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Stormont 'to find £122m of cuts' Stormont 'to find £122m of cuts'
(about 2 hours later)
The executive will have to find efficiency savings of £122m by 2011. The NI Executive will have to find efficiency savings of £122m by 2011.
The move is part of the Budget unveiled by the Chancellor Alastair Darling who wants savings across all government departments. The move is part of the Budget unveiled by Chancellor Alastair Darling, who wants savings across all government departments.
There were fears that the savings demanded from Stormont by the Treasury would be much higher -as much as £600m. There were fears the savings demanded from Stormont by the Treasury would be much higher - as much as £600m.
The government has promised extra short term funding of £116m as the executive makes the longer term cuts. There will also be extra money for policing. Extra short-term funding of £116m was promised as the executive makes the longer term cuts. There will also be an extra £28.7m for policing.
The Finance Minister, Nigel Dodds, says he is disappointed by the cuts required but he is heartened with news of the extra interim resources. Following social security changes, Northern Ireland will also receive an extra £27m for measures such as winter fuel payments.
Boost Northern Ireland may have escaped the doomsday forecasts of immediate and massive public expenditure cuts - but the dark shadow of the Chancellor's axe still hangs over Stormont Philip McDonaghPricewaterhouseCoopers NI class="" href="/1/hi/northern_ireland/8013004.stm">NI reaction to Darling's Budget
The £116m will be made available over the next two years. The government is also to provide an extra £28m for policing and an extra £27m following social security changes. Secretary of State Shaun Woodward said the Budget would bring "real and tangible benefits", with its provisions along with other measures leaving Northern Ireland "nearly £50m better off".
Alliance finance spokesman Stephen Farry said it was a short-term boost but that Northern Ireland would still be facing longer term cuts. Finance Minister Nigel Dodds of the DUP said he was disappointed by the cuts required, but was heartened by news of the extra interim resources.
It is beyond comprehension that the Chancellor should again raise the duty on alcohol, the third increase in the last year Colin NeilFederation of Retail Licensed Trade class="" href="/1/hi/northern_ireland/8013004.stm">NI reaction to Darling's Budget "As we move into 2009-10, the executive will need to have an even greater focus on ensuring that every pound spent on public services delivers maximum value for money so that we can continue to provide a better quality of life for all the people of Northern Ireland," he said.
"We will be entitled to a proportionate share from new financial commitments to training and employment measures and financial support for renewable technologies," he said. 'Priorities'
"Northern Ireland will therefore get a short-term financial boost in the range of £30m to £50m. SDLP finance spokesman Declan O'Loan said Northern Ireland needed its own Budget, and described as "untenable" the position of Mr Dodds and his party colleague, First Minister Peter Robinson.
"In the longer-term, Northern Ireland risks taking its share of the announced £15bn efficiency savings. "The SDLP has proposed £400m of new spending. It has the support of leading economists. The recession demands change," he said.
"Cuts of this scale would take £450m out of our local budgets over the next few years. It remains to be seen if our ministers can negotiate an exemption for Northern Ireland from this." Ulster Unionist Party deputy leader Danny Kennedy said: "At this point the finance minister will have to get his head out of the sand and the executive will have to urgently undertake a major revision of the priorities in the Programme for Government with job protection and job creation in mind."
PricewaterhouseCooper NI chief economist Philip McDonagh said: "Northern Ireland may have escaped the doomsday forecasts of immediate and massive public expenditure cuts - but the dark shadow of the Chancellor's axe still hangs over Stormont."
Meanwhile, the Northern Ireland drinks industry has warned the rise in alcohol duty in the budget would put jobs at risk.
BUDGET 2009 Complete Budget report [2.59MB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader hereBUDGET 2009 Complete Budget report [2.59MB] Most computers will open this document automatically, but you may need Adobe Reader Download the reader here
The Federation of Retail Licensed Trade (FRLT) said the 2% rise could "cripple the industry", which employs about 34,000 people. Alliance finance spokesman Stephen Farry said it was a short-term boost but that Northern Ireland would still be facing longer term cuts.
In December, the Federation of Retail Licensed Trade said sales in beer had fallen 8% as more people buy alcohol in supermarkets. "Cuts of this scale would take £450m out of our local budgets over the next few years. It remains to be seen if our ministers can negotiate an exemption for Northern Ireland from this," he said.
"It is beyond comprehension that the Chancellor should again raise the duty on alcohol, the third increase in the last year," said FRTL chief executive Colin Neil. Economist Philip McDonagh of PricewaterhouseCoopers NI said: "Northern Ireland may have escaped the doomsday forecasts of immediate and massive public expenditure cuts - but the dark shadow of the Chancellor's axe still hangs over Stormont.
"This announcement makes a mockery of the Government's claim to be doing all it can to save jobs and businesses as its action today will result in thousands of job losses with many businesses going to the wall." Bank of Ireland economist Alan Bridle said: "The executive could have a little more cash but above-inflation allocations in some departments will have to be offset by significant cuts elsewhere.
"Furthermore, it is not clear immediately the extent to which this region will be expected to share the pain of efficiency savings before 2011."
The CBI's Nigel Smyth said the impact on Northern Ireland of efficiency savings in 2010/11 remained unclear, while Joanne Stuart of the Institute of Directors NI warned that Northern Ireland would suffer disproportionately from any slowdown in public spending, given its "higher dependence on the public purse".