Oxford Economics analyses Budget implications

Budget Analysis

NICVA gives careful consideration every year to the Chancellor of the Exchequer's Budget speech and convenes a panel from the voluntary and community sector to comment on the implications of the Budget on the day.  People everywhere awaited this year's budget with some trepidation given the economic circumstances.  Many in the voluntary and community sector expected much of what was in this budget and realised that public expenditure would be cut sharply whichever Party or Parties came into power. 

The Chancellor has announced cuts in real terms of 25% over four years. A public sector pay freeze, a freeze to child support level, a cut in welfare by linking it to the Consumer Price Index rather than the Retail Price Index, VAT increased to 20%, £1000 increase in personal allowances and a modest increase and the indexing of the state pension to earnings, prices or 2.5%, whichever is the greater.  There will be lots of analysis to be done.   

To help voluntary and community organisations understand the implications NICVA has commissioned Oxford Economics to provide us with some budget analysis.  They have given us an initial general overview of the UK budget which you can access here.   As more information becomes available they will provide us with a paper in early July on the public expenditure implications for Northern Ireland which we will make available.  Within a short period of time Northern Ireland should be able to forecast what the Northern Ireland Block Grant is likely to look like for the next four years.  However we will not know definitely the position until the English Spending Review is completed and announced on the 20 October 2010 as the Barnett formula links Northern Ireland's spending limits to spending in England.  

Northern Ireland's settlement or Block Grant is then a matter for decision by the Northern Ireland Executive.  The Northern Ireland Executive will conduct its own Spending Review and then decide on its own spending priorities and these do not have to be the same as England.  Northern Ireland could have £1 Billion less, in real terms to spend than it might have expected. 

That makes this spending review the most critical in living memory for voluntary and community organisations involved in the delivery of public services. 

The full Budget document is available at HM Treasury website.

Download the full analysis report below