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Budget 2016-17

Part of Executive Committee Business – in the Northern Ireland Assembly at 6:30 pm on 19th January 2016.

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Photo of Mervyn Storey Mervyn Storey DUP 6:30 pm, 19th January 2016

He is not here, so I can quote him anyway. I kept looking and could not find him.

The unemployment rate in the Irish Republic is 9·7%. In Northern Ireland, it is just 6%. Here we have someone who also overlooks the fact that, at the end of December 2015, we had created 39,000 new jobs. Are we going to dismiss that? Are we going to say that it is not important and is something that you can just set aside? I do not think that is the case. Let us then remember, of course, what Mr Nesbitt said when he said that he feared that the rumours are true and that there will be anything from £500 million to £800 million of additional borrowing. I think those comments stand in stark contrast to the reality of the situation.

Let me turn to the list of questions that Mr Cree had. He gave us a list that I think he deserves answers to because he asked questions that were relevant and pertinent to the issue. He mentioned financial transactions capital. He should have known from the Finance Committee that all FTC to date has been spent, with no funds being returned to Her Majesty's Treasury. Indeed, when I was the Minister for Social Development, I was pleased to be able to allocate a considerable amount of money to co-ownership. I think that co-ownership has been the beneficiary of FTC, and that has helped to deliver affordable housing. I was interested in seeing that we made progress on that.

In addition, I can confirm that the Northern Ireland investment fund is expected to become operational this year, and the funding previously allocated to it in 2015-16 has been redistributed to other projects.

On the June monitoring round flexibilities, I am glad that Mr Cree has recognised the difficulties surrounding the Budget. It is because of that that the Executive have agreed that incoming Ministers will have additional flexibility in the June monitoring round. That will allow them to reallocate funding to their priorities within the overall funding envelope set for their Department as part of the Budget. The availability or otherwise of additional funding in the June monitoring round will not affect that flexibility. However, it means that there is still the opportunity for Committees to influence the spending of Departments. I think that that is a point that the Member wanted an assurance on.

In addition, the announcement by Professor Evason today means that it is clear that there will be additional funding for the Executive to consider as part of the June monitoring round process. That will be an issue that, undoubtedly, the Executive will come back to.

Mr Lunn came to an issue that is one of concern to his party and that it has raised on numerous occasions. That issue is the cost of division. My Department has commissioned the Northern Ireland Centre for Economic Policy to undertake a review of the cost of division. The study will seek to revisit the previous Deloitte work and will update the methodology and provide a contemporary assessment. The work is well advanced, and my officials have received a draft. I hope to present the final report to the Executive in the coming weeks. So, I thought that it was only right that the Member was made aware of that.

Turning to another issue that Mr Cree raised, depreciation, I assure him that I am not expecting any nasty surprises with the ring-fenced resource DEL budget. The Executive have a significant Budget allocation for non-cash depreciation and impairment costs that is more than adequate to cover departmental requirements.

Mr Lunn referred to the social investment fund. He queried the use of the social investment fund to provide training for young people. The Budget for 2016-17 has maintained the level of funding available to the Executive Office to take forward the central funds, which includes the social investment fund and the childcare strategy. Some £14 million resource DEL and £15 million capital DEL are available in 2016-17 under the Delivering Social Change banner. OFMDFM's social investment fund has made significant progress, with commitments in the region of £58 million and delivery of 25 projects now well under way. Seven projects are now operational, with others expected to follow in the coming months. It is a point that was made by one of my colleagues: go to those organisations and locations where they have identified issues such as educational underachievement and social problems in their community and tell them that SIF was a bad idea.

Tell them that it was not the right thing to do. I think that you will find, even in your constituency, Mr Lunn, that it was the right thing to do and was constructed in a way that was meant to deliver for communities. I accept his point about the time that it has taken. However, I think that he will also appreciate that there were particular challenges in bringing all the projects forward.

(Mr Speaker in the Chair)

The Chair of the Health Committee raised a number of issues on the detail of the Health budget. While I will not attempt to respond to all the issues that were raised, I assure Members that my colleague the Health Minister and I agree that health service staff are our greatest asset in delivering health and social care. As someone who, unfortunately, has had to spend much time with my dad in hospital over the last eight months, I know well the service provided by staff in the health service, their dedication and the extreme lengths that they go to. The debt of gratitude that we owe to all those who work in our health service is a given for us all in the House. Whilst the Health Minister fully recognises the hard work of all the staff in health and social care and the contribution that they make, his priority — his first priority — is to protect front-line services and ensure that they are properly staffed to secure the provision of safe and effective services.

