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We face demographic pressures which will place further strain on key services, especially health....
Source: NISRA Over 65s to increase by 27% between 2015 and 2025
1700
1750
1800
1850
1900
1950
2000
2050
NI Population
Financial Context
• NI continues to receive more in budgetallcoations than it pays for in taxation
• The economy is more reliant on the publicsector than other areas of the UK
NI Fiscal Deficit - Trend
4000
5000
6000
7000
8000
9000
10000
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
£m
illio
n
Fiscal Deficit
Fiscal Deficit
Public Expenditure Context
• The Chancellor announced that even thoughworld economic growth has been reviseddown, the UK GDP forecasts would see stronggrowth over the next 5 years.
• Despite this growth, the UK Government iscontinuing its policy of driving down deficitand debt and public service spendingcontinues to be tightly constrained.
UK Spending Review
• The UK Spending Review set the budgets forWhitehall departments up to 2019-20 forResource DEL and 2020-21 for Capital DEL.
• Whitehall departmental spending will reducebut on average, will fall at less than half therate of the previous five years.
PESA REGIONAL COMPARISONS
0
50
100
150
200
250
300
1. Generalpublic
services
2. Defence 3. Publicorder and
safety
4. Economicaffairs
5.Environment
protection
6. Housingand
communityamenities
7. Health 8.Recreation,culture and
religion
9. Education 10. Socialprotection
Ind
ex
(UK
ide
nti
fiab
le E
xpe
nd
itu
re =
10
0)
2013-14 Expenditure on Services by Region, per head indexed
England
Scotland
Wales
Northern Ireland
How Northern Ireland is Funded
Source: Budget 2011-15
45%
55%
TOTAL FUNDING
AME
DEL
93%
5%2%
DEL
HMT DEL
REGIONAL RATES
RRI BORROWING
SR 2015 – NI Outcome
£million 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
Non Ring-
fenced RDEL9,661.5 9,745.0 9,821.0 9,827.5 9,853.8 -
CDEL 957.3 1,009.6 1,036.0 1,073.2 1,126.3 1,184.7
FT CDEL 104.3 113.6 100.7 76.4 66.1 54.0
UK 2016 Budget – NI Outcome
£million 2016-17 2017-18 2018-19 2019-20
Non Ring-fenced RDEL 5.796 64.934 69.279 70.154
CDEL 3.024 1.173 3.768 5.123
NI Air Ambulance 2.000 1.500 1.000
SR 2015 & UK 2016 BudgetNI Outcome
• Reducing Resource DEL
(-4.5% real terms by 2019-20)
• Increasing conventional Capital DEL
(+12.9% real terms by 2020-21)
Budget Trends and Forecasts
9200
9300
9400
9500
9600
9700
9800
9900
10000
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
£m
illio
n
Resource DEL Trends and Projections Resource Outturn
Resource Plans
Budget Trends and Forecasts
800
850
900
950
1000
1050
1100
1150
1200
1250
1300
£m
illio
n
Capital DEL Trends and Projections Capital Outturn
Capital Plans
Policy £m
Student Fees 38
Free Prescriptions 30
Concessionary Travel Fares 8
Water Charges 180
Domestic Rates 150
Housing Benefit Top Up 10
Housing Rent Differential 88______
504
We have introduced a number of ‘Super-Parity’ policies. In 2014-15 these cost:
Fresh Start Agreement
• Up to £150m over 5 years to help fund the bodies to
deal with the past;
• Flexibility to use £700m of capital borrowing to fund a
voluntary exit scheme;
• A contribution of up to £500m over 10 years of new
capital funding to support shared and integrated
education and shared housing;
• Up to an additional £350m borrowing for infrastructure
projects;
Fresh Start Agreement
• Funding for investment in fraud and error detection in
the welfare system
• Funding for dealing with paramilitary activity
• National Security funding
• Shared Future funding of £60 million
• £75m of funding from the Republic of Ireland for the
A5
Departments
• Northern Ireland Departments are reducing from 12 to nine.
• The most extensive reorganisation of departmental structures since 1999.
• A Programme Board has been established to oversee the transition to nine departments.
• On 7 July 2015, the Executive agreed to produce the 2016-17 Budget on the basis of the new nine department structure
"A Fresh Start" Implications for Budgets
£m
2016-17 2017-18 2018-19 2019-20 2020-21
VES Borrowing 200.0 200.0 100.0
Shared and Integrated Education and Housing 50.0 50.0 50.0 50.0 50.0
Additional Borrowing for Capital 100.0 100.0 50.0
Welfare - Fraud and Error 25.0 25.0 25.0 25.0 25.0
Welfare - Return of welfare deuctions 20.0 20.0
Security Funding 32.2 34.3 33.7 31.1 28.7
Dealing with the Past 30.0 30.0 30.0 30.0 30.0
Dealing with Paramilitary Activity 5.0 5.0 5.0 5.0 5.0
Dealing with Paramilitary Activity - Monitoring 0.8 0.8 0.8 0.8
Shared Future 12.0 12.0 12.0 12.0 12.0
ROI Funding for A5 25.0 25.0 25.0
Total Budget Implications 500.0 502.1 331.5 153.9 150.7
Capital DEL
Fresh Start Agreement
• The funding package agreed as part of the Fresh Start
agreement will be additional to the Spending Review
envelope
• In addition the Executive will set aside funding for
welfare reform mitigation measures
• Allocations will be carefully monitored and outcomes
reported on.
