The Department of Finance has revealed that the budget for Stormont will have decreased by over £2bn in real terms, citing the impact of inflation. These revelations come from a “financial context” document, which was released in preparation for a consultation on revenue-raising activities. The Secretary for Northern Ireland initiated the document after several departments overspent last year. Specific consultations on measures like water charges are expected to begin by the end of this month.
The Department of Finance computed the funding necessary for day-to-day spending to keep up with inflation since 2021. It found that day-to-day spending in 2024 would be roughly “£2.3bn lower than these calculations would indicate is required to deliver the same level of services in 2021.” The Department further noted that “sustained high inflation has fundamentally reshaped the price of what the public pound can buy.”
In Wales, the government revealed that their funding this year, in real terms, is £900m less than expected two years ago. The commission estimated last month that comprehensive measures of revenue raising would raise less than £1bn annually. As a result, the Department of Finance is encouraging consultations on options like service cuts or transformation in addition to potential sources of financing.
The Northern Irish public sector experienced a £300m overspend last year, which the government must now repay. Stormont departments created proposed financial plans late last year to help repay the debt, with plans being presented to the Department of Finance in September
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