Debate contribution: Budget 2026-29/2030: Reports

Debate contribution by Mr Matthew O'Toole on 11 May 2026.

MLA

Mr Matthew O'Toole

Party at the time

Social Democratic and Labour Party

Date

11 May 2026

Type

Debate contribution

Business

Committee Business

Heading

Budget 2026-29/2030: Reports

Assembly identifier

Official Report component 5523669

Read the official Assembly record

Text

Thank you, Madam Principal Deputy Speaker. I am pleased to be able to speak to the Finance Committee's detailed scrutiny of the draft Budget, which was published earlier this year. I will speak largely in my capacity as Chairman of the Committee and will then make a few remarks in a party capacity afterwards. Members will be aware that the Committee for Finance undertakes a round-robin exercise to hear the views of other Statutory Committees on their respective Departments' budget allocations. As has previously been the case, the exercise also takes in the Northern Ireland Fiscal Council's view on the draft Budget. The Committee has compiled a report on those views, and it has been published. Today's debate provides Members and Chairs of the Statutory Committees, in particular, the opportunity to debate the 2026-29/2030 Budget. The Finance Committee takes its role in leading scrutiny of departmental budgets seriously, with members seeking ways to support and facilitate other Statutory Committees in budget scrutiny. The Committee is grateful to the Minister for agreeing to respond to the debate, and I welcome having the debate today, even if an agreed Budget has not yet been introduced. I start the debate by noting that this is not an agreed Executive Budget, with the Minister confirming that he is yet to reach an agreement with Executive colleagues on a final Budget. Finance officials have highlighted to the Committee on a number of occasions the fact that in-year funding will be significantly less than last year's and that Departments must live within their allocations. The Committee noted that, following the publication of the draft Budget, the Treasury recognised the challenges facing the Executive and the savings realised in 2025-26. The Treasury has agreed to provide the Executive with a reserve claim of £400 million of resource departmental expenditure limit (DEL) in 2025-26, with repayment over the following three financial years. Officials have confirmed to the Committee that section 64 of the Northern Ireland Act 1998, stating that an agreed Executive Budget should be laid before the Assembly before the beginning of each financial year, has been breached. It is therefore timely for the House to debate the motion, with no agreed Budget despite our being in the new financial year. The permanent secretary of the Department is already preparing for emergency measures should a Budget not be agreed by the end of June. I thank the Business Committee for agreeing to schedule the debate. The Committee asks the Minister for timescales as to when a Budget may be agreed and whether it will be a single-year or multi-year Budget. It is extremely important that that be agreed sooner rather than later. The debate today is informed by the Budget document itself; the useful Fiscal Council assessment; oral and written evidence taken by the Finance Committee; and the scrutiny undertaken by other Statutory Committees. I thank the Fiscal Council, Pivotal, the Ulster University Economic Policy Centre, the Nevin Economic Research Institute (NERI) and all the Statutory Committees that were able to respond with their views. I will reflect on some of that evidence on the Finance Committee's behalf. The Fiscal Council highlights the fact that the proposed multi-year Budget is significant. It is significant that a multi-year Budget has been proposed in the first place, but it starts from an exceptionally challenging position. The Fiscal Council notes that Northern Ireland overspent in 2022-23 and only avoided overspends in 2023-24 and 2024-25 due to exceptional Treasury interventions. The Fiscal Council warned strongly about the danger of normalising overspending, with repeated Treasury interventions acting as short-term measures that weaken discipline. It noted a cultural shift. Historic overspends, once considered unacceptable, are now more tolerated. Where Departments expect end-year bailouts, overspending becomes a rational expectation. The council confirms that the draft Budget theoretically balances at year start, but it is unlikely to unfold as presented. The repayment of the reserve claim over the next three financial years makes the underlying funding tighter than the headline numbers. Baselines for Health and Education start below their current spending levels, making re-emerging overspends highly likely. On the level of need, the council acknowledged that the 124% needs-based uplift is based on demographics and structural characteristics today, not historical legacy. Factors such as regional inequality, long-term ill health, legacy issues — that is, legacy from the conflict — and complex ageing profiles in Northern Ireland may mean that the true level of need now exceeds 124%. Indeed, since we took evidence on that, we have had updated demographic data around how fast our population is ageing relative to neighbours here. The council states that the Barnett formula is poor at addressing infrastructure deficits or accumulated social need and that non-Barnett injections may be needed for resource and capital. Members are engaged with the work around the fiscal framework following Professor Gerry Holtham's report. The Committee supports the Minister's ongoing engagement around Northern Ireland's level of need with the Treasury. Hopefully, we will have an update on that today from the Minister and a briefing from the Department over the next few weeks. The council emphasised that, while the Executive clearly need to make hard choices, only the Treasury can fundamentally change the model of funding. It believes that a credible Treasury strategy could set the right path and limit future interventions in order to reintroduce real Budget discipline. The Executive will still need to make real strategic choices, consider revenue raising, address workforce issues and look at genuine transformation of public services. With specific reference to the Department of Finance's Budget position, the Committee noted that the Department will carry significant capital pressures that it intends to manage down through a range of measures. The Committee will continue to keep those pressures and other pressures identified by the Department under observation. Through its membership of the Interparliamentary Finance Committee Forum, the Committee continues to engage with the UK Treasury to provide greater scrutiny of its actions, which