Northern Ireland Secretary Chris Heaton-Harris warned – as he set out his budget for Stormont departments – that all spending would be reviewed.
Mr Heaton-Harris also said the Government would need to look at wide-ranging options for revenue-raising in Northern Ireland, and signalled that water charges would be examined.
While he pledged to increase health and education spending, he also said that the Department of Education would need to make significant cuts to its spending trajectory.
While outlining his spending plans, Mr Heaton-Harris repeatedly delivered a message that it should be Northern Ireland’s politicians, rather than himself, setting a budget.
The devolved powersharing institutions collapsed when the DUP withdrew support earlier this year, and the Northern Ireland Secretary made clear that he believed departmental spending had since run out of control.
He has now revealed the measures which he said would bring spending “under control”.
The health service is by far the largest recipient of block grant funding provided to Northern Ireland.
But Northern Ireland has the longest hospital waiting lists in the UK and several emergency departments have recently reported severe pressure, with one hospital temporarily closing its doors to new admissions.
Mr Heaton-Harris said his budget would address “critical health pressures”.
“For health, this budget provides £7.28 billion in funding; an increase of £228 million above 2021/22 spending, which included significant Covid-19 funding, or £786 million if we compare to last year’s funding excluding the one-off Covid-19 funding,” he said.
“This will protect spending to address the critical health pressures in Northern Ireland.”
The Northern Ireland Secretary also said the allocation would ring-fence funding for abortion services.
While Mr Heaton-Harris has increased education spending, he delivered a warning that the current spending trajectory would have to be curtailed.
He said: “For education, this budget provides £2.6 billion in funding, which is an additional £286 million on top of last year’s spending.
“This will protect spending for programmes such as free school meals, home-to-school transport, the Extended Schools and Sure Start programmes, all of which support those who need it most.
“However, even this level of increase will require significant reductions in current spending trajectory levels to live within budgetary control totals.
“This will affect funding for high-spend areas such as the Education Authority’s block grant and the Aggregated Schools budget.
“As some costs are demand driven, this will have impacts.
“However, these are unavoidable given the scale of the overspend risk facing the department.
“The required action to curtail expenditure must be taken by all education spending areas in order to live within budget.”
– Infrastructure and public transport
Mr Heaton-Harris said he was increasing funding for infrastructure, but delivered a warning that public transport fares would have to rise.
He said there would be a 4.4% increase in resources for “critical infrastructure networks”.
He added: “This increase will sustain vital infrastructure support that is so important to the Northern Ireland economy.”
Turning to public transport operator Translink, he said: “We recognise steps will also need to be taken to improve Translink’s sustainability through uprating Translink fares.
“This will help to reduce the budget pressure, whilst ensuring that the increase remains below the level of inflation.”
– Other departments
Mr Heaton-Harris said his budget would protect funding for the most vulnerable by safeguarding spending levels in the Department for Communities at current levels.
He said this would ensure programmes such as the Discretionary Support Grant could continue.
He added that increased spending in health and education, as well as lesser increases afforded to infrastructure and justice, meant the Department for Economy would face a cut, while departments including the Executive Office and Departments of Finance and Agriculture, Environment and Rural Affairs would remain broadly at similar funding levels as last year.
While giving no clarity on when people in Northern Ireland could expect long-awaited energy support payments, Mr Heaton-Harris did deliver a message to Stormont departments on their energy usage.
He said: “I do expect the Northern Ireland departments, as some of the largest users of energy in the region, to be pragmatic in their approach to their energy bills by ensuring they are getting the best, most cost-effective deals possible.
“This will reduce pressures on the Northern Ireland budget and in turn help protect funding to serve the public.”
– Public sector pay
With Northern Ireland braced for a series of public sector strikes this winter, including by healthcare staff, Mr Heaton-Harris said he would be increasing public sector pay. But he did not specify if this would meet pay review body recommendations.
He said that he appreciated the pay awards would “not go as far as many workers would wish”.
Asked by the PA news agency if there was enough in the health budget to award pay increases for nurses who have voted to strike, Mr Heaton-Harris said: “I honestly don’t know, I’d like to think so.
“I’d like to think people will see that we’ve done everything we possibly can to both protect services and provide the salary increases that people asked for.”
– Capital spending
The Northern Ireland Secretary said his budget provided continuing investment to ensure projects such as the York Street Interchange and the A5 and A6 road schemes could progress.
He added: “It also ensures sufficient funding to meet departmental capital commitments that can progress in the absence of an executive.”
– Budget for next year
Mr Heaton-Harris said he wanted the budget for 2023/24 to be set by local ministers at Stormont.
He said: “I will continue to work towards the restoration of an executive but I recognise that consideration needs to be given to a sustainable and strategic budget outlook for 2023/24.
“If the executive has been restored in time for a budget for 2023/24, the UK Government will continue to work constructively with executive ministers, including on a sustainable budget that works for the people of Northern Ireland and supports economic growth.
“My department will continue to work closely with the Northern Ireland Department of Finance ahead of the next financial year to identify what steps could be taken.
“Amongst the options we will examine will be water charges and/or increasing income from regional rates, to ensure citizens in Northern Ireland, and all taxpayers are treated fairly and the 2023/24 budget is balanced from the outset of the year.”