Process for setting Northern Ireland budget requires 'significant reform'

Significant reform is needed for the process of setting a budget for Northern Ireland, a committee has recommended.

The process of allocating billions in funding has to be more "transparent and effective," the chair said.

Some department would found to not provide enough information, which was found to impede scrutiny of how the money was to be used.

The Public Accounts Committee recognised challenges to the system such as having to rely on one-year budgets hampering the ability for long-term fiscal planning.

However in a new report, Review Of The Northern Ireland Budget Process, the committee urged better communication between departments and the Exchequer.

The report makes 10 key recommendations which include providing clear guidance to departments making bids and efforts for a more joined-up approach, aligning the budget to the Programme for Government and the production of a process reform programme, along with a timetable.

Northern Ireland receives £5.8billion a year from London as well as £1.7bn to tackle the impact of the coronavirus pandemic.

Funds are allocated to departments by Stormont Finance Minister Conor Murphy's department.

Public Accounts Committee chairman William Humphrey said there are "significant areas in which our local budgetary process needs to be made more effective and transparent".

"One issue of great concern is that a number of departments do not provide their Assembly committees with sufficient information on funding requests prior to the agreement of a final budget.

"This seriously impedes the scrutiny function of committees and we believe this is an area that requires significant reform," he said.

"At the same time, we are pleased that the establishment of the Northern Ireland Fiscal Council should help to drive improvements in this important process."

The committee's report also stressed that it is important that the budget process should be linked both to the Programme for Government and the Investment Strategy for Northern Ireland.

This year's budget was due to be a three-year-Budget, the first in recent history, however this is no longer the case following the resignation of First Minister Paul Givan, a move which also took deputy First Minister Michelle O'Neill out of the joint office.

However, the committee's report noted that without such a joined-up approach, the advantages of any future multi-year budget will not be fully realised.

It also described the structure of Stormont departments as individual legal entities as presenting challenges in agreeing budgetary priorities and allocating resources.

The report described this situation as further complicated by some monies from Westminster being provided directly to local recipients and emphasised the necessity of greater collaboration and communication between Westminster and the Executive.

The report additionally highlighted the need for resources to achieve improvements in the budgetary process, above and beyond those required to prepare the budget.

Mr Humphrey added: "This report includes a number of very important recommendations that will help the department and the Executive to improve the budgetary process to the benefit of all people in Northern Ireland.

"We believe that the department requires both sufficient and skilled resources to make the necessary and desirable changes that will substantially improve the budget process and the efficient allocation of funds."

A Department of Finance source said: "The department notes the PAC report and welcomes the positive recognition within the report that the Fiscal Council and Fiscal Commission established by the Finance Minister will bring improved transparency and a greater focus on budget sustainability.

"The department is fully committed to working with all government departments to make the budget process as effective and transparent as possible."