Report: Oxford Economics on the likely impact of cuts

NICVA Chief Executive Seamus McAleavey said:

“This is the most detailed external analysis yet of what is coming down the track and it makes for painful reading. The coming cuts represent the biggest challenge yet for our Executive and it is vital that the correct decisions are made. The choices made now will shape our economy and society for a generation”.

He continued: “What we need are smart solutions in tough times.” 

NICVA is worried that the cuts could have an unfair and disproportionate impact on voluntary and community organisations that deliver important public services.  Government funding to the voluntary and community sector stands at £260 million, 45% of the sector’s income.  Most of this goes to pay for services which the sector can deliver so efficiently it saves public money.  

If the wrong approach to cuts is taken these services could be cut, which will either remove front line services or cost the taxpayer more in the long run.  

The report examined three potential scenarios for public expenditure cuts:  

• If made across the board they will amount to 8.4% over five years
• Ring-fencing health will mean cuts of 15% across other departments
• Ring-fencing health and education will mean 22% cuts on everything else.  

Clearly the choices we make and the priorities we set will have knock on effects and we need to fully understand those.

Mr McAleavey says that the very last thing that departments should do is to “salami slice” their budgets, by taking cuts across the board.   

“The Executive needs to be fully aware of the wider social and economic repercussions of every decision they make. The very worst thing that could happen is panic or bad choices during the process, or worst of all delaying action which is going to make our problems even greater.”  

What’s next? 

NICVA is in the process of setting up pre budget consultation meetings with each department.  The first of these will be held with senior officials from the Department of Finance and Personnel (DFP) on Tuesday 10 August from 11.00am to 1.00pm.   

For further information go to http://www.nicva.org/events/pre-budget-consultation-event-nicva-members.  If you would like to attend this key meeting contact cathy.breslin@nicva.org

Further Reading

The previous report from Oxford Economics, commissioned by NICVA, is on the website at: http://www.nicva.org/news/oxford-economics-analyses-budget-implications

Other Media

Seamus McAleavey interviewed on Good Morning Ulster, Monday 26 July. Interview is at 1:08.30.
http://www.bbc.co.uk/iplayer/console/b00t5lc7