2014-15 June Monitoring Round Summary
The statement covered a range of issues, such as Welfare Reform, reductions in departmental budgets and the realignment of spending among public services. The key measures are summarised below.
2.1% Baseline Reductions to Departments’ Resource DEL
All Departments, with the exception of the DHSSPS and DENI, will face a 2.1% cut in their resource budgets for the 2014/15 financial year. This totals £77.9m, about 0.8% of the Executive’s annual resource budget.
It was also brought to light that the Health Department is facing around £160m of pressure in its current budget, and had slightly overspent in the previous year. The Department will have to manage its budget to meet this pressure, and to access £20m that has been set aside by cuts in the other departments.
The £13m penalty to the Block Grant over the hold-up of the Welfare Reform Bill is due. However, the Executive had already set aside £15m to budget for this in 2013-14, which was carried forward into this year.
The Minister confirmed that the penalty to the Block Grant will be £87m for this financial year, and this has not yet been applied through the monitoring round process. If this came to pass, it would have to be addressed through a future monitoring round or through further reductions in departmental budgets: a 2.3% reduction for non-protected departments was cited.
There is £9.5m of reallocations due to lower than expected interest rate payments from the National Loans Fund on the amount borrowed through the Reinvestment and Reform Initiative (RRI) borrowing. The RRI allows the Executive to borrow up to £200m per year.
These are realignments of departmental budgets internally i.e. taking from one programme and moving it around, with a net balance.
From Table E in the Annex:
- DEL reallocated £1.5m Resource spending from its United Youth Programme to the Youth Employment Scheme.
- DRD took £12m from NI Water for the A8 Belfast-Larne project; and £6.6m for the Belfast Rapid Transport Scheme from various Belfast roads projects (all Capital).
- OFMDFM redistributed £2m of Capital funding from Maze/Long Kesh to Crumlin Road Gaol.
Bids Submitted, Reallocations and Executive Commitments
Departments submitted a total of £344m in Resource DEL bids and £236.3m of Capital DEL bids. Not all of these would have been reallocated, obviously, as there was not that much to go round. £47.5m of Resource and £90.2m of Capital were allocated.
£90.2 in Capital is a substantial figure. The investment in the asset management strategy is designed to bring savings through office accommodation for the wider public sector (as part of DFP’s budget). A large amount also allocated to DRD for various capital projects, and DSD for expanding the Co-ownership Scheme and Urban Regeneration.
The money that was allocated funding includes:
- DCAL: £1.1m for promoting equality and tackling poverty and social exclusion in respect of sports facilities, and £1.4m for Together: Building a United Community.
- DETI: £5m Capital for R&D selective finance projects. An extra £2.5m was allocated to the NI Science Park.
- DFP: £26.6m Capital for the reform of property management/collaborative procurement under the asset management strategy.
- DoE: £0.9m as a Capital Grant to Ards Council to keep Exploris open (for how long is not clear) and £12.8m for local government reform.
- DoJ: £0.5m for the removal of interface barriers.
- DRD: a total of £5m Resource for concessionary travel fares and £26.3 Capital for various projects, including the Belfast Transport Hub and Roads Service.
- DSD: £10m for Co-ownership Scheme and £13.5m for Urban Regeneration.
- OFMDFM: £3.5m for Together Building United Communities and £4.3m for the Historical Abuse Inquiry.
Also, of bids not met:
- DENI: did not receive any allocations to its bids of £22m for maintenance of the estate, £10m for teacher severance costs and £10m for Special Educational Needs (all Resource-side).
- DHSSPS: did not receive any allocations for a total of £160m Resource bids submitted to service: elective care, clinical negligence, specialist services, public health, mental health and learning disability (£9m) Transforming Your Care transitional funding (£21.3m) and unscheduled care (£22m) etc.
- OFMDFM: did not receive any allocation to its bid of £3m for the Victims and Survivors Service.
Capital Reduced Requirements
While there was a small reduced requirement of £5.3m for Resource DEL, there was a rather sizeable £244m on the Capital side. The Executive had already anticipated £132.8m of this last year. That essentially means that there was £91.2m available to reallocate. Table D of the Annex shows that most of the amount returned came from the A5 project, and £35.3 from DCAL through the regional stadia projects.
Provisional Outturn 2013-14
The DoJ underspent its Capital budget by £14.4m last year (20%). As a new department, DoJ had separate arrangements to allow it to carry forward all of its underspent monies into the next year, essentially to allow a transition period of budget adjustments as financial forecasting is tightened up. However, this is the last year to which this will apply, meaning that for 2014-15 any DoJ under - or over-spend will be brought in to the Executive’s Budget Exchange Scheme as a whole.
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