have a direct and significant impact on the UK fiscal context, not least the Budget for Northern Ireland. For example, the Committee has made a number of representations to the Treasury regarding changes to the local growth fund and will continue to make representations on other budgetary matters. Notwithstanding some other comments that have been made, our Committee has been very robust and repeated in its engagement with the UK Treasury, whether it is seeking information or presenting agreed cross-party views from the Committee to the Treasury. We have not always had adequate or helpful responses, but we have been consistently robust in engaging with the Treasury. The Committee is working with our Scottish and Welsh colleagues to ensure that our Budget settlements are reflective of our respective needs and are more adaptive and flexible. The current arrangements do not incentivise the Executive to focus on growing the economy or the tax base here, as current arrangements with the Treasury would see us losing growth in our fiscal base to the block grant. As per the custom in previous years, the Committee agreed to ask other Statutory Committees in the Assembly to review the anticipated impacts of the 2026-29/2030 draft Budget proposals on their respective Departments. The Chairs of those Committees will have an opportunity to comment, but I will note the common themes from the Statutory Committees, including highlighted concerns over the lack of Executive agreement on a multi-year Budget. Without Executive agreement, the Committees found it difficult to provide full scrutiny of the draft Budget. In many cases, it was because their Ministers and Departments have not agreed on the Budget. Therefore, they are not engaging with it as a true final Budget. Some Committees were unable to take a formal position because, as I said, Departments had not completed their budget assessments. Many Departments face resource and capital shortfalls, with limited discretionary spending, and most budgets are tied up in statutory duties and fixed costs. Several Committees warned that Departments will be forced to consider cuts to programmes and front-line services. Departments warned that the draft Budget threatens their ability to meet their statutory duties and Programme for Government commitments and to maintain essential services for vulnerable populations. Statutory Committees indicated their understanding of the constrained fiscal context in which we find ourselves. They acknowledged that there is considerable pressure on the public purse and that difficult decisions will need to be made. We look forward to hearing Members' comments and the Minister's response. Once again, we are grateful that he agreed to respond to the debate. We hope that the debate will be useful at least in flushing out some of the issues in the Assembly. I will close my comments as Chairperson of the Committee for Finance there, having welcomed the fact that we are able to have the debate. I will make a few remarks in a party capacity. It is, I am afraid, deeply disappointing and, frankly, somewhat farcical that we are debating a report on a draft Budget that has not yet been signed off by the Executive. That is an indictment of the Executive and their failure to take responsibility for the public who elected them and all who sent them here to improve their lives and public services. We are now six weeks into a new financial year, which means that, as of Wednesday this week, we will be six weeks, I think, into the Executive's being in breach of the law. That should be a grave matter for any Government: all Governments should operate according to both the letter and spirit of the law. The Northern Ireland Act is quite clear that a Budget must be passed before the beginning of the financial year. There is no Budget at all at the moment. We are in the surreal situation where we have a draft Budget. Its status is kind of unknown: it is sort of in the ether, and we are debating it as a draft. When it was published in January this year, the Minister said that it would be transformative. Now, apparently, he himself has disowned it. Certainly, other Ministers appear to have no interest whatsoever in taking responsibility for agreeing a Budget. We are less than a year from the dissolution of the Assembly at the end of the mandate; a mandate that began with the First Minister, the deputy First Minister and the then Finance Minister talking about the need and, indeed, the urgency of passing a multi-year Budget and the opportunity to do so. Next month, we will be a year on from the spending review that was published in London. Again, we were told that we would soon get a multi-year Budget. There was in exercise in which Departments were encouraged to draw up five-year business plans, four-year capital budgets and three-year resource budgets. We were to move to a brave new world, yet here we are: six weeks into the new financial year, there is no sign of a Budget being agreed. It is a genuinely farcical situation. Of course, it is an extremely tight settlement, and, of course, this chaotic UK Government are not prioritising Northern Ireland. I do not think that anybody in the Chamber could think that they were, although it was somewhat surreal to hear DUP Members "rejoice" at the idea of a Reform Government, which, I would say, would care even less about this place. However, when the Opposition and I question the Executive's failure to set a Budget, we are told that we are simply speaking up for the Brits, as it were. That is a shocking and pathetic indictment of an Executive who cannot and will not take responsibility for themselves. It is clear that the UK Government are not prioritising this place, but that cynicism and their indifference is made worse by Executive ineptitude. Those two things go hand in hand. The Treasury is deeply cynical about this place. I know that better than most, not least because of my chairpersonship of the Finance Committee. The Government and Treasury are not prioritising us. We are not at the top of their list, not only for funding but for attention. Whatever the colour of the Government in charge in London, yet and all, the Executive, rather than take responsibility for us, seek to constantly shift responsibility on to that UK Government, who, they say, do not care about this place. In doing so, they fail the public. As Chair of the Finance Committee and leader of the Opposition, I certainly support the Executive's getting the best possible financial settlement for this place. That is critical. Clearly, we are in the situation where we have a higher level of need, for all the reasons that I have outlined and that we all know, including the legacy of conflict, our rurality and our ageing population.

