The 2021-22 Budget - Less for the Same or More for What Works?

The last few weeks have seen hurried consultations released on the draft NI public budget for 2021-22.  These paint a worrying but familiar picture of short-term budgeting struggling to sustain previous departmental spending patterns, rather than long-term budgeting to tackle the cross-cutting challenges and issues that face our society (which rarely fit neatly into the remit of a single department).  The inability of government budgeting over the last five years to go beyond one-year budgeting and respond to many of our long-term investment needs is doubly worrying now that we face additional long-term economic and social challenges from the impacts of Covid-19 and Brexit. 

The budget-related consultations issued by the Departments of Finance, Communities and Health give high-level detail on proposed departmental budgets but little detail on these will translate into funding allocations to different programmes and activities.  They also provide no analysis of the relative effectiveness of past spending on different programmes and activities to help inform views on where future resources should be prioritised.  All of this makes responding to such consultations extremely difficult if not meaningless and perpetuates the roll forward of previous spending patterns by departments but with ever reducing resources, so that they become ever less effective or undeliverable.  Meanwhile investment in tackling long-term systemic challenges such as health transformation (which will cost more in the longer-term unless addressed) is in danger of being continually postponed or under-resourced.  

Whilst the lack of detail and analysis in the above consultation documents is concerning, equally concerning are the details which are given about areas of the proposed budget that remain unconfirmed or are acknowledged to be inadequate.  For example, £10 million for mental health; £20 million for severe deprivation; £42.3 million for broadband to help address digital poverty (an issue strongly highlighted by the Covid-19 pandemic), and £25 million for low carbon transport are all still unconfirmed.  This funding is vital (and arguably insufficient) given the scale of Northern Ireland’s mental health challenges (with the highest prevalence of mental illness in the UK); our need to address digital poverty, particularly in rural areas; and the urgent need to decarbonise NI’s transport systems, in one of Europe’s car most car-dependent places.  

The draft budget consultation also confirms that the much discussed but still highly uncertain ‘UK Shared Prosperity Fund’ promised by UK government to replace EU funding post-Brexit, will not be devolved to Northern Ireland but administered through an as yet unknown process by UK central government.  This threatens vitally important funding available to voluntary, community and social enterprise organisations to address a wide range of societal needs in Northern Ireland previously targeted by locally designed and administered EU programmes.  NICVA research indicates that EU Structural Funds programmes for Northern Ireland in the most recent 2014-2020 funding round have provided an average of at least £17.7 million per year to NI voluntary, community and social enterprise organisations for peace-building (PEACE IV), cross-border co-operation (Interreg VA), rural communities and agri-environment schemes operated by land-managing environmental NGOs (Rural Development Programme), and combatting poverty and enhancing social and labour market inclusion (European Social Fund - ESF). 

The current ESF programme alone has supported 77,000 people into employment and funded a wide range of voluntary and community organisations to help vulnerable groups integrate into society and the labour market.  Action Mental Health, for example, is on track to support 2,450 people in this way through the current programme. This work can only continue, however, if budget provision is made, not only by the current ESF lead Department (Economy), but also those Departments like Health and Communities that currently provide match funding.   

Other Departments previously responsible for EU programmes also need to make budgetary (and policy) provision for domestic programmes to target these needs post Brexit, including DAERA to continue to support rural communities and agri-environment schemes no longer funded under the NI EU Rural Development Programme.  

Also concerning is the loss of other EU funding for Northern Ireland VCSE organisations from non-Structural Funds EU programmes which the UK is leaving such as the Erasmus programme which provided €28 million to NI in 2017 including €3.2 million to youth work organisations, and the European Solidarity Corps programme which provided €800,000 to NI organisations in 20206 for volunteering.   

