The position of the public finances outlined in the Northern Ireland Draft Budget 2021-21represent a challenging and deeply troubling prospect for the delivery of public services over the coming year. Excluding Covid supports, the core of day to day expenditure in Northern Ireland is expected to remain flat in the coming fiscal year. It is quite clear that the increase in expenditure in 2020/21 did not represent a significant departure in public expenditure and that the financial commitments made in New Decade, New Approach (NDNA) have not been realised.
While the Northern Ireland Budget for 2020/21did include a notable increase arising from a general uplift in UK public spending, much of the increase was as a result of increased funding allocations outlined in NDNA. However, much of this increase in spending was one-off or temporary. When such funds are committed to recurrent expenditure, as was the case in NI, this creates a liability in the budgets that follow. This has clearly been the case for spending in 2021/22. There has been an increase in funding for Northern Ireland through the Barnett formula for this year, but the entirety of this funding must now meet the obligation set out in Budget 2020/21.
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