North given extra £131m to spend due to Stormont suspension

Civil servants currently in charge of the North's budgets have been given an extra £131 million (€148 million) to spend by the Northern Ireland Secretary of State as an "interim step" to keep its finances on track without a devolved government in place.

In a written ministerial statement on Wednesday, Secretary of State for Northern Ireland James Brokenshire said that the North's two worst budget-strained departments – health and education – will receive the majority of the additional cash; £60 million and £30 million respectively.

The other £41 million will be shared out with the Department for the Economy getting just over £1.2 million – the smallest share of the additional money.

The £131 million is comprised of both previously unspent departmental budgets which are now being reallocated and £42 million which had been earmarked for the North in the UK chancellor’s budget last spring.

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It does not include any of the promised £1 billion windfall for Northern Ireland from the Conservative-DUP pact.

The cash boost will buy the North’s civil servants, who are in charge of daily budgets, some breathing space but Mr Brokenshire has warned that his latest intervention in Northern Ireland’s finances “does not replace the ultimate need for a formal budget”.

“In the Autumn, Northern Ireland must have a proper budget in place to put its finances on a secure footing. Although we are not at that critical point yet, this is approaching.

“I do not want to have to bring forward a formal budget myself. I want that power to be exercised by those who should be exercising it: the Northern Ireland parties, who have been elected by the people of Northern Ireland to provide devolved government here,” Mr Brokenshire said.

Formal budget

But he said if there is not an Executive in place the UK is prepared to step in and pass a formal budget.

This is the second time since the collapse of the powersharing government in the North that the Secretary of State has been forced to step in to sort out local finances.

According to the organisation that represents the 11 councils in the North – the Northern Ireland Local Government Association – it is "hugely disappointing" that he has had to do so.

The Ulster Unionist Party's Arnold Hatch is president of the association.

“The increasing disconnect between people here and the management of our finances and public services is embarrassing and presents local people here with an unsustainable, democratic deficit,” Mr Hatch said.

Business leaders have also said it is “unacceptable” that Northern Ireland does not have an agreed budget a third of the way into the financial year.

The Construction Employers Federation managing director John Armstrong said the budget position in the North was a "source of immense frustration".