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Budget 2016-17

Part of Executive Committee Business – in the Northern Ireland Assembly at 4:45 pm on 19th January 2016.

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Photo of Anna Lo Anna Lo Alliance 4:45 pm, 19th January 2016

I welcome the opportunity to outline briefly the discussions of the Committee for the Environment on the Budget for 2016-17. Departmental officials briefed the Committee at its meeting on 14 January. Officials discussed the in-year monitoring position, the transfer of functions from DOE to three new Departments and the budget for 2016-17.

The Committee is aware that the Budget for 2016-17 is based on the new nine-Department model. As current DOE functions are being split over three Departments, the Committee sought clarification on what funding would be available for current DOE functions following the transfer. Officials advised the Committee that a 5·7% reduction had been applied to the resource budget. That will present challenges to the new Departments as they seek to maintain the delivery of priority services.

The Committee is aware that approximately £16 million resource has been allocated for road safety and policy and strategic planning and policy in the Department for Infrastructure and approximately £28 million for the environment functions in Department of Agriculture, Environment and Rural Affairs (DAERA). Officials also advised that £56 million had been allocated to the Department for Communities for local government and the historic environment division, although that is not clear from the Executive's Budget document.

The Committee has sought to ensure that the current environment functions receive the appropriate budgetary and policy weight in their new Departments and that there is no diminution of planned programmes. The Committee has been advised that, following the May elections, the June monitoring round will provide new Ministers the opportunity to reallocate and realign budgets to reflect their priorities more closely.

There are so many priority areas in the current functions of DOE: local government, which recently underwent its own significant reform and has faced financial challenges; the natural environment fund, which provides important funding for projects that aim to protect our environment and our precious biodiversity; and road safety. The Committee has stressed the need for a communications strategy to raise public awareness of the provisions of the Road Traffic (Amendment) Bill, which recently passed its legislative stages in the Assembly. However, that is certainly not an exhaustive list, and the Committee is concerned that those functions may be diluted in a larger Department. The Committee will reflect that in its legacy report. That concludes my comments as Chairperson of the Committee.

I now wish to say a few words on behalf of the Alliance Party. Our party recognises that the Budget is for just one year — 2016-17 — with a four-year Budget to follow. However, that does not change the fact that this Budget is not strategic and was not subject to public consultation. Although the figures balance, it does not have any mechanism for making public finances more sustainable. There is also no mention of revenue raising. This Budget is predicated on a 100% cuts-and-reallocation basis. We believe that there are missed opportunities to reform the health service and education, to address the costs of a divided society and to invest in the economy, especially with a decision now taken on the reduction of corporation tax from 1 April 2018. We know that corporation tax is important for economic growth, but it cannot deliver the outcomes that we want without investing in key economic drivers, especially skills, yet Northern Ireland is reducing investment in higher education.

The £60 million cut from last year's Budget compounds a pre-existing gap between us and the rest of the UK of about £40 million. I acknowledge the announcement today of an increase of £20 million in funding for DEL for this year. The Budget prioritises health and education at the expense of the economy, despite the Programme for Government stating that the economy should be the top priority. In fact, you could argue that the scale of protection of those budgets creates less incentive for reform of those two Departments. The Budget provides a 2% increase to Health, which has a major impact on all other departmental budgets. In fact, 2% is not really enough without reform and reconfiguration of the health service. Investment would need to be around 5% to keep up with demand. There is a case for some protection of the health budget, but there is significant scope for reform in the health sector, driven in part through benchmarking, market testing and reforms to the estate.

The Alliance Party accepts that Northern Ireland's financial situation is very serious. However, we do not believe that the Budget is sufficiently prudent. We therefore oppose the motion.