Murphy playing hardball with Treasury to replace lost EU cash

THE warning signs of unresolved questions were conspicuous in January when Conor Murphy issued a first draft of the possible budget for 2021-22.

The draft revealed critical unanswered questions for the incoming year. The Finance Minister described the budget as pointing to everyday spending standing still and only a marginal increased allowance for capital funding.

The Treasury will have been expecting to receive an agreed Northern Ireland budget which conforms to the spending limits as proposed late last year by the Chancellor.

Mr Murphy, making common cause with Scottish and Welsh Finance Ministers, has been arguing the Treasury has been unreasonable in the reduced amounts made available following the Brexit deal to replace EU funding that is no longer available.

Tension between Mr Murphy and Arlene Foster essentially reflects an ambition by the Finance Minister to underline that there is too little funding to meet the commitments made when the incoming Executive agreed the New Decade, New Approach agenda. Less conspicuous, but even more important, is the tension between Mr Murphy and ministers in the UK Treasury.

Mrs Foster is anxious to avoid local problems if there is no agreed budget and will be concerned that, at a later stage, agreeing an inter-departmental budget may involve critical decisions on where the axe may fall.

The draft budget made the difficult budget arithmetic clear.

In addition it pointed to several spending areas where decisions had still to be reached with the Treasury.

Add into the debate the transfer, for the first post-eu year, of the money to be allocated for farm payments, the ending of some mitigation arrangements on welfare payments, and the non-renewal of a one-off £350m for first year of the New Decade, New Approach agenda, and the 2021-22 budget was always going to be difficult.

The Government arrangements will keep most normal financial payments going.

However, that is at best temporary.

A difficult financial deal involving the Treasury and finance officials will eventually be needed. Northern Ireland is asking for more... again!

‘Draft budget made difficult sums clear’