Northern Ireland government departments face a £1bn revenue shortfall – 10% of their annual spend – finance minister Nigel Dodds admitted to the Northern Ireland Assembly.
Dodds said that the worsening UK economy meant that the Northern Ireland Executive expected to receive a reduced block grant from the Treasury. It also faces spending demands not budgeted for, including lost income from the deferral of water rates; higher unemployment; pressures on schools; higher fuel and energy costs; and increased unemployment.
Other financial problems include concerns about departments’ ability to meet the Executive’s 3% efficiency savings, while projected capital receipts of £175m have been lost through the suspension of the Workplace 2010 programme to sell and leaseback offices. In a separate move, Dodds announced an £8m support package for district councils, which are also in financial difficulty.