Debate contribution: Budget 2026-29/2030

Debate contribution by Mr John O'Dowd on 12 January 2026.

MLA

Mr John O'Dowd

Party at the time

Sinn Féin

Date

12 January 2026

Type

Debate contribution (made as a minister)

Business

Ministerial Statements

Heading

Budget 2026-29/2030

Assembly identifier

Official Report component 5311698

Read the official Assembly record

Text

First and foremost, there is a responsibility on all Ministers, particularly those who carry a significant overcommitment, to do everything in their power to reduce that overcommitment and continue to work in their Department and their arm's-length bodies to ensure that those costs are driven down as much as possible. The overspend is factored in by recognising that there is a potential overspend in the 2025-26 Budget. That is being dealt with in a number of ways. I will continue to engage with the Treasury on trying to spread the costs over the maximum time period. Ministers are aware that we will also have to deal with those matters during the monitoring rounds. It is up front. Ministers are aware of it; the public are aware of it; the leader of the Opposition is aware of it; and it cannot and will not be ignored. However, there are still three months left in this financial year, and I encourage all Ministers to drive down their overspends until the end of the financial year, bearing in mind that we continue to have to work our way through the Budget.

None of the proposals in the document will come as a surprise to your Executive colleagues; you can be assured of that. They were and are fully aware of them. I have carried out my function as Finance Minister by publishing a draft Budget. Others will have views on that Budget, and there will, of course, be a divergence of views, but those who disagree with my proposals need to come forward with alternative proposals to those in my draft Budget. I have given Members all the information that they require in order to bring forward alternative proposals. I assure Members that I am in listening mode. If there are other ways of doing things, talk to me, and I will work through them with Members. We are working within a fixed envelope that has been imposed on us by the British Government. I have set the rates at what I believe to be fair and equitable levels, at 3% and 5%. If others disagree, let me hear that, but it would then be a case of either lessening the amount of rates from that which I believe should be collected, which will lead to budget lines having to be reduced or to an increase in the amount of rates that are collected, in which case budget lines could be increased. Members' option to say that they disagree was all right for last week, but for this week, the following week and the week after that, we need alternatives.

You and I agree that, in order to grasp fully the potential of this society, we need constitutional change. In the meantime, however, we need to take more control of our fiscal destiny through fiscal devolution, whether that be income tax being devolved in totality or partially or stamp duty, air passenger duty and other items that the Fiscal Commission recommended be devolved. We may well look at other things that can be devolved so that we can make decisions at a local level that meet the needs of our businesses, workers and communities and then reinvest taxes in our society by way of investment in public services and the economy. Some people challenge and criticise those who criticise the British Government's fiscal strategy, but I will continue to criticise it. It is time for the Assembly and the Executive to take on more fiscal powers.

The 'Cost of Division' report is a wee bit like the Bible, in that people quote the sections that suit them or that have different interpretations. Yes, there is a cost of division in this society. The stabilisation of politics and having leadership shown in the Chamber and beyond should help reduce division, but it is not as simple an equation as it is sometimes presented as being. Where we can reduce costs through the removal of the duplication of services, we should. There is no argument against that from me. We should not, however, overestimate the costs that are associated with some of those things. One such area is policing, and, to a lesser or greater extent, duplication costs are associated with the provision of other services. The general principle should be to lessen division, and of course we should do that. Should we reinvest that funding in front-line services? Yes, we should.

I will be happy to share that advice with Members.

I have proposed that we ring-fence that funding to ensure the continued expansion of the medical school at Magee. Magee is a success story not only for the university but for Derry city. You can see that in the number of students who are now going to that city and the subsequent investment related to that. My draft Budget continues to support the expansion of the medical school.

There is an opportunity for Ministers to fund projects out of their general capital and resource allocations; in this instance, it is capital. I have highlighted projects that, I believe, are in line with the Programme for Government and Executive priorities and should be supported moving forward. Ministers can bring forward and fund other proposals as they see fit. On the waiting lists and how the money was used in this financial year, that was how the agreement was set out with the Executive. It was an Executive initiative. The Executive set out the terms and conditions, and, in fairness to the Health Minister, he acted within those terms and conditions. It will be for the Executive to decide, first, whether they agree that the funding that I have proposed is sufficient and will proceed as planned, and then it will be up to the Executive to set the terms and conditions for that funding.

I set out in my statement proposals for investment in our waste water infrastructure through traditional capital and through borrowing. As with all areas of the Budget, we would like to invest more, but we have seen significant development and change delivered as a result of strategic investment by the Executive and the Infrastructure Minister in NI Water, with 5,000 homes and businesses connected to the waste water system since the return of the Executive in February 2024. Would we like to do more? Of course we would, but we should also recognise what has been done.

As I mentioned to a colleague during Question Time, now that the autumn Budget has been completed, the opportunity exists for the Treasury and us to open discussions and engagement on the full fiscal framework. We have had initial success with the interim fiscal framework, and colleagues will be aware of the advantages brought by the Holtham report. The Holtham report remains on the table, but we also now want to look at borrowing powers for the Housing Executive. That is an important element to move forward with when it comes to the delivery of more social homes and upgrades to Housing Executive properties. The Treasury has committed to engage with us on that, and we also want to engage with the Treasury on the devolution of fiscal powers.

