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Politicians fear NI budget cuts Stormont 'to find £122m of cuts'
(about 1 hour later)
Politicians at Stormont fear millions of pounds could be cut from the government block grant as a result of the budget. The executive will have to find efficiency savings of £122m by 2011.
First Minister Peter Robinson has warned of a negative impact if Gordon Brown reneges on a pledge to give NI a three-year financial settlement. The move is part of the Budget unveiled by the Chancellor Alastair Darling who wants savings across all government departments.
Some predict that between £140m and £600m could be taken from Stormont. There were fears that the savings demanded from Stormont by the Treasury would be much higher -as much as £600m.
The Chancellor said there will be £15bn of "efficiency" cuts across government from 2010. 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.
Alliance finance spokesperson, Stephen Farry said Northern Ireland could get a short term boost but would still be facing longer term cuts. The Finance Minister, Nigel Dodds, says he is disappointed by the cuts required but he is heartened with news of the extra interim resources.
Boost
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.
Alliance finance spokesperson, Stephen Farry said it was a short-term boost but that Northern Ireland would still be facing longer term cuts.
"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."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.
"Northern Ireland will therefore get a short-term financial boost in the range of £30m to £50m."Northern Ireland will therefore get a short-term financial boost in the range of £30m to £50m.
"In the longer-term, Northern Ireland risks taking its share of the announced £15bn efficiency savings. 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." "In the longer-term, Northern Ireland risks taking its share of the announced £15bn efficiency savings.
The DUP's Simon Hamilton, the Stormont finance committee vice-chair, said cuts would be a breach of the deal which restored devolution. "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."
Unacceptable
"A guaranteed comprehensive spending review settlement and the acceptance of the principle that any efficiency savings made in Northern Ireland would be retained in Northern Ireland were parts of the financial package that saw devolution restored," he said.
"Welshing on those commitments would be completely unacceptable."
Sinn Fein's finance spokesman Mitchel McLaughlin said the tough economic climate strengthens the argument for greater fiscal control in the hands of locally elected politicians.
"Decisions taken by the British Treasury are taken in the interests of the British government, the British banking system and economic conditions pertaining principally on the island of Britain," he said.
"Any affects that these decisions have on conditions in the North of Ireland are peripheral to the thinking of the British Treasury.
Northern Ireland receives a block grant of about £18bn every year, £10bn of which is controlled by the Executive.
If the Executive has to make savings at the lowest predicted figure of £140m that would be equivalent to the entire annual budget of the Department of the Environment.
Meanwhile, the Northern Ireland drinks industry has warned the rise in alcohol duty in the budget would put jobs at risk.Meanwhile, the Northern Ireland drinks industry has warned the rise in alcohol duty in the budget would put jobs at risk.
The drinks industry is also worried about the chancellor's announcementThe drinks industry is also worried about the chancellor's announcement
The Federation of Retail Licensed Trade (FRLT) said the 2% rise could "cripple the industry", which employs about 34,000 people.The Federation of Retail Licensed Trade (FRLT) said the 2% rise could "cripple the industry", which employs about 34,000 people.
In December, the Federation of Retail Licensed Trade said sales in beer had fallen 8% as more people buy alcohol in supermarkets.In December, the Federation of Retail Licensed Trade said sales in beer had fallen 8% as more people buy alcohol in supermarkets.
"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."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.
"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.""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."