Review of New Rating System, Brian Wilson North Down Councillor, first Green Party MLA in Northern Ireland

Report on the Executive’s Draft Budget 2008-11

Northern Ireland Assembly, Tuesday 27 November 2007

Mr B Wilson: My first reaction to the draft Budget was extremely positive. The presentation highlighted the economy, emphasised the need for innovation, the encouragement of enterprise and the creation of 6,000 highly paid jobs. In social terms, it rejected water charges, proposed free transport for the over-60s, and it emphasised the Executive’s green credentials with the proposed introduction of a rapid-transit system forBelfast.

However, as the details emerged, the initial presentation seemed rather disingenuous. The draft Budget was rather like an Easter egg — attractive on the outside, but with little substance and with a great hole in the middle.

The draft Budget raises serious questions. It is based on unrealistic assumptions and party-political considerations and does little to tackle the real problems facing our economy. That is particularly true in respect of the environment. Recently the Assembly expressed concern about climate change and agreed to show leadership in putting sustainable development at the centre of policy making. There is absolutely no evidence of that in the draft Budget. The commitment to rapid transit is welcome; however, it has been under consideration for a least a decade, and the fact that work will not start until 2011 is disappointing.

The draft Programme for Government proposes reducing the carbon footprint by 25% by 2025. That is hopeful, but no interim targets are stated and there is no evidence of any change in policy to meet that target. Such long-term targets are ineffective and will achieve nothing unless they are accompanied by changes in policy, which this is not. To achieve the target, we must get commuters out of their cars and onto public transport, but an examination of the Department of Agriculture and Rural Development capital investment programme for the next 10 years shows a ratio of four to one in favour of roads, and that differential is increasing. If we wish to reduce carbon emissions, we must take positive action to encourage greater use of public transport. Although such measures will have little impact on the fight against climate change, they are better than the contribution from the Department of Enterprise, Trade and Investment, which is to end the reconnect grants and to stop funding theRenewableEnergyInstallerAcademy. Peter Hain set up reconnect grants to encourage more householders to install renewable energy systems, making renewable energy cheaper, easier, and more environmentally friendly, and to reduce the use of fossil fuels.

Not only will that decision increase carbon emissions, but it is short-sighted as we have a growing local renewables industry that will be strangled at birth if the grants are removed. If the Department of Enterprise, Trade and Investment is serious about encouraging the development of new technology, that scheme should be expanded. As a result of the decision, jobs and skills in new technology will be lost. Similarly, the decision to reduce funding for home insulation under the warm homes scheme will greatly increase carbon emissions.

Overall, the draft Budget seems to be a case of smoke and mirrors. Any increase in expenditure can be met only by making efficiencies — the proposal to make efficiencies of 5% in administration in each of the next five years is extremely optimistic. If those efficiencies are not achieved, the draft Budget commitments cannot be met; if they are met, thousands of jobs will be lost, as the public sector is labour-intensive. That is not mentioned in the draft Budget, nor is there any indication whether it will mean compulsory redundancies.

The public welcome for the proposals on water charges may be premature. Overall, there appears to be no savings, with the costs transferred from one budget to another. The taxpayer will have to meet the same costs. The main recommendation of the Hillyard Report is that £109 million should be paid to Northern Ireland Water from the regional rate and that the Roads Service should pay £25 million for road drainage costs that are met by Northern Ireland Water at present. I ask the Minister for an assurance that the £25 million will not come from the existing roads budget, as it is already under great pressure, and the roads maintenance budget has been severely cut in recent years.

That will reduce the amount that Northern Ireland Water has to raise, but it also means that there will be £134 million less to spend on other services; that is largely ignored in the draft Budget, and it could explain why the Budget increase for the National Health Service is only 2·6%. As a former member of the Eastern Health and Social Services Board and one who was involved in health for more than 20 years, I am extremely concerned by the draft Budget allocation to the National Health Service. An increase of 2·6% is the lowest that I can recall; it compares with an average of about 8% over the past five years.

Had a direct rule Minister presented such an allocation, the Chairperson of the Committee for Health, Social Services and Public Safety, along with many others, would have protested vigorously, as she did in response to previous direct rule allocations. In fact,a 2·6% increase is equivalent to freezing the budget, when one considers that, due to demographic pressure, Health Service inflation is higher than normal inflation.

A freeze, compared to a 4% increase in real terms inEngland, is totally unacceptable, particularly since our waiting and trolley lists and other problems are signific­antly greater than those inEngland. The differential in health expenditure betweenNorthern IrelandandEnglandhas reduced significantly in recent years. A recent study has shown that, taking account of age profile and deprivation levels, the Health Service inNorthern Irelandrequires 10% more resources per capita thanEnglanddue to greater need.

The present differential is approximately 4%. The proposals for 2008-09 would erode that differential completely.

The Department proposes new programmes to reduce the present suicide rate, promote healthier ways of living, halt the rise in obesity, implement the long-delayed Bamford Review findings and reduce MRSA infections. However, the draft Budget does not provide the new resources that are required for any of those programmes. It is suggested that their funding will be met from 3% efficiency savings in each of the next three years.

5.30 pm

Mrs I Robinson: Does the Member agree that there are significant savings to be made, or does he suggest that, because we have done things a certain way in the past, money should be set aside, without there being a need to make productivity and efficiency savings?

Mr B Wilson: I was just coming to that. I recall, for example, that when I was a member of the Eastern Health and Social Services Board, we had great difficulty in achieving efficiency savings of even 1%. As has been pointed out, there are efficiencies to be made in the NHS. However, those efficiency savings cannot be made overnight. The NHS is a massive organisation, so, like an oil tanker that is changing course, it will take time to make those savings. Restructuring the organisation could require the introduction of legislation, and that could take some years. Given the labour-intensive nature of the NHS, 1,000 job losses will be required to achieve the 3% efficiency savings. It seems rather strange to hear of job cuts in the NHS, when we regularly hear about the problems associated with the scarcity of doctors, nurses and midwives, and so on.

Although the rates freeze is politically attractive, if healthcare services for the sick and the elderly are reduced in order to pay for it, that is unacceptable. Is it really a freeze at all when the rates bill will include a separate charge, of more than 20%, to pay for water?

The draft Budget lacks substance and is based on unrealistic assumptions. It will lead to an increase in environmental damage, no significant improvement in the Health Service, especially for the mentally ill, and increased hardship for many of the poorest. Therefore, we should look again at its allocations.


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