NICVA responds to the NI Budgetary Outlook 2018-2020
NICVA welcomes the publication of this briefing paper on the Budgetary Outlook 2018-2020 in terms of providing an insight into the pressures facing the Northern Ireland budget, thereafter there is little to welcome.
NICVA recognises the key point in the document that Northern Ireland’s existing expenditure profile far exceeds income available in the period 2018-2020. We recognise that the public expenditure freeze mandated by the UK Government since 2010 has meant a real terms reduction in resource spending which year on year has led to an annual round of cuts.
NICVA supported the Northern Ireland Executive in its strategic attempt to deal with this situation with its radical shift in planning a Programme for Government which would be centred on an outcome based approach. It recognised that ‘doing more with less’ was a mantra that runs out of road and that public services would deteriorate as they became starved of cash. It is disappointing that we still appear to be locked into the old approach which is dominated by a cuts agenda most likely to fall on what departments regard as discretionary or peripheral expenditure. All of the scenarios outlined heavily rely on this approach.
NICVA does recognise that in trying to balance any budget there are limited actions that can be taken; cut expenditure, increase income or a combination of both. NICVA believes that all options must be considered and in the absence of a significant uplift to the Block Grant and we should explore all revenue raising options.
NICVA supports the need for increased income generation but with the proviso that this must be fair and follow progressive taxation policy linked to ability to pay and options are fully tested to consider and avoid perverse incentives or outcomes. NICVA advocates specifically that the cap on domestic rates for properties should be removed and rates increases should be considered.
NICVA stresses that decisions on the Northern Ireland budget should be driven by Outcomes Based Accountability and upon the effectiveness of programmes of activities in delivering the outcomes set out in the Programme for Government. The Outcomes Based Accountability model can assist in decisions around allocation of budgets and enable resource decisions to be taken using the likely impact of an increase or decrease in funds. This results in clearer linkages between budget allocations and Programme for Government outcomes.
Delivery of the Programme for Government not only necessitates that resources are allocated to appropriate areas but also that the infrastructure required to assist delivery is resourced. Creating a balanced budget by taking short-term and short-sighted budget decisions and targeting areas seen as ‘discretionary’ is unsustainable and will have unknown long-term impacts on communities, the economy and the environment. This presents a real and obvious fear for NICVA. This includes a number of the proposals set out in the budgetary briefing such the shutdown of the rural affairs programme in all three scenarios, not without irony, by the Department for Agriculture, Environment and Rural Affairs. Why was Rural Affairs considered important enough by ministers to be included in the department’s name but dumped instantly by inescapable financial pressures? We expect similar expedient financial decision-making to pervade other departments. Moving towards an Outcomes Based Accountability model indicates the need for resourcing based on the return it is likely to achieve and the contribution made to achieving the Programme for Government targets. Likewise, it makes no sense to continually reduce funding to arts organisations that enhance the offering of tourism when Northern Ireland is trying to grow that part of the economy.
NICVA believes it is still impossible to make a meaningful response to the briefing in the absence of any published assessments of what programmes work best and those that haven’t. It is clear, however, that short-term solutions will only push current problems further down the line and make them harder to deal with in the future, resulting in further inefficient use of resources. We acknowledge that we need ministers in place to take these strategic decisions but anything that goes against strategic spending plans is counter-productive.
The key to Northern Ireland’s long-term future is the need to progress key transformation programmes as outlined in the briefing in areas of health, education, housing, justice and the prioritisation of the allocation of resources towards delivering positive outcomes in these areas. These transformation programmes will have long-term positive impacts and cannot be allowed to be pushed further down the road. Any further delay in getting transformation underway will only result in it being more difficult to address in the future and requiring more resources to plug the gaps in the meantime.
NICVA is concerned that the voluntary and community sector, an essential partner for delivering services and transformation alongside government, will be disproportionately impacted by any cuts to the resource budget. The voluntary and community sector in many areas are the co-deliverers of the Programme for Government and cuts to the budget allocated to organisations and their programmes will severely impact their ability to deliver these outcomes. This would be a perverse contradiction of the intention of the new Programme for Government and will have a disproportionate effect on those who are already among the most vulnerable.
NICVA reiterates its support for the releasing of this information in the briefing paper into the public domain, unpalatable as it is. Northern Ireland needs an open and honest approach from government, politicians and their civil servants on the funding problems we face if we are to agree the best solutions. We would like to emphasise the need to move away from short-term budget planning to a longer term, outcomes based approach if we are to see positive and transformative impacts for communities. One-year budgets are part of the problem as they destroy good planning in government and organisations We acknowledge the need to increase income generation and support all options being considered. We want to ensure that budget planning in Northern Ireland goes in a productive direction and address the real challenges of the future.