Budget statement: I am able to deliver a Budget that delivers real term increases

I am today announcing the Executive’s 2020-21 Budget. Development of this Budget began before the onset of Covid-19 and has been overshadowed by the unprecedented Public Health crisis we face.
Finance Minister Conor MurphyFinance Minister Conor Murphy
Finance Minister Conor Murphy

A Health crisis that impacts on every area of our lives. Protecting lives and livelihoods from the pandemic is now our number one priority.

In that regard, Mr Speaker, many members in this chamber will want to know how this Budget will help in our response to Covid-19.

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While we have been able to incorporate some Covid19 measures within the Budget, legislation prohibits us from including the majority of the COVID-19 funding we have received.

Legislation requires me to announce a Budget at least 14 days after I have confirmed to the Assembly the level of funding available from the Secretary of State. I did this on 16 March. In normal circumstances that would pose no difficulty. But we are not in normal circumstances.

Since then the world has changed dramatically. Only the initial £120 million of funding provided for the COVID-19 response was included in my statement of the 16th March.

Therefore this is the amount which can be included in the Budget I am announcing today. We have subsequently received a further £792 million to help tackle Covid-19.

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Mr Speaker, some members may ask if the 14-day legislation has hindered our response to Covid-19. Let me categorically state that it has not. Whilst we cannot include funding in the formal Budget announcement, it has not and will not mean that we will delay any necessary intervention.

Indeed a number of announcements have been made and measures introduced in advance of this Budget. Personal Protection Equipment has been ordered, car parking fees have been removed and public transport has been made free for key health workers– to help those leading the fight against Covid-19.

Funding has been made available to ensure the 97,000 children who are entitled to free school meals do not experience hardship as a result of schools closing.

£370 million has been made available in grants to support some 30,000 businesses so they can continue to pay workers. Let me turn to the Budget I’m announcing today by firstly setting out my approach to rates.

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In terms of domestic properties we have relatively low rates and strong protections for households on low incomes. To ensure no additional burden on households during this difficult and uncertain time I am freezing domestic rates.

While domestic rates are relatively low, business rates are extremely high. Our SMEs have long cited the high cost of rates as a key difficulty. Indeed this was strongly reflected in the Business Rates Consultation. 6 I can today announce the Executive is reducing the non-domestic Regional Rates.

The Regional Rate has been adjusted downward to offset the change in the total rateable value due to Reval2020. In addition, I have made a further 12.5% cut. Today’s reduction will effectively see an 18% reduction on the 2019-20 figure which will benefit all business ratepayers.

Although I had decided to reduce business rates in advance of the Covid-19 threat, this reduction will help with the economic recovery needed on the other side of this pandemic. This regional rates reduction is being funded from the Executive’s existing resources.

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As previously announced, I am also providing a three month business rate holiday to help all business ratepayers, the vast majority of which are SMEs, with the significant cash flow difficulties they face following the Covid-19 health crisis.

This means businesses will see an additional 25% discount to their annual rates bill. This will cost around £100 million and will be funded from the £120 million of COVID-19 funding included in this Budget. In addition I am renewing the Small Business Rates Relief providing almost £20million of relief to 27,000 small businesses.

I am also restoring the rural ATM scheme which helps to sustain cash flow in some of our most isolated rural areas – something which is so important at the current time.

Finally I am delaying rates bills for households and businesses until the last possible moment, with the first bills to be issued in June. This will defer expenses as we await the payments due in June under the Job Retention Scheme and the SelfEmployment Income Support Scheme.

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The Executive will keep these measures under review and we will take further steps should we deem it necessary. There remains around £20 million of COVID 19 funding included in my statement on 16th March which has not been included in this Budget outcome.

This will be added to the other COVID-19 funding and will be used as part of the Executive’s response to the pandemic, which is separate from this budget.

The Budget announced today sets budgets at departmental level, and Ministers will now look to allocating their budget across individual Spending Areas. Once those decisions are made I intend to produce a Budget document for members with that detail in advance of the debate and vote on the Budget in May.

Turning to the Budget itself, the resources available to the Executive remain constrained. In real terms our block grant remains some £360 million below pre-austerity levels when comparing like for like funding.

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Over that time the pressure on vital public services has increased. Public expectations were raised considerably by the New Decade New Approach document.

But the British Government did not provide the funding necessary to deliver these priorities. However I am able to deliver a Budget that, compared to last year, provides real term increases to all departments. In 2020-21, £12.2 billion of Resource DEL will be allocated to departments, with a further £278.6 million to be allocated to the Department for Agriculture, Environment and Rural Affairs for Farm Support Payments which replace the EU Common Agriculture Policy payments.

In addition a further £70 million of centrally held funding will be allocated to departments during the year. On the Capital side, the Executive intend to spend some £1.6 billion next year on a wide range of projects and programmes.

More detail on these allocations is provided in the tables accompanying this statement. There is also some £195 million of Financial Transaction Capital available to the Executive which will be allocated once departmental proposals are at a more advanced stage.

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Going forward, the Executive intends to bring forward multi-year year budgets which provide greater certainty to public services, and facilitate longer term planning.

In that process we will engage in full consultation, which has not been possible for this budget. Mr Speaker, in difficult circumstances this Budget delivers additional funding for our citizens, for our workers, and for our businesses.

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