Background to Budget 2016 NICVA 18 April 2016

Transcription

1 Background to Budget 2016 NICVA 18 April 2016 Joanne McBurney Head of Central Expenditure Division DFP

2 Economic Context Improving labour market but structural weaknesses remain

3 We face demographic pressures which will place further strain on key services, especially health NI Population Source: NISRA Over 65s to increase by 27% between 2015 and 2025

4 Financial Context NI continues to receive more in budget allcoations than it pays for in taxation The economy is more reliant on the public sector than other areas of the UK

5 million NI Fiscal Deficit - Trend Fiscal Deficit Fiscal Deficit

6 Public Expenditure Context The Chancellor announced that even though world economic growth has been revised down, the UK GDP forecasts would see strong growth over the next 5 years. Despite this growth, the UK Government is continuing its policy of driving down deficit and debt and public service spending continues to be tightly constrained.

7 Formulation of NI Budget Envelope UK Spending Review Funding Mechanism NI Control Totals

8 UK Spending Review The UK Spending Review set the budgets for Whitehall departments up to for Resource DEL and for Capital DEL. Whitehall departmental spending will reduce but on average, will fall at less than half the rate of the previous five years.

9 Index (UK identifiable Expenditure = 100) PESA REGIONAL COMPARISONS Expenditure on Services by Region, per head indexed England Scotland Wales Northern Ireland General public services 2. Defence 3. Public order and safety 4. Economic affairs 5. Environment protection 6. Housing and community amenities 7. Health 8. Recreation, culture and religion 9. Education 10. Social protection

10 How Northern Ireland is Funded TOTAL FUNDING 5% 2% DEL 45% AME DEL HMT DEL REGIONAL RATES RRI BORROWING 55% 93% Source: Budget

11 SR 2015 NI Outcome million Non Ringfenced RDEL 9, , , , , CDEL , , , , ,184.7 FT CDEL

12 UK 2016 Budget NI Outcome million Non Ring-fenced RDEL CDEL NI Air Ambulance

13 SR 2015 & UK 2016 Budget NI Outcome Reducing Resource DEL (-4.5% real terms by ) Increasing conventional Capital DEL (+12.9% real terms by )

14 million Budget Trends and Forecasts Resource DEL Trends and Projections Resource Outturn Resource Plans

15 million Budget Trends and Forecasts Capital DEL Trends and Projections Capital Outturn Capital Plans

16 We have introduced a number of Super-Parity policies. In these cost: Policy m Student Fees 38 Free Prescriptions 30 Concessionary Travel Fares 8 Water Charges 180 Domestic Rates 150 Housing Benefit Top Up 10 Housing Rent Differential

17 Fresh Start Agreement Up to 150m over 5 years to help fund the bodies to deal with the past; Flexibility to use 700m of capital borrowing to fund a voluntary exit scheme; A contribution of up to 500m over 10 years of new capital funding to support shared and integrated education and shared housing; Up to an additional 350m borrowing for infrastructure projects;

18 Fresh Start Agreement Funding for investment in fraud and error detection in the welfare system Funding for dealing with paramilitary activity National Security funding Shared Future funding of 60 million 75m of funding from the Republic of Ireland for the A5

19 Departments Northern Ireland Departments are reducing from 12 to nine. The most extensive reorganisation of departmental structures since A Programme Board has been established to oversee the transition to nine departments. On 7 July 2015, the Executive agreed to produce the Budget on the basis of the new nine department structure

20 "A Fresh Start" Implications for Budgets m VES Borrowing Shared and Integrated Education and Housing Additional Borrowing for Capital Welfare - Fraud and Error Welfare - Return of welfare deuctions Security Funding Dealing with the Past Dealing with Paramilitary Activity Dealing with Paramilitary Activity - Monitoring Shared Future ROI Funding for A Total Budget Implications Capital DEL

21 Fresh Start Agreement The funding package agreed as part of the Fresh Start agreement will be additional to the Spending Review envelope In addition the Executive will set aside funding for welfare reform mitigation measures Allocations will be carefully monitored and outcomes reported on.

22 Welfare Reform Mitigation million Total Welfare Reform Tax Credits Mitigation (UC) Administration Total Note: totals may not add due to rounding Source: Professor Evason s Report on Welfare Reform Mitigations

23 Budget Protection for health and social care Degree of protection for policing budget Unprotected baselines faced 5.7% reduction AOCC, NIA and NIAO exempt NIA and NIAO have identified savings

24 Budget Additional allocations for Health 133 million Education 40 million Legal Aid 15 million Roads Structural Maintenance 20 million Skills 5 million (plus commitment to 20 million in-year ) Departmental outcomes ranging from -5.7% for DAERA to 2.7% for DoH

25 Budget Resource Baseline Budget million % Change Agriculture, Environment and Rural Affairs Communities Economy Education 1, , Finance Health 4, , Infrastructure Justice 1, , The Executive Office Non Ministerial Departments Assembly Ombudsman/Commissioner for Complaints Food Standards Agency NI Assembly Commission NI Audit Office NI Authority for Utility Regulation Public Prosecution Service Total Planned Spend 10, ,

26 Budget Capital million Conventional Capital Financial Transactions Capital Total Capital Agriculture, Environment and Rural Affairs Communities Economy Education Finance Health Infrastructure Justice The Executive Office Non Ministerial Departments Assembly Ombudsman/Commissioner for Complaints Food Standards Agency NI Assembly Commission NI Audit Office NI Authority for Utility Regulation Public Prosecution Service Total Planned Spend 1, ,216.0

27 Budget Centrally Held Funding Resource DEL Capital DEL million Financial Transactions Capital Delivering Social Change Change Fund EU Match Funding Atlantic Philanthropies Air Passenger Duty Unallocated Tax Credit Funding Paramilitary Monitoring Funding for Addressing Paramilitary Activity Dealing with the Past Shared Future Northern Ireland Investment Fund Shared/Integrated Education & Shared Housing Total

28 Budget Flagship Projects million A5 Road A6 Road Belfast Rapid Transport Belfast Transport Hub Mother and Children's Hospital Desertcreat Regional & Sub Regional Stadia Total

29 Next Steps In-year Monitoring Ministers have additional flexibility to realign departmental budgets in June Monitoring Commitments to skills, education etc Emerging pressures BES

30 Next Steps Budget 2016 Multi- year Budget Resource DEL Capital DEL Northern Ireland (Stormont Agreement and Implementation Plan) Bill Strategic issues