§ The Lord President of the Council (Baroness Amos)
My honourable friend the Parliamentary Under-Secretary of State for Northern Ireland has made the following Ministerial Statement.
Following consultation on the Government's Draft Priorities and Budget for Northern Ireland which was launched on 12 October 2004, I am today setting out 107WS the Government's priorities and spending plans for the Northern Ireland departments for the period 2005–06 to 2007–08.
When devolution was suspended in Northern Ireland we pledged that we would work tirelessly to bring about an early restoration of devolved government. We have and will continue to strive to bring this about so that the issues and plans set out in the priorities and budget can become the responsibility of Ministers accountable to a Northern Ireland Assembly. However, until then we are determined to continue to deliver on our plans to address the challenges facing Northern Ireland and ensure the delivery of better public services.
The resources underlying these priorities and budget proposals were largely determined by the outcome of the national spending review 2004 (SR 2004), as announced by the Chancellor of the Exchequer on 12 July 2004. These resources have been supplemented by forecast local rates revenue and the use of the borrowing power available under the reinvestment and reform initiative over the next three years. This is a substantial allocation and provides for continuing real growth in public expenditure by Northern Ireland departments, reaching in excess of £9 billion by 2007–08.
The priorities and budget which we are publishing today sets out the Government's priorities for Northern Ireland and how we plan to use the resources available to us to pursue these over the next three years. In reaching final decisions on resource allocations my ministerial colleagues and I have listened carefully to the issues raised and concerns expressed during the consultation of the draft proposals, and where it has been possible we have taken action to address these concerns.
These plans will continue to build on the progress made by the former Northern Ireland executive under devolution and continued by the Northern Ireland ministerial team since devolution was suspended. Our vision for the future of Northern Ireland is for a peaceful, inclusive, prosperous, stable and fair society, firmly founded on the achievement of reconciliation, tolerance, and mutual trust and the protection and vindication of human rights for all. Our key objective therefore is to develop a strong economy and a society that is fair for all. In pursuing this objective we must ensure that all available resources are used to the best possible effect. That is why this budget will ensure that investment is matched with reform, and steps will be taken to improve public sector performance and efficiency, ensuring that increased resources have maximum impact on the delivery of key front line services.
The three key themes and associated objectives underpinning these plans are:
Economic competitiveness—to make Northern Ireland a more competitive and productive region.
Building equality and community cohesion—to increase opportunity for all and ensure stronger communities.
Better public services—to ensure excellent and efficient public services for all.108WS
In order to meet these objectives we have set ourselves targets across a number of important priority areas, where the proposed outcomes are intended to deliver the changes needed to ensure the achievement of our vision for Northern Ireland. The ministerial team will concentrate on these targets, monitoring them closely to ensure that they improve policy making and provide better public services for the people of Northern Ireland.
For economic competitiveness, we have set targets of reducing the productivity gap with the rest of the UK; increasing the proportion of the working age population who are economically active; and by July 2007 opening up the electricity market to all consumers. These and other actions will help generate the conditions to enable the economy to become more competitive at national and international levels.
We want to encourage increased expenditure on research and development, to optimise the exploitation of Northern Ireland's world-class telecommunications structure and achieve a competitive, sustainable and reliable energy market to improve competitiveness and stimulate enterprise. Through Invest NI we will provide support for companies to become more competitive through the development of their capabilities.
We also recognise the importance of workforce skills as a driver for economic change and growth. Increasing productivity and competitiveness, improving public services and addressing social disadvantage will all require a substantial increase in the overall skills of the workforce. One of our top priorities, therefore, is to improve the level of skills and qualifications in Northern Ireland, and we will do this by reforming key elements of the vocational education and training system.
In building equality and community cohesion, we are committed to building on our strong legislative and public policy frameworks to progress our goal of a more equal and inclusive society with strong, cohesive communities in which differences are accepted, respected and celebrated. We will continue to ensure that equality considerations are mainstreamed into policy development. Through promoting social inclusion (PSI) initiatives we will continue to support joint working across departments, in partnership with statutory agencies and voluntary and community organisations to promote a more inclusive society.
