NI's 100 days under the coalition

By Andy Martin
BBC Ireland reporter

  • Published
David Cameron
Image caption,
David Cameron made the comments about NI's public sector before the General Election

One hundred days have passed since the coalition government was formed, but even before the general election, Northern Ireland knew what was coming. David Cameron had made it clear four months previously.

In an interview with Jeremy Paxman he said: "In some parts of the country the state accounts for a bigger share of the economy than it did in the communist countries in the old eastern bloc, this is clearly unsustainable."

When pressed by the BBC presenter as to which parts of the country he was referring, the answer came quickly: "Northern Ireland".

The figures are stark. One third of all workers in Northern Ireland are paid from the public purse, compared to a quarter in the rest of the UK.

There is also a higher dependency on benefit payments. Both are in the prime minister's firing line.

This autumn brings the National Spending Review, which will determine government budgets for the next four years.

So, on top of the £347m already earmarked by the Executive for savings, there are to be further severe cuts. Stormont ministers have already made their case, by October the Executive will have decided its priorities.

The same month, the chancellor will decide how much the block grant will be reduced. Then comes the Executive's draft budget, followed by a period of public consultation, and in December the revised budget will tell us how life will be until 2015.

A recent briefing by an official at the Department of Finance (DFP) revealed that the NI Executive will most likely have to find savings of hundreds of millions of pounds.

The Northern Ireland Council for Voluntary Service (NICVA) recently commissioned a study by Oxford Economics. It predicted a budget cut across NI of as much as £1.2bn over the next five years.

But that is only part of the story, Stormont will also have to find a way to raise revenue, and that could be just as painful.

Among the options available are an increase in rates. The Executive could plump for the sale of some of its buildings, perhaps easier done than said if the public service metropolis in the Stormont estate is left empty following a predicted cull of the civil service.


And there is of course the possible introduction of water charges, which could raise tens of millions a year. Politically unpopular it may be, economically essential it may prove.

As far as savings are concerned, the reduction of bureaucracy is popular with Peter Robinson and other politicians.

This is why NIPSA and other trades unions have been on the offensive already. However, an economy reliant on the salaries of civil servants will initially suffer as income that would normally flow into the shops and services of the private sector reduces.

Undoubtedly, some public services will be protected, as far as possible. Health is by far the biggest current budget, accounting for almost half of Northern Ireland's expenditure.

Education is also likely to be partially protected. But not cutting does not mean these departments will not be affected. The ability to update and improve facilities will still hindered.

Ministers in other departments could be looking at cuts of between 15% and 20%.

So what does this mean in real terms? Seamus McAleavey of NICVA summed it up.

"We're looking at a 40% cut in capital expenditure. So schools, hospitals, roads, water and sewerage could all take a big hit," he said.

So could salaries, NICVA predicts that as jobs are lost, wages will fall, and that the voluntary sector could fare worse than others.