Stormont budget shows 2% health spending increase

With Stormont still in in crisis it was up to Karen Bradley to announce details of the budget

The health service in Northern Ireland will start the new financial year with a 2% real increase in funding compared with the end of this year.

The details are contained in Stormont's 2019-20 budget.

It has been published by Secretary of State Karen Bradley in the absence of Stormont ministers.

The budget includes an additional £140m from the Treasury, which has been allocated outside the normal block grant process.

The secretary of state said this money recognises "the lack of opportunity for more fundamental service reconfiguration" in Northern Ireland.

A further £130m has been reallocated from capital spending into day-to-day spending, which is usually against Treasury rules.

Northern Ireland has been without a devolved government at Stormont since January 2017

Overall the amount of cash available to Stormont departments is up by 3.8% compared with the start of 2018-19.

When adjusted for inflation that is a 2% increase.

The situation is complicated for some departments because they received additional money throughout the year.

So, although the health service has 6% more cash compared with the start of 2018-19, it will only have 3.8% more cash compared with the position at the end of 2018-19.

The DUP's Nigel Dodds said his party had made "a compelling case to the Chancellor" to get the extra £140m.

He also criticised Sinn Féin, saying the party had "abdicated their responsibility" to set budgets at Stormont.

But Sinn Féin insisted it was a "punishing austerity budget" imposed by the Conservative government with the support of the DUP.

Finance spokesperson Máirtín Ó Muilleoir said: "It exposes as sanctimonious, the claim by Theresa May in October of last year that 'austerity is over'."

Analysis

by John Campbell, BBC News NI Economics & Business Editor

Does this budget represent an update in the DUP's confidence-and-supply deal with the Conservatives?

Well there is certainly £140m that has been handed to Stormont outside the usual budget setting process.

The devolved administrations get a grant from the Treasury, which is worked out using the Barnett formula.

Funding changes for services in England have budget impacts on the other nations, dependent on their population size and the powers devolved to them.

Today's £140m is not part of that process - it has been awarded at the Treasury's discretion.

Expect questions from the SNP about how that figure has been arrived at.

A Department of Health spokesperson welcomed the inclusion of a further £100m to fund the transformation of health services.

"This will help advance the long-term task of radically changing the way services are provided.," they said.

However, the spokesperson added that the the financial situation would remain "challenging" throughout 2019/20 with increased demand on health services.

Education will start the year with 1.1% more cash than the end of this year. However when adjusted for inflation that is a small fall in real terms.

It is likely that health and education will both benefit from budget reallocations throughout the financial year.

Overall the budget remains tight, with some departments seeing real-term falls in their budgets.

Domestic property rates will rise by almost 5% while business rates will rise by just under 2%.

It is understood the Treasury wanted to increase rates by more than 10% but faced a push back from the DUP.

A further £333m of the DUP's confidence-and-supply money, from its deal with the Conservatives, is due to be spent this year, mainly on infrastructure.