Tackling poverty and disadvantage remain key priorities and we will build on New Targeting Social Need by bringing forward a new anti-poverty strategy. We want to combat poverty by supporting people to move from welfare to work and increase benefit uptake through targeting vulnerable groups. We are also determined to reduce the number of households living in poverty through co-ordinated policy and action across the social security, health and education sectors. Through the implementation of the neighbourhood renewal strategy we aim to narrow the gap between those living in the most deprived neighbourhoods and the rest of Northern Ireland. Support for victims and survivors remains a priority and as Northern Ireland emerges from conflict it is important that we pay particular attention to 109WS the citizens of tomorrow. To this end, a 10-year strategy for children and young people will be taken forward and we will continue to support the Office of the Commissioner for Children and Young People.
Investment in health remains a top priority for the Government in Northern Ireland. The budget provides for a rise of 23 per cent in current spending on health over the next three years. This will enable investment in priority services such as renal, cancer and other critical care areas and will provide for enhancement to community, primary and intermediate care services, services for the elderly and those with mental illnesses.
We need to ensure that the major increases in funding for the health and social care sectors that have taken place since 1997 are used to deliver the best possible care and treatment, and improve the overall health of the population. It is in this context that an independent review of health service delivery in Northern Ireland has been commissioned. The review will be led by Professor John Appleby of the King's Fund and will examine the effectiveness and efficiency of health service delivery. The review will report initial findings to Ministers in April 2005 with the final report scheduled for publication by summer 2005.
Current spending on education will increase by 11 per cent over the budget period and capital investment will increase by 6 per cent. A high quality education system remains a key priority for the Government and these expenditure allocations will allow us to take forward a programme of education reform that will change and improve substantially what children learn, how they learn, and the environment within which they learn. These reforms will produce significant benefits for children, for society and for the economy. They will also allow us to maintain a focus on improving literacy and numeracy standards, particularly among disadvantaged pupils, and continue to address the requirements of children with special educational needs.
The priorities and budget also provides for an unprecedented growth in capital investment in Northern Ireland's public service infrastructure, with levels of investment planned to grow to over £1.2 billion a year in each of the next three years. The reinvestment and reform initiative (RRI), launched in May 2002, remains a key enabler of the major improvements required to Northern Ireland's infrastructure, particularly in the major public services of health, education, roads, public transport, water and sewerage. The Strategic Investment Board was established in 2003 to help drive forward the reinvestment and reform initiative by improving expertise in procurement and spearhead the development of public/private partnerships. Major investment programmes do of course take several years to deliver which means we need to plan several years ahead to ensure we allocate investment funds effectively. 110WS That is why the Strategic Investment Board has drawn up a longer term 10-year draft investment strategy for Northern Ireland which is also being published today for consultation.
In seeking to deliver better public services a key focus of these plans is on efficiency and the reallocation of resources released through efficiency improvements to priority front line services. These plans include targets for the public sector to deliver efficiency gains of 2.5 per cent each year over the next three years, at least half of which will release resources for reallocation to priority front line services. As a part of this, the administration costs of civil service departments are being held flat at 2005–06 levels over the next three years and civil service numbers will reduce by 2,300 across all departments. We also plan shortly to publish proposals flowing from the review of public administration with a view to reaching final decisions in the summer of 2005 and implementation by 2008–09. The review will contribute to the more effective delivery of public services and efficiency savings arising from its implementation will be in addition to those in current plans.
This priorities and budget builds on the substantial real growth in public expenditure that has occurred in recent years and will continue for the next three years. From 2002–03 to the end of this budget period expenditure by Northern Ireland departments will have grown by a third in cash terms—or by 20 per cent in real terms. Infrastructure investment is planned to grow by 30 per cent next year alone, and this extra investment will be sustained in the years after that. The challenge now is to deliver the better services and modern infrastructure that people want and Northern Ireland needs to enhance its competitiveness and to build a fairer society.
I have placed copies of the Northern Ireland Priorities and Budget 2005–08 document in the Library.