Alliance speech in oppostion to Budget

The Minister talks about everyone putting their shoulder to the wheel in this new era. Well some of us have questions of the direction in which he is steering.

There at least are three basic flaws.

First, the lack of investment in a Shared Future, and efforts to find efficiency savings from addressing the costs of a divided society.

True – the Minister has made some rhetorical references to a shared future within his budget statements, but it is not a central theme in the budget.

Efforts to identity efficiency savings from tackling division are referred to PEDU, for longer-term consideration. We want to make a start.

Alliance has tabled a resolution to discus the Deloitte Report. Deloitte is a respected global consultancy. There report has been effectively shelved by the First Minister and Deputy First Minister. Alliance talked of £1billion going into the election. Deloitte has talked of £1.5bn. Much of their analysis on the direct costs of division, and the opportunity costs is sound, but they are weak on the imbedded costs of duplicate goods, facilities and services.

There is no new investment into shared facilities- improved public services for the whole community.

Obviously, changing our society for the better will take time, but we can’t afford not to be making a start right now.

The emphasis on economic development by the executive is obviously welcome, but there seems little appreciation that meaningful and sustainable economic growth is not possible without at the same time promoting a shared future.

In particular, divisions have an impact upon labour market mobility and deter inward investment.

There are now clear international lessons that the most successful societies in the world tend to be those most that are most tolerant and open to new ideas and people.

Second, this budget is more a recipe for a low tax society than for genuine investment in economic growth.

The Finance Minister has taken an already tight financial Comprehensive Spending Review settlement from London and made it even tighter.

Contrary to the impression that was given last week, there is not universal support for the taxation and spending framework.

The approach taken to taxation have been questioned by organisations as diverse as ERINI, CBI and NICVA.

The low taxation approach at the expense of investment in public services is regressive. The benefits will disproportionately benefit the more affluent elements of society.

Furthermore, the claimed benefit of £1,000 per household has been questioned by Oxford Economics.

Much of this budget depends upon the 3% efficiency savings being achieved.

Alliance has no doubt that 3% efficiency savings are possible. Indeed, in the private sector such annual savings would be routine.

However, we do have a concern at the rather narrow ground over which the efficiency savings are being sought.

There are large questions regarding how public services are actually being delivered that are not being targeted.

The most obvious area in this regard is that of education, and in particular sustainable schools. There are huge inefficiencies within the current school estate, and no policy regarding area planning and collaboration between schools has so far been produced, never mind incorporated into the budget.

The wisdom of attempting a considerable amount of capital asset sales at a time when the property market has slowed down is not entirely obvious. Many of the targets are ambitious, but they are largely aspirational without the means to deliver them obvious.

In terms of the economy, much of the real control still lies outside the control of this Assembly.

This is regrettable, in particular given that the British Government’s regional policy, if that is what it can be called, remains focused on protecting the dominance of London and the South East of England with all of the other regions remaining within a dependency situation. This is not healthy, and it is not sustainable.

It is unfortunate that the targets for measuring economic convergence have now been changed.

Rather than comparing our performance to the UK average, we are now to be compared to the UK average minus the Greater South-East.

While I can understand the desire to avoid the distortions that arise from the South-East, what we are now doing is simply comparing how we do in fighting with other regions for the scraps from table.

But there is more than we can do within our own economic and financial powers.

The investment in the four identified drivers of the economy is welcome.

But an obvious point raised by the CBI and others is that rather than populism on taxation more resources could have been poured into these drivers.

We are also still focused on an old-fashioned approach to economic support rather than truly embracing globalisation.

Money is to be poured into modernising agriculture – a worthy cause in itself. Yet, agriculture is a shrinking element of our overall economy, and other sectors could have benefited from such cash injections to a much greater extent.

Much of our inward investment strategy still depends upon the grant-making approach of Selective Financial Assistance.

A properly informed debate needs to occur on the relative merits of investing resources for SFA compared to greater investments in the economic drivers.

The one fiscal tool the Finance Minister has is industrial de-rating. This is itself anachronistic, having been first introduced back in 1929. England, by contrast, abandoned it in the 1960s. The Minister here has sought to ignore the advice in the report that he commissioned.

The overall approach to fiscal matters has been governed more by populism and than evidence-based public policy.

The consequence has been that our public services are under-funded.

We do not have to match the levels of funding according to the UK average. Devolution is about making different priorities. But the people should be able to make informed choices.

Alliance has already highlighted the imbalance between roads and public transport within the overall transport budget.

The arts sector was the most vocal during the consultation period. The additional £2 per annum is useful, but let’s be clear it does not bring funding on the arts into line with at least the UK average.

With Northern Ireland having a comparative advantage in our artistic and creative assets, this should surely be obvious.

Finally, I want to concentrate on the area of health.

Michael McGimpsey has acted like the Grand Old Duke of York, marching us to the top of the hill and then down again in his campaign for proper funding for the Northern Ireland health service.

He seems to have settled for much less than what is required to maintain a level of healthcare on a par with that in the rest of the United Kingdom for the sake of a façade of unity within the Executive.

To keep up with the pace funding in the rest of the UK, Northern Ireland needs a health budget of at least £4.4billion. This revised budget is still some £200m short of where we need to be just to maintain the same standard of health care.

The DUP can talk all they want about record funding for the health service, but the simple fact is that we are not keeping pace with investment in the rest of the UK.

Within the Executive Budget, there is little genuine new money for health. The proceeds of efficiency savings are simply the reprocessing of existing funds. Monies that will come from monitoring rounds will not have any influence base-lines.

Only the new £10m per annum for mental health is new money, and this is barely sufficient to address the serious under-funding in that critical aspect of healthcare. But even here, it barely scratches the surface and does not address the fact we are only spending 8% of our budget on mental health issue compared to the UK average of 12%.

All over the world health costs are rising. People are living longer, and the prices of drugs and new technologies are rising. Sadly, Northern Ireland continues to have a much higher needs base per head than the rest of the UK. It would be good if the Executive were talking about trying to close this needs gap, but they are not.

Efficiency savings are clearly necessary within the health service. But they must not be about cost-cutting and denying funds to be invested in the well-being of the population. Efficiency savings should allow old, outdated practices to be removed, freeing resources to be invested into new treatments.

Alliance would like to see a much greater emphasis on preventative care, public health, and mental health services. Furthermore, there are no funds to deliver free personal care, something that was a manifesto commitment of all the executive parties.

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