Stormont on course for £387m overspend, O’Dowd tells MLAs

Stormont is on course for an overspend of £387 million in the current financial year, Finance Minister John O’Dowd has told MLAs.

Mr O’Dowd told the Finance Committee that the Department of Education alone has a projected overspend of £247 million as he urged ministers to make decisions so they could live within their budgets.

Earlier this week, Mr O’Dowd revealed that the Executive had agreed an additional £104 million for public-sector pay awards in the December monitoring round.

However, during an appearance before the Finance Committee, Mr O’Dowd said that pay pressures remained a significant reason for overspends in health and education.

He told the committee: “I have asked all ministers to endeavour to find further efficiencies to help fund the pressures facing departments.”

The minister added: “It is likely that we are looking at a position where we will be in an overspend despite my repeated advice to departments of the need to live within their allocated budgets, and of the consequences of any overspend.

“Given that any overspend this year will be deducted from the Executive’s funding in 2026-27, every minister must redouble efforts to identify efficiencies to help manage the overall financial position.”

Committee chairman Matthew O’Toole asked what the current level of the projected overspend was.

Mr O’Dowd said: “We are currently at a figure of £387 million.

“That is a pressure at this moment of time and we wait on the provisional out-turns from our departments, and they will change, hopefully for the better, over the next coming months.

“I have engagement around the Executive table with my Executive colleagues and elsewhere.

“My constant message to them is we need to drive down that overspend as it will result, due to Treasury rules, to us losing any overspends from next year’s budget, and next year’s budget is particularly tight.

“Executive colleagues have a lot of work to do, their accounting officers have a lot of work to do to drive efficiencies forward.”

The minister said the “main drivers” of the overspend were the health and education departments.

He said health was forecast to overspend by £139.4 million and education by £247 million.

Mr O’Dowd said a “significant chunk” of the overspends related to pay awards.

Mr O’Toole asked how realistic it was that those overspends could be managed down.

The minister said: “I can’t micromanage each of the departments, nor is that my role.

“Ministers and their accounting officers will know better than me the areas in which they can bear down on in terms of seeking efficiencies.

“It is up to those individual ministers to continue to engage directly with their spending areas.”