I am meeting a bid from TEO for the Climate Commissioner, because the office will be under its auspices and legal framework. The fact of the matter is that we have significant climate issues that our society and others around the globe will have to tackle, and we have to play our small part in that.

All baselines start afresh with the new Budget. It has to be recognised that, along with the Health Minister, the Executive ring-fenced money last year to tackle waiting lists and elective care and, by and large, it has been a success story. Let us build on that success story. The Health Minister took other initiatives in his Department that have started to change the waiting lists. They are nowhere near where they should be, but the focus by the Executive and the Health Minister has seen improvement. Let us continue with that. If we get agreement on what the Budget will be, you can argue that it is new money, or you can argue that it is existing Health money; the main point that the public will be interested in is whether it tackles the waiting lists.

Yes. At the start of the financial year, when Ministers sit down with their accounting officers, it is vital that they set aside the budget required for pay uplifts for public-sector workers. Members will be aware that, particularly this year, colleagues may have waited for in-year funding. I suspect that in-year funding will be very limited over the next number of years, given the trend and attitude of the Treasury and the British Government and the weakening state of the economy in Britain. It is only right and proper that, at the start of the year, Ministers sit down with their accounting officers and set aside the sums required for public-sector pay awards.

Jonny, your constituents have more faith in you than you think. The public will engage in a discussion about the devolution of fiscal powers to this place, and they will have views on it. The more powers this place has, the more responsibility it places on us, as elected representatives, to carry out those functions. It is up to each Minister to ensure that their budget is spent effectively and efficiently. Each Minister should have sat down with their accounting officer before submitting any bids to the Budget and gone through their budget line by line and assured themselves that it would be spent effectively and efficiently. No Minister or party should look across the Executive table at a ministerial colleague or another party and say, "You need to make savings", because, when you point one finger, four are pointing back at you. All Ministers should carry out that task and ensure that money is spent effectively and efficiently.

I assure the Member that I am more than happy to engage with the AERA Minister around those matters, as I am committed to engaging with all Ministers.

People will have different views on such things and different priorities around whether a Budget is right or wrong, but, in fairness, the SDLP came out within an hour of the Budget being published to say that it disagreed with it. It was not given any fair wind at all by the Opposition. Hopefully, in the next number of weeks, you will sit down with the information at hand, examine it closely and come forward with your proposals around the matter. In respect of regional balance, the Member will see the continued commitment to Magee, and she will have to acknowledge the significant, positive changes in Derry over the past number of years as a direct result of the Executive and their Departments focusing on Derry and the north-west and ensuring that there is investment in it. The Budget allows that to continue.

A multi-year Budget is a good way to go at any time. Obviously, we have not been able to do multi-year Budgets in about a decade because of the way that Whitehall and Westminster brought forward their Budgets. However, now we have the opportunity to do a multi-year Budget. The fact that we are dealing with such financial constraints from the British Government and what can best be described as continued austerity means that a multi-year Budget in those circumstances is more crucial, because it allows you to plan better over those years and to bring in transformation and engagement and to work with your workforce and others around how you deliver your public services. It allows you to send out the signal to the economy as to how the investment will work over the next number of years. Even though things are extremely difficult and challenging, a three-year Budget and four-year capital Budget is much better in constrained times than trying to do it year by year. Next year will probably be the worst year for finances available, so to try to work our way through next year and then do a two-year Budget after that would be a huge mistake. We have to get through next year and allow our Departments to know what is happening in the years after that to give them any chance of success.

It is a reflection of the real pressures on the 2026-27 Budget. I am proposing that that amount be ring-fenced by the Executive. The Education Minister can add further funds to that, if he believes that that is a priority for his Department. It is only right and proper that I ring-fence minimum amounts of money in the Budget, in line with the Programme for Government. If Ministers wish to add to that, they have the opportunity to do so.

It is still a worthy case. I doubt that you would win that argument with the people of Omagh or in the surrounding rural communities, who are seeing significant investments in their rural town, which is west of the Bann. There are different points of view on shared education, but the Strule campus is an excellent example of what can be delivered when the Executive work together.

The draft Budget proposals include a commitment of just over £100 million for the Casement Park project. That includes an inflationary uplift on the original Executive commitment, which dates back to 2011. As the Member will know, the Irish Government have made a commitment to the project of €50 million, and the GAA have contributed £15 million. I have made sure that the British Government have lived up to their promise to make a financial contribution by providing a further £50 million. That is the way forward for Casement Park and confirms how the project can be funded. I have also proposed funding for Windsor Park and the Affidea Stadium. I am on record many times as saying that despite not being any good at any sport, I believe that it is a very good thing and that we should be encouraging it in our society.

