Chris Heaton-Harris sets Budget for 2023-24 and says future Barnett boosts will be used to pay £297m debt

The Secretary of State said the context of setting the Budget had been ‘very difficult’.

In a statement on the North’s finances laid at Westminster on Thursday, Mr. Heaton-Harris revealed the Treasury had agreed to provide some flexibility for the repayment of a £297 million overspend across all Stormont departments in 2022-23.

“With agreement from the Chief Secretary to the Treasury [John Glen] flexibility has been granted on the repayment of the £297 million overspend from the 2022-23 Budget.

“This will provide some protection to front line public services in Northern Ireland from having to take the most severe reductions. However, difficult decisions remain in order to live within the funding available,” he stated.

The £297m ‘black hole’ had already been whittled down from a £660m estimate put forward by the former Finance Minister Conor Murphy last year.

This was achieved, Mr. Heaton-Harris and Colin Perry, Director of Economy and Protocol at the Northern Ireland Office, told the Northern Ireland Affairs Committee (NIAC) this week, by cutting funding commitments made by former Executive ministers that were leading to overspends.

In his statement on Thursday, Mr. Heaton-Harris, said that any in year increases to the North’s ‘block grant’ under the Barnett formula (the Six Counties is supposed to get more money when the British Government increases government expenditure in Britain-only) will go towards paying down the £297m overspend.

If there remains a balance money will be taken from previously announced public service funding allocations in the North to pay down the debt.

Mr. Heaton-Harris said: “I am committing any future in year Barnett consequentials for 2023-24 to repaying the Reserve claim. Should this not amount to £297 million, I will work with HM Treasury to reallocate funding from previously announced Northern Ireland funding packages, with the residual to be repaid in 2024-25.”

The Secretary of State claimed the North receives more funding per capita than regions of Britain.

"The UK Government has for many years recognised the unique challenges Northern Ireland faces. We have provided around £7 billion in additional funding to Northern Ireland since 2014, on top of the Barnett-based block grant.

“The Northern Ireland Budget per person is around 20 per cent higher than equivalent UK Government spending in other parts of the UK.

"Yet, the level of public services offered are still not affordable and outcomes are not improving. We need the Executive back so that they can progress much needed and long promised public service transformation,” he stated.

On Thursday, Mr. Heaton-Harris outlined exactly how much each of the Stormont departments will have to spend in 2023-24.

The allocations were broken down by department and category.

Each department received a ‘Non Ring-fenced Resource Departmental Expenditure Limit (DEL)’ budget for the ongoing cost of providing day-to-day services and operations; a ‘Ring-fenced Resource DEL’ budget ring-fenced by the Treasury which cannot be used for purposes other than stated; and a Capital DEL for capital expenditure on schools, hospitals and roads, for example.

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The Department for Communities and the Department for Economy both received small allocations as Financial Transactions Capital that can only be used to provide loans to, or equity investment in, the private sector.

The Budget for each department is as follows:

Department of Health

Non Ring-fenced Resource DEL, £7,300,895,000; Ring-fenced Resource DEL, £203,674,000; Capital DEL, £468,620,000 – Total: £7,973,189,000.

Department of Education

Non Ring-fenced Resource DEL, £2,576,508,000; Ring-fenced Resource DEL, £2,583,000; Capital DEL, £218,618,000 – Total: £2,797,709,000.

Department for Economy

Non Ring-fenced Resource DEL, £771,994,000; Ring-fenced Resource DEL, £614,046,000; Capital DEL, £245,857,000; Financial Transactions Capital, £2,853,000 – Total: £1,634,750,000.

Department of Infrastructure

Non Ring-fenced Resource DEL, £523,429,000; Ring-fenced Resource DEL, £136,809,000; Capital DEL, £792,422,000 – Total: £1,452,660,000.

Department of Justice

Non Ring-fenced Resource DEL, £1,156,671,000; Ring-fenced Resource DEL, £93,032,000; Capital DEL, £128,764,000 – Total: £1,378,467,000.

Department for Communities

Non Ring-fenced Resource DEL, £861,619,000; Ring-fenced Resource DEL, £17,596,000; Capital DEL, £216,056,000; Financial Transactions Capital, £25,592,000 – Total: £1,120,863,000.

Department of Agriculture, Environment and Rural Affairs

Non Ring-fenced Resource DEL, £579,775,000; Ring-fenced Resource DEL, £35,875,000; Capital DEL, £115,669,000 – Total: £731,319,000.

Department of Finance

Non Ring-fenced Resource DEL, £147,453,000; Ring-fenced Resource DEL, £53,143,000; Capital DEL, £37,908,000 – Total: £238,504,000.

The Executive Office

Non Ring-fenced Resource DEL, £181,842,000; Ring-fenced Resource DEL, £2,732,000; Capital DEL, £11,983,000 – Total: £196,557,000.

Total Department Planned Spend (including budgets for several non ministerial departments).

Non Ring-fenced Resource DEL, £,14,211,967,000; Ring-fenced Resource DEL, £1,167,984,000; Capital DEL, £2,239,717,000; Financial Transactions Capital, £28,445,000 – Total: £17,648,113,000.

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In his statement Mr. Heaton-Harris said: “On the resource side, this Budget position delivers: For Health, this Budget provides £7.3 billion in funding.

"It also ring-fences funding for abortion services, as ensuring availability of services is a statutory duty on me as the Secretary of State for Northern Ireland.

“For Education, this Budget provides £2.6 billion in funding. For Justice, this Budget provides £1.2 billion in funding.

“For Economy, this Budget provides £772 million in funding, including £1.1 million for the Public Service Obligation route from City of Derry Airport to London.”

Announcing the Budget the Secretary of State said the North raises less revenue than Britain but enjoys higher public service provision.

"My department has continued to work closely with the Northern Ireland Department of Finance on a sustainable and strategic approach to public finances, which includes options for revenue raising in line with the rest of the UK.

"The lower levels of revenue generation but higher public service provision in Northern Ireland compared to the rest of the UK is unsustainable,” he stated.

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