In addition to these worrying indications in the above budget consultations, details have also separately emerged on the shortfall in funding in the Department for Communities budget.  The Department has recently unsuccessfully bid for over £300 million of additional funding from the government’s available public funds to meet wide-ranging needs not covered by the currently proposed draft budget.  This threatens their ability to deliver a wide range of needs from the recruitment of additional staff to administer increasing working age benefit caseloads which have soared due to the Covid-19 crisis, to other funding needed to respond to the crisis including support to address homelessness, social supermarkets, sports recovery, and arts recovery, as well as funding for independent advice, vulnerable households, grants to Councils and housing programme improvements.  (For further details follow this link) 

Meanwhile the Department of Health’s budget proposals contain other concerning shortfalls. The short term one-year budget does not allow for sufficient planning for the Department of Health. The Department has been facing mounting pressures with waiting times and outpatient appointments prior to the pandemic, and now the current climate has witnessed these becoming magnified. Health and wellbeing services are the main subsector within the voluntary and community sector with 56.1% of organisations stating that they provide services within this area, and 25% of organisations stating they provide mental health services. Funding shortages within the proposed Health budget threaten to increase pressure on organisations in the voluntary and community sector at a time when funding resources have already been significantly reduced. The Draft Budget allocation does not provide funding for the Department to deliver on the further priorities set out in “New Decade, New Approach” including £10.6 million that would go towards the Mental Health Action Plan, £3.2 million for a successor strategy for alcohol and drugs and £9 million to fully implement service improvements for Palliative and End of Life Care. These three areas currently have many voluntary and community sector organisations providing related services and without funding, the Department of Health’s own services could be reduced, in turn putting more pressure on charities delivering services. 

The areas outlined with the DoH EQIA as possible casualties of the lack of Health funding available include the impact on unaccompanied asylum-seeking children (UASC) arriving in NI; negative impact on Multidisciplinary Teams resulting in inequality of access impacting on older people to a greater extent; potential reductions in Palliative services; reduction in funding for, and possible reduction in, Community services / care packages; increased pressures on the children’s social care system and the risk of poorer outcomes in safeguarding and wellbeing terms for children in need; a possible reduction in funding to the IRIS domestic violence scheme; failure to resettle long stay mental health and learning disability patients; impact on respite care and day care services; and schemes that provide support to families through the voluntary sector programmes. Each of these areas have been highlighted as possible areas where funding will either be reduced or not available and therefore have a knock-on effect on the end users. It is possible that those who would normally avail of the services via the public sector will now be referred to/accommodated by the voluntary and community sector which is already under significant mounting pressure due to reduction in funding as well as the impact on fundraising as a result of the pandemic.  

Similar shortfalls are doubtless mirrored across other Departments but information on these varies widely between Departments.  These budgeting decisions across government affect not only the delivery of essential public services by statutory providers but also many essential public services provided by voluntary, community and social enterprise organisations supported by these Departments. An independent Kantar Millward Brown survey of the Northern Ireland public commissioned by NICVA in 2017 found that 9 in 10 people had used a service provided by an NI community or voluntary organisation in the last year and 1 in 8 that these services were ‘essential to their lives.’  In 2018, Richard Ramsey, chief economist at Ulster Bank, commented that the VCSE sector had a central role to play in delivering key services, highlighting that a shrinking third sector could become a major concern for Northern Ireland as pressures grow on the health service and other parts of local government. He added that the sector was coming under increasing pressure, due to a scaling back on public spending and mounting pressure on the health service. Since then the Covid-19 crisis has added major additional pressure on the services delivered by VCSE organisations with recent NICVA research from November 2020 showing that one in four organisations were delivering only 25% or less of their normal services and four out of ten less than 50%.  These essential VCSE sector delivered services have never been more needed and require resourcing to be sustained and increased to meet increasing need.  The 2021-22 NI budget and all future NI public budgeting needs to take full account and provide a proper analysis of how the proposed budget allocations across all Departments will impact on the capacity of VCSE organisations to deliver essential public services.  Also, budgets should ensure that those in the VCSE sector delivering these services can enjoy equal working conditions to those delivering statutory public services and are not disadvantaged simply due to the sector they work in.    

The current budget consultations paint a concerning and also incomplete picture of what the current budget proposals will actually mean for VCSE organisations on the ground and those they serve. The gaps in funding and unmet needs highlighted  above are of concern, but of equal concern is the lack of adequate information and analysis or rationale for the proposed budget allocations, or any attempt to link the budget to the delivery of PfG outcomes.  Until this happens for this and future (hopefully longer-term) budgets, the result seems likely to be an endlessly repeating Departmental fight for ever-diminishing resources to meet growing demand.  Less for the same instead of more for what works. 

(See attached NICVA's responses to the consultations on the draft 2021-22 budget,  the EQIA consultation on the proposed 2021-22 budget for the Department of Health.  and the EQIA consultation for the Department for Communities' Draft budget).