Cuts… the inconvenient truth

The language of the “Commentariat” is clear – essentially, “Northern Ireland cannot deal with more cuts“. Frequently, our economic woes – rising unemployment, rising cost of living and so on, are put down to “Tory cuts“. We hear even how our retail sector is suffering because “cuts have taken money out of the economy“.

There is a slight flaw in all of this – there haven’t actually been any…

In fact, DFP figures show:

  • in 2009-10, total public expenditure in Northern Ireland was ₤21.8 billion, rising to ₤22.4 billion in 2010-11;
  • in 2009-10, “identifiable” public expenditure in Northern Ireland was ₤18.9 billion, rising to ₤19.2 billion in 2010-11;
  • total public expenditure grew by 24.3% in the period 2006/7 to 2010/11, even though revenue only grew 2.8%.

This is incredible stuff. Over a five year period, public expenditure grew by nearly a fifth, even though revenue barely increased at all.




11 thoughts on “Cuts… the inconvenient truth

  1. Do you have a link to the source material?

  2. … and that was before today’s wage figures, showing median earnings up twice as fast in NI as GB (and comparatively much faster in public than private sector).

  3. Indeed and Richard Ramsey is tweeting quoting a survey saying that NI public sector pay is the highest in the UK outside London. Can this be true? If so we truly live in a parallel universe.

  4. other paul says:

    The choice of time-frame used by the report seems quite dishonest/inappropriate to me. From 2007ish onward we’ve seen quite a severe recession, and the report does show that NI is pretty similar to the UK in that their revenue growth was 5.7% compared to 25.7% growth in expenditure. The figure is roughly equivalent to an annual 5.5% increase over 4 years, which is probably equivalent or very slightly above the real rate of inflation.
    I think it’s just a matter of whether you believe that austerity is the correct approach to get out of this recession.

  5. Eve Earley says:

    Debating the statistics is a waste of time. Bottom line: we are not self sustaining. The cost of running the province needs to go down.

    Business here needs a level playing field to compete with the Republic. We get that with a lower corporation tax and a lower VAT on hospitality. We can have both if we find the savings to finance it.

    Begin with waste, fraud and duplication of effort, the budget could be cut without pain.

    Start with: “I have money I have to spend by March”. These conversations begin with agencies in January/February. Private industry rewards managers for coming in under budget. Let’s adopt the strategy. Incentivise efficiency – right now we penalise it.

    Cooperating vs. competing departments could use a third quarter budget review to “re- allocate” funds and spend them more efficiently.

    Changing the “use it or lose it” policy may not be possible in the short term; the practice and implementation of the policy is under our control. Where there is a will there is a way.

    Changing the policy in the longer term is possible. Citizen voices can demand change; we need to learn to exercise our voices – and lobby. We get the government we deserve.

    We deserve a lot better.

    • Your first and penultimate paragraphs are really, really important there.

      We are not self-sustaining – and yet some MLAs think we can afford higher *public sector* pensions (for workers already paid 45% more!)

      Yet we can write and say this as often as we like – without an effective lobby, it’s hopeless.

  6. other paul says:

    Hi Eve,
    I agree that we are not self-sustaining but that argument was not what was originally posted. As far as how to promote growth in the private sector I’m afraid we’ve much to offer any investors. I think lowering the regional corporation tax here would be a mistake and I hope that it never happens, but apart from that it seems that we’re a backwards economy that doesn’t try to think our way out of trouble (like you could if you used statistics) but instead relies on “me-too” policies.

  7. […] clip to Ian Parsley for the striking news that despite all the talk about cuts in Northern Ireland, there simply have not been any (at least […]

  8. Editor says:

    Frankly this mirrors the situation in GB. There has been no discernible moderation of public spending. The local Exec is making things worse by attempting also to peg capital spend by robbing spend from future periods. The situation is shambolic.

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