitions within the funding available. My Department is engaging with Departments on their five-year financial sustainability plans following formal guidance that issued in April. The production of those plans provides Departments with an opportunity to identify the actions that they intend to take to transform the delivery of public services so that the future cost of service delivery aligns with the expected budgets. The challenge that we collectively face is clear. We have a growing disconnect between the cost of delivering services and the resources that are available. The need for the transformation of services is well established. New ways of delivering services will be required, and each of us as Ministers must look in our Departments to find the transformational change that is needed for us to make good on the ambitions of the Programme for Government. This will be the Executive's first multi-year Budget in over 10 years. It will provide an important opportunity to put our finances on a more sustainable footing and, along with the Programme for Government, will set the Executive’s long-term strategic direction. I will work with my Executive colleagues to develop a Budget that supports families, workers and communities. I commend the June monitoring outcome to the Assembly.

I thank the Member for his question. I deeply regret the outcome of the court judgement last Monday. I was hopeful, going into that court, that I and the advisers and civil servants from the Department had presented a case that would overcome the judicial review. That was not the case. However, that is not the same as me neglecting or failing in my role as Minister, as I have heard some suggest inside and outside the Chamber. The judgement needs to be studied, and the Department for Infrastructure and its Minister will decide on the next steps to be taken. However, it is too early to say whether the totality of the A5 budget will or will not be spent, or whether some or all of it will have to be returned. It will not be lost to the Executive to spend. All ring-fenced funding — the A5 funding is ring-fenced — will have to be returned to the Executive for allocation to other Departments, if we reach that stage. A number of hurdles have to be navigated before we even reach that stage. Most Members in the Chamber are united in backing the building of the A5, but some should be cautious about taking political opportunity or party political point-scoring when it comes to the objective. If we all share the same objective of getting the A5 built, let us work together to do that.

I thank the Member for her question. There are two different treatments of resource DEL. The resource DEL referred to in the statement relates to cash that may only be used for non-cash depreciation and impairment costs. It cannot be used to fund other services. That is in that category. When it comes to the overall Budget, no money has been lost to the Executive to spend. However, if I picked the Member up properly, I share her concern about the overestimation of budgets and requirements, particularly in our arm's-length bodies. It must be remembered that, in many Departments, arm's-length bodies spend the vast amount of money given to that Department. It is only right and proper that there is full accountability and transparency regarding spend by arm's-length bodies and that we ensure that they are working to a plan that is in line with the Executive's Budget and the commitments that we, as Ministers, have around our budgets as well. Everybody would like more cash: that is clear. Nobody needs to say that any more. We all know that we would like more cash. However, the reality is that the 2025-26 Budget has been allocated, and it is now the responsibility of Departments and arm's-length bodies to live within their budgets and make the necessary decisions to do so.

I welcome the allocation of £50 million by the British Government to the Casement Park project. It is a very welcome and substantial commitment, and the Executive and all the partners in the project need to grasp that and move forward. I have asked for a meeting with the Communities Minister to discuss how we will move that project forward; how we will ensure that the funding is available — it may be required to be made available — and will be secured in the time ahead; and how we will deliver the project for west Belfast, greater Belfast and the entire island. I am acutely aware, and am on record as saying, that there are other sporting organisations that also require support.

I support all sport. Sport is a good thing. It benefits our society and our communities immeasurably. I am more than up for the discussion about how we support other sporting organisations, but we have to get Casement Park moving.

2,661 words. Text as published by the Northern Ireland Assembly.

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Assessed 21 October 2026 at 13:05 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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