NI Finance Minister's warning over lack of budget

Finance Minister Conor Murphy warns that a funding crisis is looming in Northern Ireland

Stormont Finance Minister Conor Murphy has issued a fresh warning to the Chancellor about a looming funding crisis if an Executive is not formed to agree a budget.

In a letter to Nadhim Zahawi, he said "proceeding without a budget is becoming increasingly untenable".

He also warned there was a "real risk" that Stormont departments would significantly overspend this year.

Ministers had agreed to put a draft three-year budget out for consultation.

However, that process was paused when the DUP's first minister, Paul Givan, resigned leaving the Assembly without a fully functioning Executive.

Mr Givan quit in protest at the Northern Ireland protocol and his party has insisted it will only re-nominate to the post of first minister when the party's demands on the protocol are met.

The protocol is part of the 2019 Brexit deal and keeps Northern Ireland in the EU's single market for goods, preventing a hard border with the Republic of Ireland.

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In Monday's letter to the chancellor, Mr Murphy said the draft budget had no legal standing and an additional £435m could not be spent without Executive approval.

Mr Murphy told the chancellor that the Northern Ireland draft budget had no legal standing

He added that, while civil servants have the right to authorise spending, departments could not plan in the absence of an agreed budget.

He said ministers have been given "contingency planning envelopes" setting out the minimum level of funding they can expect if an executive is restored.

The finance minister warned that the current inflation rate has reduced Stormont's spending power by about £375m and said that there was a "real risk" that this will place the Executive on a "trajectory towards an overspend in terms of its resources".

"The longer this situation persists the more difficult and harmful it will be to reverse this course," he warned.

He also called on the government to ensure that the DUP re-established the Executive so a budget can be agreed to tackle the financial challenges ahead.