Welfare Reform Mitigation
£million
2016-17 2017-18 2018-19 2019-20 Total
Welfare Reform 46 89 93 84 310
Tax Credits Mitigation (UC) 14 55 51 51 171
Administration 5 5 5 5 20
Total 64 149 149 140 501Note: totals may not add due to rounding
Source: Professor Evason’s Report on Welfare Reform Mitigations
Budget 2016-17
• Protection for health and social care
• Degree of protection for policing budget
• Unprotected baselines faced 5.7% reduction
• AOCC, NIA and NIAO exempt
• NIA and NIAO have identified savings
Budget 2016-17
• Additional allocations for
– Health £133 million
– Education £40 million
– Legal Aid £15 million
– Roads Structural Maintenance £20 million
– Skills £5 million (plus commitment to £20 million in-year )
• Departmental outcomes ranging from -5.7% for
DAERA to 2.7% for DoH
Budget 2016-17 - Resource £million
Baseline Budget
%
Change
Agriculture, Environment and Rural Affairs 209.8 197.9 -5.7
Communities 820.6 871.2 6.2
Economy 814.3 790.0 -3.0
Education 1,947.3 1,947.5 0.0
Finance 141.5 140.1 -1.0
Health 4,751.4 4,880.1 2.7
Infrastructure 372.0 372.8 0.2
Justice 1,023.9 1,050.5 2.6
The Executive Office 62.2 59.1 -5.0
Non Ministerial Departments
Assembly Ombudsman/Commissioner for Complaints 2.3 2.3 -
Food Standards Agency 8.6 8.1 -5.7
NI Assembly Commission 39.0 39.4 0.9
NI Audit Office 7.7 7.9 2.3
NI Authority for Utility Regulation 0.2 0.2 -6.0
Public Prosecution Service 32.8 31.0 -5.7
Total Planned Spend 10,233.7 10,398.0 1.6
Budget 2016-17 – Capital £million
Conventional
Capital
Financial
Transactions
Capital
Total
Capital
Agriculture, Environment and Rural Affairs 48.8 - 48.8
Communities 148.7 11.0 159.7
Economy 60.1 30.8 90.9
Education 193.7 - 193.7
Finance 33.6 - 33.6
Health 222.6 10.0 232.6
Infrastructure 384.1 - 384.1
Justice 58.0 - 58.0
The Executive Office 5.0 6.0 11.0
Non Ministerial Departments
Assembly Ombudsman/Commissioner for Complaints 0.0 - 0.0
Food Standards Agency 0.1 - 0.1
NI Assembly Commission 2.0 - 2.0
NI Audit Office 0.0 - 0.0
NI Authority for Utility Regulation 0.0 - 0.0
Public Prosecution Service 1.5 - 1.5
Total Planned Spend 1,158.2 57.8 1,216.0
Budget 2016-17 – Centrally Held Funding
£million
Resource DEL
Capital DEL
Financial Transactions
Capital
Delivering Social Change 14.0 15.0 -
Change Fund 7.1 - -
EU Match Funding 1.0 - -
Atlantic Philanthropies 8.0 - -
Air Passenger Duty 2.4 - -
Unallocated Tax Credit Funding 30.0 - -
Paramilitary Monitoring 0.8 - -
Funding for Addressing Paramilitary Activity 10.0 - -
Dealing with the Past 30.0 - -
Shared Future 12.0 - -
Northern Ireland Investment Fund - - 55.8
Shared/Integrated Education & Shared Housing - 50.0 -
Total 115.2 65.0 55.8
Budget 2016-17 – Flagship Projects
£million
2016-17 2017-18 2018-19 2019-20 2020-21
A5 Road 13.2 40.0 53.0 55.0 68.0
A6 Road 21.0 57.0 60.0 60.0 60.0
Belfast Rapid Transport 17.0 9.0 20.0 12.9 -
Belfast Transport Hub 5.8 16.0 40.0 60.0 -
Mother and Children's Hospital 16.0 29.3 62.8 73.0 61.6
Desertcreat 3.9 0.3 18.3 28.2 28.7
Regional & Sub Regional Stadia 9.8 27.0 30.0 15.0 9.0
Total 86.7 178.6 284.1 304.1 227.3
Next Steps
• 2016-17 In-year Monitoring
– Ministers have additional flexibility to realign
departmental budgets in June Monitoring
– Commitments to skills, education etc
– Emerging pressures
– BES