BUDGET Stakeholder Engagement

Transcription

1 BUDGET Stakeholder Engagement Joanne McBurney

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 Budgets than it pays for in taxation The economy is more reliant on the public sector than other areas of the UK

5 m NI Fiscal Deficit - Trend Fiscal Deficit 12,000 10,000 8,000 6,000 4,000 2,000 0 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 Barnett Formula Changes in NI DEL funding determined through the Barnett formula Uses population and comparability factors to determine the impact for NI of public expenditure decisions in England/Great Britain Protection for Health and Education in England has benefited Northern Ireland in recent years

10 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

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

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

13 SR 2015 NI Outcome Reducing Resource DEL (-5.3% real terms by ) Increasing conventional Capital DEL (+12% 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 Implications for Local Budget Moving Forward Due to strategic pressures departments will face budget reductions in the region of 2% Higher if Health and PSNI are protected Higher again if further protections are required

17 Influencing Factors Rates Revenue Raising Measures Super Parity Items

18 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

19 % of GDP What about Welfare? 12 UK Welfare Spend

20 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;

21 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

22 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

23 "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

24 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.

25 Seeking Your View Reductions How does the Executive apply reductions? Targeted approach: How is that determined? Would there be political appetite for that approach? How would that work with new departments? Pro Rata approach: What would be the benefits? What would be the disadvantages? Are there any savings ideas that may merit consideration by departments?

26 Seeking Your View Protections Do the Executive apply protections to services? Which ones? What merits protection? Is protection masking inefficiency?

27 Seeking Your View Services Do we protect key services? How do we define key services? Are we spending too much/little on particular services? What role do you see for the community/ voluntary/ independent sectors in provision of services?

28 Seeking Your View What other issues should the Executive be considering? What work is required now for Budget and beyond?

29 Having Your Say It is important that you are able to contribute to the process. Our Commitment: We will take a record of this meeting We will present your views fairly and without prejudice A summary of stakeholder consultation meetings / evidence will be presented to departments and the Executive

30 Having Your Say Any other Questions?