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16 December 2010

Finance Minister Sammy Wilson introduced a draft budget to the Assembly. Consultation on its content will be held over the next eight weeks and end on 9th February. From NICVA website http://www.nicva.org/news/draft-budget-2011-2015-released-consultation

The budget agreed by the Executive and released for consultation outlines the high level figures that will be available for each department.  There is no information on how this money will be allocated with-in departments. This crucial detail is to be provided and consulted on by individual departments themselves rather than DFP consulting on the document as whole - which has been the case in the past. NICVA has already been in contact with departments and will be agreeing dates for consultation meetings with the voluntary and community sector in early January.

Aside from the disappointing lack of detail on how the budget will be implemented by the Executive there are a number of points of interest. Some of these points do not appear in the draft budget document but were highlighted in the Finance Minister's speech. A full copy of the budget and the Ministers speech is available below.

• The 'health' elements of the DHSS&PS budget are to be protected. This amounts to 77% of the departments entire budget. The social services elements of the budget will not be afforded the same protection.
• A £20million Social Protection Fund is to be established. The fund will be located in OFMdFM and the £20million has been allocated for the 2011/2012 year only. Continued funding for this depends on income generated from the new revenue generating measures proposed by the Executive.   The Fund is aimed at assisting "those most in need in our wider communuity"  There is no further detail but it is believed that this is a version of the Hardship Fund proposed by the DSD Minister to offset some of the impacts of Welfare Reform proposals.
• A Social Investment Fund will be established in OFMdFM and has been allocated £20million per year over the four years. The Fund is described as part of the Executives committment to tackle disadvantage and the budget notes that  "this disadvantage is most acute in those interface communities where the problmes are many and complex"
• The freeze on the domestic and non-domestic regional rate has been lifted and the rates paid by households will now rise in line with inflation. It is estimated that this will raise an additional £146million over the budget period. Water charges will not be introduced.
• The Green New Deal will be supported with £4million per year.
• A charge on plastic bags will be introduced and it is estimated that it will raise up to £4million per year. As this is the same amount planed to be invested in the Green New Deal it is reasonable to assume that the money generated by the Plastic Bag levy will be used to support Green New Deal.
• The Executive will borrow £175million from the Treasury for an assistance package for the Presbyterian Mutual Society savers and make a further contribution of £25million to match the £25million already secured from the Treasury.
• Civil servants earning over £21,000 will have their cost of living pay increase frozen. Annual wage increments will continue to be paid.
• Changes to legislation regarding Belfast Port will be made to allow the Executive to receive an on-going share of the Ports profits.
• There is a proposal that the reserves belonging to Housing Associations should be used to top up the cost of building new houses.  There are no further details available on this but it is believed that this could generate up to £20million per year - around 10% of the Housing Associations current reserves. There is no further detail on this at present either. However it could be problematic to assume that Housing Associations reserves are available in cash to simply handover and use to pay for new builds.  As with most organisations a large portion of reserves may be tied up in bonds, investments and property. There may also be issues around how reserves belonging to independent organisations can be acquired by government.
• All QUANGO's and Arms Length Bodies, including the NIHE, are to be reviewed and Ministers will prepare recommendations on their future by May 2011.
• There will be an £18million  package of initatives to address unemployment. Most of the initatives will be implemented via DETI and DEL and will include support for social enterprises and business start up grants for Neighbourhood Renewal Areas.