The Health Minister made a statement on 8 January that set out the 2015-16 pay award for Health and Social Care staff. That will allow for a 1% non-consolidated payment for staff who are at the top of their pay band and an average spine point rise of 3·7% for those who are not at the top of their pay band. Salaried doctors and dentists at the top of their pay band will also receive a 1% payment. The Health Minister is aware of the RCN's decision to ballot its members in Northern Ireland on industrial action and is disappointed by that decision. While members have a right to take industrial action, it is fully recognised that any such action is regrettable. Reform is ongoing across the health and social care service, and I remind Members that Transforming Your Care is not about reducing our investment in health and social care services; it is about making the best use of the resources that are available to us.

Mr Maskey raised a technical point about the de minimis rule. He referred to the potential difficulties with Departments having to seek Executive agreement to move funds between spending areas in excess of the de minimis level of £1 million. That requirement has been in place for some time and is designed to ensure that funding allocations reflect the priorities of the Executive as a whole rather than those of individual Ministers. However, in light of the complexities of departmental restructuring and the fact that new Ministers will have their priorities, the Executive have agreed that the rule will be suspended for the first monitoring round of the year. I trust that that deals with the issue that the Member raised.

I turn to Mr Eastwood's comments about higher education funding. I fully recognise the need to ensure that our universities remain competitive in a national and, indeed, international context and that the skills needs of our economy continue to be met. A greater level of STEM skills will be required in future years, particularly when the lower rate of corporation tax is introduced from April 2018. It is, therefore, important that our universities adapt to that challenge and prioritise those skills. The Executive allocated an additional £5 million to the Department for the Economy in 2016-17 for skills development, and Members will be aware of the commitment that I gave to increase that funding to the £20 million that we have said needs to be brought forward. That gives an indication that there is a commitment from my party and from the Executive to deal with those issues.

Anna Lo and a number of other Members referred to the strategic nature of the Budget. The Members did not highlight the difficult time frame that the Executive faced or the difficulties involved in restructuring Executive Departments. Members did not highlight the flagship projects and the certainty that it brings to the construction industry, although I am glad that there were Members who referred to the positive comments that have come from organisations such as the Quarry Products Association. But then, of course, there are Members of the House who would like to dispense with that and almost deny that that was said. However, when it is a reality, we have to face up to it. The Members also did not provide any detail of how their parties would have done things differently and still adhered to the limited budget. It is true that the Budget will not provide funding for everything, but I have not heard any credible plans from others on how they would do things differently.

I conclude by saying that we simply need to realise that we face difficult and challenging times. It is undoubtedly a challenge for me and for the Executive to ensure that we manage our finances in a way that delivers and continues to deliver our public services. The public demand nothing better from us than to ensure that we keep our focus on those issues. It is my responsibility as Finance Minister to bring to the House a balanced and sustainable Budget. That is what I believe we have done with this Budget. However, I would like Members of the House who have been critical of the Budget this evening to say whether it is wrong that, today, we vote for an additional £133 million to the health service. Is it wrong that we vote for an additional £40 million to the Department of Education? Is it wrong that we vote for an additional £20 million to the Department for Infrastructure for road structural maintenance, given that that issue was pathetically dealt with or not dealt with by the previous Minister? Is it wrong that, since 2012, 525 new businesses have benefited from the introduction of the empty premises rate relief? Is it wrong that, since 2008, almost 27,000 older people have received around £35 million in rate relief through the lone pensioner allowance scheme?

I know that there are those who have talked about other tax-raising powers. This party is a low taxation party. Let us put the record straight on how we have provided for our community. In Scotland the rate of taxation is £1,337 per person; in England it is £1,465 per person: and in Wales it is £1,550. In Northern Ireland it is £842 per person. If those who want to criticise the Budget have any alternatives for how to best provide for the people of Northern Ireland, it is time they brought them to the House.

This Budget protects and provides, and it prepares Northern Ireland so that it can to continue to make progress in 2016 and beyond. I commend the Budget to the Assembly.