With public protests about the economy on the streets of Dublin, what is the economic situation north of the border and what is the impact going to be on the church and charity sector?
The British government's austerity measures could cut Northern Ireland's power to spend by a quarter and plunge it into a prolonged recession, First Minister. Peter Robinson said earlier this week.
The Tory-LIberal coalition government’s cuts will present the Executive with its biggest challenge yet. Northern Ireland, traditionally reliant on central handouts from London, faces increased responsibilities after its executive this year took charge of justice matters and as it battles an upsurge in violence by Irish nationalists.
The coalition government has vowed to slash government spending in a bid to drive down its deficit, which is running at around 11 percent of national output.
“I have warned that cuts in public expenditure were unavoidable but that supporting the Tory/UUP proposals for severe cuts (80 billion pounds over 5 years) rather than a more gradual approach would endanger economic recovery in Northern Ireland," Robinson said.
The First Minister will urge the Northern Executive today to adopt a strategic approach rather than descend into departmental or political party interests. This is wishful thinking. Reg Empey has stated that the focus of the executive should be on revitalising the economy with the help of the Westminster government. Margaret Ritchie has been vocal warning the DUP and Sinn Fein not to continue using their ministerial majority to control the Executive.
Peter Robinson stated, “In these difficult economic conditions the Executive’s main priority must be to keep people in work and put people back to work. If necessary, budgets should be skewed to maximise the effect of public expenditure in keeping the economy moving forward.”
The former Finance Minister referred back to his June alert that supporting “the Tory/UUP proposals for severe cuts (£80bn over five years) rather than a more gradual approach would endanger economic recovery in Northern Ireland.
“The prospect of our public expenditure being cut by 20-25% (in the region of £2bn) will have a devastating impact and likely bog Northern Ireland down in recession for a prolonged period.”
“Rather than simply salami slicing budgets the Executive must agree a strategic approach to the challenges that we are faced with. This will undoubtedly mean difficult and painful decisions.”
In May the Executive was told it must find new savings totalling £128m on top of a further £393m that were already planned for the current financial year.
In early September, a senior civil servant at the Department of Culture, Arts and Leisure has said that job losses are inevitable because of the cuts it has to make.
The department has confirmed it has to make savings of 17.2% over a four year period between 2011 and 2015.
DCAL director of finance Deborah Brown said the consequences would be "widespread and unpalatable".
She said that museums and libraries would potentially have to close and the levels of service would also fall. Overall, the department's current budget of £109m is projected to fall to less than £92m by 2014/15.
Speaking at a Stormont committee meeting last week, Ms Brown said the figures represented a cumulative cut of £46m over the budget period. She said the department would cuts its operating budget by 14% while its supporter bodies like the Arts Council and Sport NI face cuts of 18%.
She said grant giving bodies like Sport NI and the Arts Council would be "probably to able to accommodate budget reductions more quickly" whereas museums and libraries would need more time to make cuts as most of their cost are related to staff and buildings.
Impact on charities and donations
NICVA - the organisation which represents community groups and charities - has warned that over the next twelve months the charity sector will lose over £100 million pounds in government funding and a drop in charitable donations. The churches may also feel the pinch as many local churches have created outreach and service agencies which receive funding from government departments. The church leaders earlier this year met with representatives of the banking sector. This effort will need to be renewed as members increasingly fell the impact of an economy still in recession.
- Team ICR
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