Capital Budget Reallocation essential to Rebalancing the Economy says Alliance

Alliance Party Finance Spokesperson, Stephen Farry MLA, has called upon the Executive to redirect some resources from current expenditure to capital expenditure within the draft Budget for 2011/12-2014/15 which is currently under negotiation. Given that the capital budget allocation in the Block Grant was cut deeper than expected while the current budget allocation suffered slightly less than expected, Alliance has argued that this rebalancing is necessary to continue investment in the future growth of the economy, and to assist the construction sector.

Stephen Farry said: “Deep concern has rightly been expressed at the steep reduction in the level of capital funding in Northern Ireland as part of the Comprehensive Spending Review, and the wider failure of the UK Government to honour the terms of the £18bn ten-year investment strategy.

“Continued investment in Northern Ireland’s infrastructure is critical to the future development of the economy and our competitiveness. There is also a considerable spin-off in terms of work for the construction sector, which has suffered particularly hard during this recent recession.

“In addition to exploring innovative means of raising additional resources for capital investment, the Executive should consider redirecting some resources from current expenditure to capital expenditure to meet the current shortfall.

“Alliance believes that this would lead to a more evenly balanced budget, with proper emphasis on building for the future.

“The settlement with respect to current expenditure settlement was better than expected. The reductions amount to 8% on the basis of DFP figures. However, Northern Ireland Departments had been asked to prepare on basis of 10% reductions in current expenditure.

“A full reallocation within these parameters could redirect over £200m each year for the capital budget. Even a more modest reallocation could generate around £100m in each year. It is worth noting that the Scottish Executive has done something similar in its draft Budget.

“In turn, careful decisions would need to be taken regarding the prioritisation of future capital investment to ensure best value for money and strategic investment in the future growth of the economy. Any reallocation of resources should be conducted across the Executive rather than just within individual Departments in order to facilitate this strategic approach.”


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