Revealed: £1bn black hole threatening day to day running of NI

STORMONT departments could be facing £1 billion in spending pressures, it has emerged.

It comes as many continue to grapple with mounting demands on already tightening departmental budgets.

The squeeze will be felt in the next financial year, but may not mean cuts of £1bn, as funding can be reallocated between departments.

The BBC has reported that, on current projections, Stormont’s block grant for day-to-day spending is due to fall by almost 2% in real terms in 2018/19, and a further 3% in 2019/20.

It is hoped, however, that Northern Ireland’s financial position could improve when Chancellor Philip Hammond presents his Budget next month.

The funding package secured by the DUP in its deal to prop up Theresa May’s Conservative Government will not be released until Stormont is back up and running.

While that money will help boost the economy and invest in new infrastructure, the BBC reported that the funding package will only partly mitigate spending pressures.

It said that around £310m of it could be used for day-to-day spending over the next two years, mainly in health and education.

The Department of Health — which has been told to make savings of £70m — will face the largest spending pressure of £400m.

Other cuts include £200m in education, £50m in skills, £25m in housing maintenance and £10m in public transport.

There are also pressures of £100m linked to the Historical Institutional Abuse Inquiry (HIA).

Last month medical professionals reacted angrily after Richard Pengelly, the civil servant running health, ordered cuts of £70m. Around 200 representatives from medical bodies and trade unions staged a protest at Parliament Buildings against the move.

Northern Ireland’s five health trusts were to told to make the cuts to plug budget shortfalls.

Stormont’s annual budget is £10bn for day-to-day spending, and around £1bn for capital spending.

A Department of Finance spokesman said it had “commissioned an information-gathering exercise to collect the necessary data that will allow a future executive to make key, informed decisions on a budget for 2018/19 and beyond”.

“It will be for an incoming Executive to make decisions about funding levels and final budgets.”

Education also faces huge “cost pressures” of more than £205m.

A report released earlier this week revealed that a lack of devolved government is hampering economic growth after the institutions collapsed in January.