25/02/2011

Water Charges 'Backed By NI Advisory Group'

A semi-official body set up by the NI Executive to advise on the economy has been giving its considered reaction to the Stormont draft Budget.

It has backed the introduction of water charges and also said not enough priority is being given to the four departments designed to boost the economy.

They said that Enterprise, Employment, Education and Regional Development - being the main 'drivers of the economy' - should have their budgets prioritised, while also looking seriously at raising much-needed revenue from fresh sources - such as implementing water charging.

Enterprise Minister Arlene Foster established the Economic Advisory Group (EAG) in May 2010 to create a focused group of experts, from economics, business and skills and it has now responded to the NI Executive's financial plans.

Speaking on behalf of the Group, the Chair of EAG, Kate Barker said: "While we recognise the challenge faced by the Executive in agreeing the draft Budget, we firmly believe that it is essential that the Executive focuses on driving most value from the resources it has at its disposal."

Referring to the departmental budget allocations she said: "A key concern for the Group is the need for prioritisation towards the main 'economy' departments, including the Department of Enterprise, Trade and Investment; Department for Employment and Learning; Department of Education; and the Department for Regional Development, given the current economic environment and the underlying economic issues prevalent in Northern Ireland.

"The Executive cannot realistically hope to stem the continued rise in unemployment if funding to the main economic departments has been targeted for reductions," she said.

EAG members - including banking and business leaders - said the Department of Enterprise alone is losing 14% of its budget and Ms Barker added: "EAG would also advocate that the Budget is 'economy proofed' to ensure that resource allocations to departments has the economy at the forefront of the decision-making process."

The Group also highlighted the need for "further investigation on revenue generating options", including the sale of capital assets and the contribution made from NI households in relation to rates, water and sewage - water charging - as well as identification of further efficiencies within some NI departments.
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She said: "Furthermore, as the cornerstone of the Executive's new Economic Strategy currently being developed is to provide private sector growth, analysis is needed on the impact of the draft Budget allocations on the private sector."

In conclusion, the EAG Chair stated: "This Budget process provides the opportunity, albeit in difficult circumstances, for the NI Executive to set the tone for the progression of the local economy over the next four year period and beyond.

"This should be reflected in a focused Budget, intent on rebuilding and rebalancing the local economy toward a private sector-led, high value economy, with the necessary resources in place to facilitate this transition," she concluded.

The pre-Christmas Budget deal announced by the Stormont Finance Minister, Sammy Wilson said this would involve a major sell-off of publicly-owned assets and other measures including £150m generated from an inflationary increase on rates, £16m brought in from a levy on plastic bags and £80m from housing association assets would be among the proposals.

However, he set no date for the introduction of water charges that now seem unlikely in the foreseeable future - despite EAG recommending "further investigation on revenue generating options".

Also critical, was a report compiled by management consultants last month on behalf of the Northern Ireland Council for Voluntary Action said the draft plan was a "patch and mend approach".

In response, Sammy Wilson said he would only look at raising taxes when the "recession is over" after the NICVA report - complied by Price Waterhouse Coopers - called for "unity of purpose" within the NI Executive.

Sammy Wilson also responded to the report's criticism that said he 'did not exhaust all possible sources of additional revenue' in the Executive's budget - with taking possible extra taxation overlooked.

"We have to take into consideration the fact that we are currently in the middle of recession," Mr Wilson responded.

Meanwhile, the Ulster Unionists and SDLP have so far refused to support it, with the SDLP leader Margaret Ritchie describing it as "lazy" earlier this week.

The budget has also been criticised by the Stormont Finance Committee itself.

See: Wilson Supported Over NICVA Budget Report

See: NI Budget Revealed At Stormont

(BMcC/GK)

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