Source · Select Committees · Northern Ireland Affairs Committee
Recommendation 7
7
Accepted
Paragraph: 46
Mandate Northern Ireland Executive to commit to multi-year budgetary settlements for public services.
Recommendation
Single-year budgets and a lack of an agreed Programme for Government have not allowed for long-term thinking and planning for public services and spending in Northern Ireland over recent years. We urge the Executive to commit to returning to multi-year budgetary settlements following the next UK Spending Review as part of its sustainability plan. Even under multi-year budgets, however, Northern Ireland departments are unable to take forward surpluses. We urge the Executive to commit to returning to multi-year budgetary settlements following the next UK Spending Review as part of its sustainability plan. Even under multi-year budgets, however, Northern Ireland departments are unable to take forward surpluses. This matter should be included as part of the upcoming Fiscal Framework discussions between the Government and Northern Ireland Executive.
Government Response Summary
The government commits to multi-year spending reviews every two years, starting Spring 2025, and expects the Northern Ireland Executive to return to multi-year budgets following this. It also clarifies that the NIE can already carry forward underspends via the Budget Exchange system, and reiterates commitment to ongoing Fiscal Framework discussions.
Paragraph Reference:
46
Government Response
Accepted
HM Government
Accepted
The Chancellor of the Exchequer has confirmed a clear process for the Autumn. The Office for Budget Responsibility delivered a full economic and fiscal forecast, alongside the Budget on 30 October. As part of the first phase of the Budget, the Government has confirmed NIE’s funding for 2025/26 at £18.2bn. The Chancellor will set out a multi-year Spending Review in Spring 2025 and set budgets to at least 2027–28. We will also commit to running multi-year spending reviews every two years going forward, which should give greater certainty for budget-planning. As per the New Decade New Approach commitment, we would expect the NIE to also return to multi-year budgets following the conclusion of Phase 2 of the Spending Review. The Northern Ireland Executive is able to access the Budget Exchange system which is a mechanism that allows them to carry forward an underspend from one year to the next, within previously agreed limits and with the consent of HM Treasury Ministers. Further information on these arrangements is in Chapter 12 of the Statement of Funding Policy. The previous UK Government agreed an interim Fiscal Framework with the Northern Ireland Executive to ensure the long-term sustainability and health of Northern Ireland’s public finances. This Government has committed to taking these discussions forward and the Chief Secretary to the Treasury and the Minister of Finance have agreed the next phase of these discussions can begin. I am confident that HM Treasury and the Northern Ireland Department of Finance will consider a range of options to ensure Northern Ireland has the correct tools to ensure financial sustainability and effective public service delivery.