2021 Budget: Murphy disputes Chancellor’s £ 1.6bn increase for NI

Finance Minister Conor Murphy disputed the Chancellor’s claim that Northern Ireland will receive £ 1.6bn more per year for public services.

Rishi Sunak said his budget was the largest annual funding deal for decentralized governments since 1998.

But Murphy said it will create “significant challenges”.

He said it would amount to £ 1.9 billion in daily spending over three years – “not even close” to what is required.

Treasury data shows that budget allocation will mean that daily spending in Northern Ireland will increase by an average of 2.1% in real terms each year through 2025.

Infrastructure spending will increase by an average of 2.5% per year over the same period.

The Treasury said this gave the Northern Ireland executive “sufficient funding certainty” to plan annual spending and provide further future investment in areas such as health, social care and education.

But Murphy said that compared to the executive’s 2021-22 budget, there will be an additional £ 450m, £ 670m and £ 866m over the next three years for daily spending “against the growing demand for public services”.

This, he added, represented a 0.9% real-term increase in the executive budget next year, shifting to a zero real-term change by 2024-25.

“This spending review was an opportunity to provide a budget that would allow the executive to rebuild public services and spur economic recovery,” Murphy said.

“However, it provides a marginal increase in real terms in funding next year, which will be far outweighed by the increase in demand on public services, particularly in light of the ongoing pandemic.”

Murphy said a multi-year budget allows the executive to better plan and prioritize their finances.

Separately, there is an initial budget allocation of £ 50 million from the government leveling fund.

It’s for 11 projects, including the redevelopment of the Dundonald Ice Bowl and the extension of cycle paths in the Belfast city region.

Sunak also said it will cut Air Passenger Duty (APD) in half on UK domestic flights.

A cut in the DPA is a long-standing request from Northern Ireland’s politicians and entrepreneurs.

It will mean a new domestic bandwidth per APD set at £ 6.50.

The fare applies to all flights between airports in England, Scotland, Wales and Northern Ireland (excluding private jets).

The government also announced it a proposal to solve a problem related to the NI protocol concerning VAT paid on second cars arriving in Northern Ireland from Great Britain.

Previously Murphy had already downplayed expectations that the spending review would mean significant additional resources.

Earlier this week, he said there was “little indication” that the government “will provide the investment needed to rebuild public services and spur economic recovery.”

However, he said the ability to produce a multi-year budget would provide the opportunity to “plan better and prioritize finances”.

Stormont does not have a multi-year budget from 2011-2015.

This has made it difficult for public sector executives to plan services, particularly in the healthcare sector.

The finance minister is trying to build consensus among his executive colleagues that most of any additional funds should go to health even if other departments lose.

It aims to publish a draft budget before Christmas which would then go into consultation before being finalized early next year.

The Northern Ireland Institute of Directors said the additional money would be “a gunshot to the local government”.

“It is now up to ministers to harness the incredible potential it presents, with the goal, through targeted investments in key services and infrastructure, to ensure that this region is able to capitalize on the green recovery as we continue to emerge from the coronavirus pandemic.” said the national director, Kirsty McManus.

Retail NI said the Chancellor’s 50% discount for UK retailers was welcome. The organization added that it is “absolutely vital” that Conor Murphy ensures that this also applies to small traders in Northern Ireland.

Matthew Hall, chief executive of George Best Belfast City Airport, said the airport has lobbied the government for the abolition of the APD for many years.

“A 50% reduction in DPA is a middle ground in terms of solving a problem that has placed the aviation sector in Northern Ireland at a competitive disadvantage compared to other regions in attracting new airlines and routes. “, he has declared. “Today’s announcement by the chancellor will not go into effect until April 2023 and does little in the short term to alleviate an industry still decimated by Covid.”

SDLP leader and Congressman Colum Eastwood said the budget was a “grim spectacle”.

“We now have some certainty about multi-year funding, the onus rests with Conor Murphy to actually take responsibility and deliver a multi-year plan to address our waiting list crisis and come up with a credible plan for our economy,” he said. .

Assembly member of the Ulster Unionist Party (UUP) Steve Aiken said an extra £ 1.6 billion a year “underscores the benefit of being part of the fifth largest economy in the world”.

“We still have a long way to go to fully emerge from the Covid pandemic, but this budget, when properly used to support Northern Ireland’s needs, gives us a good chance,” he said.

Democratic Unionist Party (DUP) MP Sammy Wilson said the multi-year budget should help decentralized finance ministers better plan spending.

“The past two years have been unprecedented and the Treasury has responded in unprecedented ways to protect jobs and safeguard employers,” he said.