Spending plan does not include expected Stormont overspend – O’Dowd

Draft budget proposals do not include expected overspends by Stormont departments, Finance Minister John O’Dowd has told MLAs.

Opposition leader Matthew O’Toole said he was worried that the Executive would be entering the next financial year with a “£500 million black hole”.

Mr O’Dowd published his draft spending plan for a multi-year budget last week and has sent the proposals out for public consultation.

However, they have not been agreed by the powersharing Executive and have faced criticism from other parties, particularly the DUP.

Delivering an oral statement to the Northern Ireland Assembly, Mr O’Dowd said it was important that parties “grasped this opportunity” to agree a multi-year budget.

He said: “The proposals I have brought forward for consultation follow political engagement and have been developed against the backdrop of an exceptionally constrained financial position.

“They do not provide the level of funding I would wish to see directed at our public services. Instead, they reflect what is possible within the funding available.

“In this context it has not been possible to provide any department with the funding it has requested.”

Mr O’Dowd called for his ministerial colleagues to “strive to improve efficiency in how our public services are delivered”.

He added: “Change is essential if we are to improve our public services and deliver better outcomes for everyone.

“This will require a collective willingness across society to embrace change.

“This means harnessing technology, adopting innovative ideas and being prepared to consider options for raising additional revenue.”

Mr O’Dowd said the last budget at Westminster was an illustration of why Northern Ireland needed greater fiscal powers.

He said: “Having greater fiscal powers would allow us to make different choices, to spur economic activity, or to generate income for public services, in a fairer and more progressive way.”

The minister said in developing the draft spending plan, he had not included the impact of potential department overspends.

Mr O’Dowd told MLAs: “This is because we do not yet know what the quantum of any overspend will be.

“It is also my intention to press Treasury to allow us to repay any overspend over a longer period to minimise the detrimental impact that an immediate reduction would have on public services.”

Mr O’Dowd has previously indicated that departments are facing an overspend of close to £400 million in the current financial year.

Mr O’Toole said: “One of my biggest concerns is the current overspends that are planned, particularly in the departments of education and health in relation to pay, those are not factored into these plans.

“Minister, that worries me. It feels like it is a £500 million black hole before we even get started next year.”

Mr O’Dowd said: “There is a responsibility on all ministers, particularly those who are carrying an over-commitment, to do everything within their power to reduce that.

“It is factored in, in that it is recognised there is a potential overspend in this 2025/26 budget. It will be dealt with in a number of ways.

“I will continue to engage with the Treasury around trying to spread those costs over the maximum period of time.”