The Northern Ireland Executive has agreed to borrow £100 million from the UK Chancellor of the Exchequer as a stop gap to avert an impending budget crisis.
Political leaders agreed yesterday evening to a loan facility extended by the UK Chancellor of the Exchequer George Osborne from the UK National Reserve.
It means that the Northern Ireland Executive will not exceed its spending limits by more than £200 million at the end of the current financial year.
Part of the North’s budget woes have arisen because it has been forced to pay fines to the UK Treasury which currently run to £87 million because political parties could not reach agreement on implementing the UK Government’s national welfare reforms.
The loan will temporarily solve some of the Northern Ireland Executive’s financial problems but not everyone agrees it was the right move.
The leader of the Alliance Party and the North's Justice Minister David Ford said the Executive decision was 'irresponsible, bad government, which will only make matters worse in the long term'.
“While an agreement was reached between the DUP and Sinn Fein, yet again they have simply agreed to push the big decisions further down the line.
“They still haven’t resolved the issue of welfare reform and they continue to protect the Department of Education on the basis of a ‘one for me, one for you’ carve up. Worst of all, they have now agreed to pile an extra £100million debt onto next year’s budget, but no agreement to make the kind of reforms that will be needed to manage that budget.
“This is the kind of money management that government advises its citizens to avoid - hiding your head in the sand, refusing to accept the reality of where you are, and borrowing on one credit card to pay off another,” Mr Ford said.
The North's political leaders said the Executive has also agreed to cuts across departmental spending that was proposed by the Finance Minister Simon Hamilton.
As a result of this there will also be reallocation of funding - chiefly to the Department of Health and Department of Justice.
