Financial pressures ‘will leave ministers facing many unenviable decisions’

Pressures facing public finances in Northern Ireland will leave Stormont ministers having to make “many unenviable decisions”, Finance Minister Caoimhe Archibald has warned.

During an appearance before a Stormont scrutiny committee, a senior civil servant also said savings were not achievable through belt-tightening, but would be aligned to “stopping doing certain things”.

Ms Archibald and Department of Finance permanent secretary Neil Gibson updated MLAs on Wednesday on budget pressures and department priorities.

The Treasury has offered to write off almost £600 million of Stormont debt, conditional on the powersharing Executive raising £113 million and producing a plan to deliver sustainable finances.

The stipulation is a key element of a £3.3 billion financial package drawn up by the UK Government to support the return of devolution in Northern Ireland.

However, Stormont ministers have criticised the Treasury demand and instead agreed last month to a 4% increase in the regional rate, which equates to around £30 million extra in revenue.

Ms Archibald told the Finance Committee she had secured flexibilities after discussions with the Chief Secretary to the Treasury, Laura Trott.

The Finance Minister said: “I have had a constructive meeting with the Chief Secretary to the Treasury on 28 February.

“Treasury’s position remains that the write-off of the £559 million is conditional on raising income through local revenue and the production of a sustainability plan.

“It is my strong view, and one that is shared by my Executive colleagues, that the £559 million of debt exists primarily due to the underfunding of public services.

“However, starting the 2025/26 budget with in deficit of that quantum would do lasting damage to our public services.

“So we must ensure sustainable finances so we can deliver high-quality public services.”

Ms Archibald said the Treasury had recognised the difficulties with a rushed sustainability plan.

She said: “I am therefore pleased to have secured an extended timeframe for an initial scoping and structure of that plan to be carried out by May with the final plan to be produced by August.

“Getting it right is obviously more important than getting it done.

“Recognising the challenges of raising £113 million of additional revenue, given how close we are to the start of the financial year and the limited financial levers at our disposal, the Chief Secretary has agreed that this can be generated over 24 months instead of 12 months.

“The enhanced timeframe for both the development of a sustainability plan and to generate locally raised income is contingent on the Executive delivering a balanced budget.”

Ms Archibald added: “As an Executive, ministers will collectively and individually have to make many unenviable decisions.”

DUP committee member Phillip Brett asked the minister to explain what she meant by “unenviable decisions” within her department.

Ms Archibald said: “We will face a challenging budget like every department and there are pressures that we will have to make decisions around.”

Mr Gibson said: “The harsh reality of the budget pressures means we are in a world of looking down things and saying, ‘Can we stop this? Is this no longer required? Are we definitely the right people to deliver this?’

“The scale of pressures are not achievable through belt-tightening, it is not a little nip or a tuck here, it is a more fundamental assessment of whether everything we do is still a requirement to do.

“And then presenting those options and choices to ministers to make the relevant decision.

“If you ask me to find some little savings or belt-tightening measures, they are not there.

“If there are significant cuts coming to the department it will be aligned to stopping doing certain things.”