Given the cynicism that exists in London, which is real and pernicious, the problem will ultimately be solved only when there is a new constitutional dispensation, but it is made worse when the Executive refuse to take responsibility .The two main parties shift the blame to each other and then simply say, "We cannot do anything until the UK Government step in". We have a farcical and chaotic situation in which, in the final year of what was supposed to be a new start in our transformation of public services, we have no idea at all whether there will even be a Budget. I also ask the Minister whether he will share with the Finance Committee and the House letters that were sent by his Department's permanent secretary to all Departments but were, unacceptably, withheld from the Finance Committee. I do not know why they were withheld, but I would like to know whether he was responsible for not sharing that information with us. We should know what the situation is. Permanent secretaries are getting letters from his Department stating, "There is no Budget, so go on spending for the time being, and, fingers crossed, one will be agreed by the summer". If a Budget is not agreed by the summer, the public should know who is responsible for that: the Executive. They have not taken their responsibilities seriously, all the while awarding themselves a pay rise while they get into their chauffeur-driven cars and shifting blame to other people. That is not good enough and is not acceptable. I hope that, eventually, we will be in the Chamber to debate an agreed Budget.

2,415 words. Text as published by the Northern Ireland Assembly.

Assessment

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Assessed 21 October 2026 at 15:35 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

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