NI leaders accuse government of breaking promises

Peter Robinson accused the government of breaching some funding promises

The first and deputy first ministers have accused the British government of breaking its promises over budget cuts in Northern Ireland.

Peter Robinson and Martin McGuinness were reacting to £4bn cuts in the budget announced on Wednesday by Chancellor George Osborne.

But NI Secretary Owen Paterson said NI was getting "a quite remarkable deal".

Asked about NI politicans' reactions, he said: "I don't know what planet they're living on."

"What this means on revenue is a 6.9% reduction over four years that means the Executive has to save 1.7p in every pound it spends.

"Across the UK, apart from protected budgets such as health, the reduction has been 19%"

"So 6.9% over four years is a remarkable result."

Finance Minister Sammy Wilson said the cuts in the capital and current spending meant Northern Ireland was facing a drop of £4bn in real terms over four years.

The Executive will discuss the full implications of the cuts on Friday.

Speaking in Washington where the leaders are working to attract US investors to Northern Ireland, Mr Robinson said news of the cuts was "very disappointing".

"They are much worse than we were being led to believe," he said. "The capital drop effectively stagnates our economy".

Mr Robinson accused the government of breaking promises twice and said there were smoke and mirrors surrounding the issue.

How do the different figures add up?

  • The Department of Finance is coming to a figure of £4bn of an overall cut by taking the annual reductions in the NI grant in each of the next four years and adding them together
  • The Treasury says the cut is less than half of that - it arrives at its figure by comparing the NI grant for this financial year to what it will be in 2014/15

"We're pedalling as fast as we can in trying to move forward economically and there are others applying brakes to us. It makes life very difficult for us.

"However, there are some things that we have to recognise that we can change and others that we can't. We have to deal with the circumstances."

"The Treasury is not giving us £18bn. It is a breach of undertaking," he said.

"The prime minister endorsed the Policing and Justice package - there are very real concerns of a breach of an undertaking given in that area."

But Mr Paterson said the commitment to £18bn of special funding for capital projects in Northern Ireland would be honoured.

"We will certainly deliver on the £18bn which has been discussed in the last few weeks," he said.

He said the NI Executive's view of the capital reduction was "too narrow" and ignored other sources of capital funding available.

Martin McGuinness Martin McGuinness said it was "very unpleasant news"

Mr McGuinness said Mr Paterson had delivered "very unpleasant news"

"We've made it clear to the British government consistently that we expect the commitments that we made, the financial package agreed with the previous administration to be honoured and from what I'm hearing today, it does not look as if they intend to honour it.

"So we're going to be involved in a bit of a battle with the British government on this issue over the coming period."

Earlier, Finance Minister Mr Wilson warned the cutbacks of £4bn in real terms over four years would be a "real test" for the NI Executive.

Capital funds for roads, hospitals and public projects in NI will have to be cut by about 40% by 2014/15.

Mr Wilson said this was "worrying" and "very difficult decisions" would have to be taken.

In terms of current spending, the money to pay wages and other regular costs will fall by 8% over four years.

What do cuts mean?

  • Child benefit cuts for high income taxpayers
  • Tax credit and incapacity benefit cutbacks
  • Pension age rises to 66 for men and women by 2020
  • Independent estimate of 20,000 public sector jobs to go in NI over four years
  • Defined benefits scheme retained for public sector
  • Benefit levels for householders capped
  • Public Sector compulsory redundancies 'inevitable'

"Whilst the level of budget reductions we are facing is unwelcome, and will present a serious challenge, it comes as no great surprise," Mr Wilson said.

The cuts in current expenditure would be "difficult to manage", he said, given inflation and pay pressures.

But the fall in capital funds was "much more worrying".

"The Northern Ireland capital DEL (Department Expenditure Limit) budget will fall by 40.1% in real terms by 2014-15. In addition, the biggest reduction will be in 2011-12 where our capital DEL will reduce by £ 342.7m in real terms.

"We are going to have to take some very difficult decisions in terms of what projects to fund going forward - the reality is that we have much less money available than was envisaged under the Investment Strategy that was published as part of the previous budget."

Mr Wilson said the Executive had a duty and a responsibility to take difficult decisions.

"If we delay or fail to agree a Budget, the losers will be the communities we represent. Our schools, colleges, hospitals, health centres, indeed all publicly funded services need certainty in their budgets as soon as possible.

"By working together, we can mitigate against the worst effects of the spending cuts."

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