Northern Ireland finances facing spending blackhole of £2.3bn

Stormont officials are exploring ways to raise money in Northern Ireland.

Northern Ireland is facing a spending blackhole of around £2.3billion in the next financial year, the Department of Finance has said.

Stormont officials have outlined the huge gap in finances in a report to set out the context as to why the Northern Ireland Secretary of State Chris Heaton-Harris is exploring revenue raising options.

He asked civil servants to consider measures such as domestic water charges, prescription charges and tuition fees, which he says will improve the sustainability of Northern Ireland’s public finances.

The Department of Finance published a document setting out the financial context ahead of a public consultation.

It states in the 2024-25 financial year there will be a gap between income and spending of £2.3bn.

"The public sector needs to think differently about how it works and consider new ways to respond to increasing demand, deliver public services and provide better outcomes," the document states.

"Government must spend less or increase the money coming in. This means considering generating more income, stopping spending money in certain areas, delivering services in a more efficient way or reducing demands on services to free up funding."

Individual public consultations by Stormont departments on revenue-raising measures are expected to be launched later this month. The Department of Finance document said the budget for the current financial year includes £14.2 billion in resource departmental expenditure limits and £2.3 billion in capital departmental expenditure limits. It stated: “Just like household and business budgets, departmental budgets have been severely impacted by sharply rising prices because of inflation. “Sustained high inflation has fundamentally reshaped the price of what the public pound can buy.” The report said the current resource departmental expenditure limit is £2.3 billion lower than the figure that would have been required to deliver the same level of services as in 2021-22. The report said balancing public finances in Northern Ireland will require a “multi-faceted approach” which could include actions in areas including efficiency, gaining additional funding, reducing or stopping some services and additional revenue-raising.

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