28/10/2021

Spending Review Creates Significant Challenges For Public Services

The newly announced Spending Review creates significant challenges for public services in NI, Finance Minister Conor Murphy has said.

The Minister said that the Spending Review will not provide an additional £1.6bn per year for Executive departments. When compared to the Executive's 2021/22 Budget there will be an additional £450m, £670m and £866m for day-to-day spending against growing demand for public services. This represents a marginal 0.9% real term increase to the Executive's Budget next year, turning to zero real terms change by 2024-25.

Responding to the Spending Review which sets the Executive's budgets envelope for the next three years, Minister Murphy said: "Years of austerity and more recently the Covid pandemic has placed enormous strain on public services. Our health service in particular is under immense pressure with waiting lists at an unprecedented level. Workers face an increase in National Insurance and families are dealing with a cost of living crisis as a result of rising food and energy costs.
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"This Spending Review was the opportunity to deliver a budget which would have enabled the Executive to rebuild public services and spur economic recovery. However it provides a marginal real terms increase in funding next year which will be far outweighed by increased demands on public services, particularly in light of the ongoing pandemic."

Welcoming the reduction in Air Passenger Duty, Minister Murphy said: "Airports are a crucial part of our economic infrastructure and are key to regional connectivity. The fact that APD does not apply in the south creates an uneven playing field across the island. While it is disappointing that the Chancellor has not abolished APD it is welcome that it has been lowered. However, I would have preferred to have seen this reduction applied sooner than April 2023."

Conor Murphy concluded: "A multi-year Budget at least enables the Executive to better plan and prioritise its finances. The task now for us as an Executive is to make the best possible use of the limited resources available and work together to produce a Budget that brings down waiting lists on a sustainable basis."

Following the Spending Review, the Department of Finance will now work with Departments to prepare the Executive's Budget which will cover the period 2022-2025.

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