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As Brexit looms, Northern Ireland budget gets £140m extra from UK government

Northern Ireland’s Stormont Assembly. Photo: Reuters
Northern Ireland’s Stormont Assembly. Photo: Reuters

Health spending in Northern Ireland will increase by almost 4% in the 2019–20 financial year, Northern Ireland’s finance ministry said on Thursday.

The budget, which was published by Northern Ireland secretary Karen Bradley, includes an additional and unexpected £140m in funding from the UK government — something that may lead to questions in Westminster.

This is in addition to the £333m of new funding that comes from the confidence and supply agreement brokered with the Democratic Unionist Party (DUP), whose 10 MPs prop up Theresa May’s government in the House of Commons.

Some £100m of this original funding is to be ringfenced for “health transformation,” while £200m will be used for capital spending on key infrastructure projects.

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The additional £140m in new funding will be used to reconfigure fundamental services, the finance ministry said.

Nigel Dodds, the deputy leader of the DUP, said that his party made a “compelling case” to the chancellor Philip Hammond for the extra funding.

The 3.8% increase in health spending will see further investment in Northern Ireland’s flagship Maternity and Children’s Hospital, as well as a new fire and rescue training facility in County Tyrone.

The region’s ageing population means that its health service is coming under increasing pressure, and inflation means that the increase in funding in real-terms amounts to little more than 2%.

In a statement, the department of health in Northern Ireland said that the additional funding would help “manage the growing pressures across the system,” but that it would not “fully meet the forecast costs of maintaining existing services across the year.”

The education budget will see a 1.1% increase, while £20.4m has been allocated to departments for costs associated with preparations for Brexit.

Some £16.5m has been allocated to the Northern Ireland police service for Brexit preparations “in recognition of specific and unique circumstances in Northern Ireland.”

Some £130m from funds previously set aside for capital spending has been reallocated to day-to-day spending. This move — which would normally contravene Treasury rules — follows a similar reallocation last year.

The UK government has given Northern Ireland leeway with respect to budget rules since the collapse of power-sharing two years ago.

Northern Ireland holds the world record for the longest period without a sitting government (the previous record, held by Belgium, was a little over a year and a half, or 589 days).

That means that annual budgets, rather than being prepared and approved by ministers, are instead shaped by civil servants.

This year’s budget was overseen by the senior civil servant in Northern Ireland’s finance ministry, Sue Gray.

Most of Northern Ireland’s funding comes from money, known as the subvention, that Northern Ireland receives from Westminster every year.

Though Northern Ireland was once a net contributor to HM Treasury, it’s now thought of as a “big deficit” economy — it has one of the highest levels of public spending in the entire UK, and collects a comparatively low level of taxation revenue.

The budget was published on the same day that the head of Invest NI, the region’s inward investment agency, said he would step down later this year.

Last year, chief executive Alastair Hamilton publicly criticised the finance ministry for proposed budget cuts to the agency, which is seen as having a fundamental role in preparing Northern Ireland’s economy for the post-Brexit landscape.

He said that cuts would have “long-term damaging effects on our economy at a time when our businesses most need support.”

In the end, the agency’s budget was cut by just £3m last year — much lower than had previously been feared.

But the panic spoke to the problems created by the lack of government in Northern Ireland.

Power-sharing collapsed in January 2017 following a disagreement between the DUP and Sinn Féin.

Both parties also fundamentally disagree about Brexit, with the DUP staunchly in favour of the UK’s departure from the EU, and Sinn Féin opposed.

Efforts to restore power-sharing have come to nothing, meaning that Northern Ireland is without a government in the midst of Brexit negotiations that not only directly impact it, but have been stalled in large part due to the Northern Ireland backstop.