Autumn Statement 2023: Northern Ireland unlikely to benefit

Autumn Statement 2023: Northern Ireland unlikely to benefit

BBC News NI economics and business editor

PA Media

Stormont has repaid about £17m of its £300m overspend

Any new public spending for this financial year that is announced in Wednesday's Autumn Statement is unlikely to benefit Northern Ireland.

Normally Northern Ireland would receive a population-based share of new public spending in England.

However any new money generated this year is supposed to be used to repay the Stormont overspend of almost £300m.

So, for an example, any additional cash to help the NHS deal with winter demand would not apply in Northern Ireland.

The Independent Fiscal Council said the overspend in the 2022-23 financial year came about due to the unavoidable impact of inflation and pay pressures being "compounded by weak budget management in the absence of a functioning executive".

Northern Ireland has been without a power-sharing government since February 2022 due to the Democratic Unionist Party's (DUP) boycott over post-Brexit trade barriers between the region and Great Britain.

On Monday the government said Northern Ireland had not been allocated any money from its £1bn levelling up scheme due to the lack of a government.

Northern Ireland Secretary Chris Heaton Harris later said that any new money generated by UK spending decisions in 2023-24 should be used to pay down the overspend.

He added that if this did not cover the full amount he would work with the Treasury to take money from previously announced Northern Ireland funding packages, with any outstanding money to be repaid in 2024-25.

It is understood that so far about £17m of the overspend has been paid back.

Mr Heaton Harris's department, the Northern Ireland Office, did not want to comment further ahead of the chancellor's statement later.

Earlier in November the senior official in Stormont's Department of Finance warned that another overspend is looming this year .

Neil Gibson said it was running at an estimated £450m, based on the assumption that there are no pay rises across public services.

Pay deals matching those in the rest of the UK would see the deficit balloon to about £1bn.

Any changes to benefits announced in the Autumn Statement will not automatically apply in Northern Ireland as social security is largely devolved.

In practice, Stormont normally passes legislation to stay in line with policy in Great Britain for practical and budgetary reasons.

Stormont's Department for Communities said: "The department will work with the Department for Work and Pensions (DWP) to assess all the changes announced and any consequent budget impact for those applicable in Northern Ireland.

"Northern Ireland generally maintains parity with Great Britain on social security changes. Any break with parity may result in additional public expenditure for Northern Ireland and this would normally require executive agreement."

Major tax changes, such as cuts to income tax or National Insurance, will automatically apply in Northern Ireland.