Chancellor announces £1.5bn for Stormont next year

Rachel Reeves set out the first Labour Budget for 14 years on Wednesday

A £1.5bn package of extra funding for Stormont has been announced by Chancellor Rachel Reeves.

The funding for next year consists of £1.2bn for day-to-day spending and £270m for infrastructure investment.

Reeves also said the government would proceed with Northern Ireland's city and growth deals.

Funding for the Causeway Coast and Mid South West deals was "paused" last month during a pre-Budget spending review.

The chancellor confirmed the investment plans would go ahead as she delivered her Budget - the first Autumn Statement from a Labour government in 14 years.

Northern Ireland Secretary Hilary Benn said the £1.5bn package was "the biggest real terms increase in a settlement for Northern Ireland since devolution started".

"This Budget is fixing the terrible fiscal inheritance we were left by the Conservatives, but it also laying the foundations for a better future and it’s a good day for the people of Northern Ireland," he told BBC News NI.

The government is also providing £45.8m in additional police and security spending and £730,000 to support schools as they work towards integrated status.

'Not enough' to cover Stormont pressures

Caoimhe Archibald said Stormont was still facing a shortfall of about £160m

Northern Ireland's Finance Minister Caoimhe Archibald welcomed the extra funding but added it was not enough to avoid "difficult decisions" by Stormont departments.

"My initial assessment of this Budget is that there does appear to be genuine attempts to protect public services and invest in infrastructure," Archibald said.

But the Sinn Féin minister said the package could not "undo the damage" caused by 14 years of underfunding under Conservative-led governments.

"Austerity was never going to be reversed in one Budget," she said.

In addition to the £1.5bn allocated for next year, the finance minister confirmed the Stormont executive would receive an additional £640m for the rest of the 2024-25 financial year.

But Archibald said Stormont was still facing a shortfall of about £160m.

What are city deals?

City deals - also known as growth deals in more rural areas - are regeneration funding packages worth more than £1.5bn, with about £600m coming from central government.

There are four deals in Northern Ireland: Belfast City region, Derry City and Strabane, Mid South West region, and Causeway Coast and Glens.

Archibald said it was "very welcome news" that the funding pause had been lifted for the Causeway and Mid South West deals.

"These deals are a key driver to boost economic development and deliver regional balance and I am glad sense has prevailed," she said.

The pause provoked outrage among Northern Ireland leaders in September with First Minister Michelle O'Neill describing it as "deplorable".

Asked why that pause was necessary, Benn said when Labour came to power in July it found "loads of promises have been made but there isn’t the money to pay for them".

"So, the sensible thing to do is to say: ‘Whoa, hang on a minute. Let’s just not enter into any further commitments until we’ve worked out how we’re going to deal with this," Benn said.

He said he was delighted both growth deals had been confirmed and he looked forward to signing the heads of terms for the Mid South West deal as quickly as possible.

Bushmills is one of the areas that could benefit from a city deal

Need to start 'as soon as possible'

In a joint statement, teams working on the Mid South West Region and Causeway Coast and Glens deals welcomed news they would go ahead.

"This is a very positive outcome which means that we can move forward on the development of our key innovation, green energy and decarbonisation projects designed to boost the economy in these regions," they said.

The two teams said the deals had the "potential to create millions of pounds in return investment as well as thousands of jobs in these areas."

Upper Bann MP Carla Lockhart said the deal would direct £126m to the Mid South West region, covering Upper Bann, Mid Ulster, and Fermanagh and South Tyrone.

"Further investment has been committed by the executive, and this significant funding will help unlock the region's economic potential by creating jobs, advancing key infrastructure projects, and driving economic growth," the Democratic Unionist Party politician added.

Prof Liam Maguire, pro vice-chancellor for Research at Ulster University, sits on the boards of three out of the four deals.

Speaking to BBC Radio Ulster's Good Morning Ulster programme, he said the deals would "improve economic growth and productivity".

"These are really strong investment projects in local regions, and projects that have been decided by the local regions based on the strengths within those regions," he said.

"It really does align in terms of what the government currently want to do so we would be really hopeful that they can be resumed and work can restart and we can progress these projects as soon as we can."

What is included in the plans?

Projects in the Causeway Coast and Glens deal include:

• Centre for food and drug discovery at Ulster University Coleraine

• Innovation hub at North West Regional College, Limavady

• Dungiven and Bushmills regeneration

• Cushendall innovation centre

• Coleraine leisure and well-being centre

• Portrush to Bushmills greenway

Mid South West have not published an itemised list, but said their projects would focus on skills, innovation, infrastructure and the tourist economy.

Budget boost for police

Elsewhere in the Budget, the Police Service of Northern Ireland (PSNI) will see a £7m rise in the amount of security funding it receives directly from the UK government annually.

The money helps tackle a national security threat posed by dissident republicans.

The Budget will see this cash injection increase from £31m a year to £38m.

The chancellor also announced that the government will continue paying £8m towards the Stormont Executive's tackling paramilitarism programme.

The PSNI gets the vast majority of its budget from the Department of Justice at Stormont.