The A5 upgrade has been delayed for many years, and the latest court judgement has caused further delay. However, the project is still fit for purpose and worthy of moving forward on the basis of road safety and opening up the west for further economic development and enhancement. The west was ignored for decades, if not centuries, and it is only right and proper that investment is put into it. The connection from Donegal to Dublin and to Belfast etc needs to move forward. A significant amount of money has been set aside for the A5. I hope that there are no further delays and that the court case rules in favour of the project so that it can move ahead. If there are delays, the money can be quickly diverted to other projects in public services; it will not be lost.

Yes. The party secured £235 million for transformation as part of the restoration package. That is a very welcome investment, but, on its own, it will not be enough. We have to continue the journey of transformation. We have already invested a significant amount of that, and further announcements will be made in due course. I propose to set aside a further amount of around £130 million for transformation over the budgetary period, because I believe that the transformation journey needs to be funded to continue to move forward on it.

I engaged with the Education Minister on his budgetary pressures several weeks before Christmas. We have had a number of engagements on those matters at the Executive, and I have no doubt that we will have further engagement in the weeks ahead. Transformation will be high on my agenda, as I am sure it will be on his.

Monitoring rounds will continue to form part of the multi-year Budget process. They are a useful tool in redistributing moneys that cannot be spent within the criteria or time frames that have been set out. As part of the draft Budget, I will set out proposals to my Executive colleagues in that regard. I think that Departments could be incentivised by being allowed to retain up to £20 million of capital from the sale of assets. There is a considerable amount of land and properties under the ownership of Departments and arm's-length bodies that is not being fully utilised, and I am disappointed at the pace at which it is being disposed of. We could encourage Departments to do so by telling them, "If you remove those properties from your portfolio, we will allow you to keep the first £20 million". Where Departments are able to raise revenue in a fair and equitable manner, they should be allowed to keep that revenue up to a certain level. I think that that level is also up to £20 million, although I will confirm that with the Member. There are a number of incentives whereby Departments could be innovative in raising funds for themselves, but there will also continue to be a need for monitoring rounds.

Yes. There is a case to be made on those costs. We are already engaged with the British Government on a number of areas where they have imposed costs on the Executive that are having a significant impact on the Executive's Budget. I am more than happy to work with the Justice Minister on that.

First, let me explain to the Member that capital funding cannot be used for wages, so it cannot be used to fund nurses. If you speak to any health expert, they will tell you that the objective is to keep people out of hospitals, GP services and mental health services. Keeping them out of the health service altogether is the cheapest way to run the health service. One of the best ways to look after people's physical and mental health and well-being is through sport, be it through playing sport, being involved in organising sport, watching sport or being part of sports communities. I note that you did not mention the investment in Windsor Park or the rugby grounds; perhaps you do not object to those games, but, for some reason, which I think that we all know, you object to Casement. However, investment in sport is a good thing for all the reasons that I outlined.

Gerry, I have no doubt that the good people of West Belfast, like the good people of Upper Bann, want to see their taxes spent effectively and efficiently. There is no doubt in my mind about that: no matter what their views on economics and whether they are socialist, Conservative or whatever, they want to see their money being spent effectively and efficiently and delivering the best change possible for their society. That is the basis on which that terminology is used. Decisions on where the money will go are for the Ministers involved. If we can achieve a three-year Budget, it will allow us to maintain and sustain services, particularly in our health service. It will keep our health service away from the private sector, which, it has to be said, by and large, we have been very successful in doing. However, allowing us to plan on a three-year basis will further ensure that our health service is kept in public hands.

I was making a general comment, which, I think, was fair. There was a recent debate in the Chamber about the 'Cost of Division' report, and it is fair to say that there were different views and opinions on what the report's findings were, where the emphasis lay or what the most important findings of the report were. It was a general comment; it was not a slight on your party or anyone else in the Chamber. It is unfair to say that that report says that we are losing hundreds of millions of pounds because of division and, were that sorted out, we would save hundreds of millions of pounds. That is a view, but it does not set aside the fact that we need to tackle the costs of division. My Department does not deliver front-line public services directly; it is responsible for the management and allocation of Budgets, the Civil Service overall, amenities and a few other matters to do with civil law etc. However, the best way to tackle division in our society is to make politics work, and I would like to think that I have played my part in that.

As I said, I think, to Mr O'Toole at the start, the overspend is first and foremost in our minds in planning for the multi-year Budget. There is a responsibility on all Ministers, particularly those who face significant overspends at this time, to drive down their costs. There is also a responsibility on the Executive to work with them and support them in that regard, and we have taken measures to do that. The Executive will decide collectively how we deal with whatever overspend we end up with at the end of this year. That will have to be factored into the final Budget.

My colleague will be aware that it took several years for the Scottish and Welsh to agree their fiscal packages with the Treasury. It would therefore be irresponsible of me to prepare a business case in advance of concluding the negotiations on what we would do with tax powers when they arrived. Some of the institutions have not even used the full suite of powers that they have. The first objective is to get the powers devolved. The Executive, collectively, can then sit down and discuss how best to use them within the framework in which they operate at that time.

3,636 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 14:16 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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