Budget 2008-11 Presentation to CIPFA Richard Pengelly NI Ex - PowerPoint by nyx11518

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									Budget 2008-11
   Presentation to CIPFA

     Richard Pengelly
NI Executive Budget Director

     18 February 2008
Outline
 Overview of UK Public Expenditure
  System
 NI Public Expenditure Overview
 Draft Budget
 Public Consultation
 Revised Budget
 Delivery



                                      2
UK Public Expenditure System
UK Public Expenditure Structure
             Total Managed Expenditure
                       (TME)

   Departmental                Annually Managed
 Expenditure Limits              Expenditure
      (DEL)                         (AME)


Resource   Capital            Resource Capital
 Budget    Budget              Budget Budget


                                                  4
HM Treasury Fiscal Rules
 UK Government’s approach to public
expenditure is underpinned by
Chancellor’s two (self-imposed) Fiscal
Rules:
  Golden Rule
  Sustainable Investment Rule



                                         5
Spending Review Coverage
99/00   00/01   01/02   02/03   03/04   04/05   05/06   06/07   07/08   08/09   09/10   10/11




 1998 Comprehensive
   Spending Review


                Spending Review 2000


                                Spending Review 2002



                                                 Spending Review 2004


                                                                        2007 Comprehensive
                                                                          Spending Review



                                                                                                6
UK Fiscal Position more constrained
than in previous years
7.0                                                                                                                                                                                                                      41.0%

                                                                   Real Growth
6.0                                                                                                                                                                                                                      40.0%
                                                                   % of GDP

                                                                                                                                                                                                                         39.0%
5.0

                                                                                                                                                                                                                         38.0%
4.0
                                                                                                                                                                                                                         37.0%
3.0
                                                                                                                                                                                                                         36.0%
2.0
                                                                                                                                                                                                                         35.0%

1.0
                                                                                                                                                                                                                         34.0%

0.0                                                                                                                                                                                                                      33.0%
       1991-92

                 1992-93

                           1993-94

                                     1994-95

                                               1995-96

                                                         1996-97

                                                                   1997-98

                                                                             1998-99

                                                                                       1999-00

                                                                                                 2000-01

                                                                                                           2001-02

                                                                                                                     2002-03

                                                                                                                               2003-04

                                                                                                                                         2004-05

                                                                                                                                                   2005-06

                                                                                                                                                             2006-07

                                                                                                                                                                       2007-08

                                                                                                                                                                                 2008-09

                                                                                                                                                                                           2009-10

                                                                                                                                                                                                     2010-11

                                                                                                                                                                                                               2011-12
-1.0                                                                                                                                                                                                                     32.0%

Source: HM Treasury, Pre-Budget Report 2006, Tables B8, B9 & B31                                                                                                                                                             7
NI CSR Outcome
   Announced 9 October 2007
   Headline real growth of 1.7% per annum
      Resource- 1.3%

      Capital- 4.4%

   Actual growth of 1.2% on like for like basis;
   NI growth lower than rest of UK
   Department of Children, Schools and
    Families (3.1%), Department of Health (3.9%)
                                                8
2007 Comprehensive Spending Review
Outcome lower for NI than UK as a whole
                                 6.0%

                                                                               NI Executive
                                                                               UK
                                 5.0%
    average annual real growth




                                 4.0%



                                 3.0%



                                 2.0%



                                 1.0%



                                 0.0%
                                        CSR 98   SR 2000   SR 2002   SR 2004         CSR 07
 Source: HM Treasury


                                                                                              9
NI Public Expenditure Overview
Funding Sources for Devolved
Functions in Northern Ireland
                        Rates Borrowing
               EU Peace 5.8%    2.1%
                 0.4%




                            HM Treasury
                               DEL
                              91.6%



 Source: DFP


                                          11
NI Public Expenditure 2007-08(£bn)

             Current   Capital

     DEL       8.0      1.4

     AME       7.4      0.2

     Total     15.5     1.6
Public expenditure per head in NI is the
highest of the UK regions.
 Total Identifiable expenditure per head for UK regions, 2006-07

       10000
        9000
        8000
   £
        7000
        6000
        5000
                                  London




                                                                                                                                      South East
                       Scotland




                                                                North West




                                                                                                                      East Midlands
               NI




                                                                                         West Midlands
                                                        Wales



                                                                             Yorkshire
                                           North East




                                                                                                         South West




                                                                                                                                                   Eastern
   Source: PESA 2007                                                                                                                                   13
                                               UK=100




                                        110
                                              160
                                                    210
                                                          260
                                                                310




                                   60
                         Public order




     Source: PESA 2007
                          Economic
                         development
                         Science and
                         technology
                         Employment
                          policies
                                                                                                                                    of public services.




                          Agriculture


                           Transport


                         Environment


                            Housing


                              Health

                          Education
                         and training
                                                                      NI Expenditure per head relative to UK by function, 2006-07




                             Social
                           protection
                                                                                                                                    Expenditure is higher in NI across range




                               Total
14
Draft Budget 2008-11




                       15
On 25 October 2007, the Executive
launched three key documents for
public consultation:

   Draft Programme for Government 2008-11

   Draft Budget 2008-11

   Draft Investment Strategy 2008-18


                                         16
Programme for Government
Overarching aim:

A peaceful, fair and prosperous society
in Northern Ireland, with respect for the
               rule of law




                                            17
PFG Executive Priorities
•   Grow a dynamic, innovative economy

•   Promote tolerance, inclusion, health
    and well-being

•   Protect and enhance our environment
    and natural resources

•   Invest to build our infrastructure

•   Deliver modern, high quality and
    efficient public services

                                           18
PFG Key Goals
   Halve the productivity gap with rest of UK (excluding
    South-East)

   Increase employment rate from 70% to 75% by 2020

   Maximum waiting time for hospital treatment reduced
    to 9 weeks for out-patients and 17 weeks for in-
    patients

   Extend free public transport to everyone aged 60 and
    over during 2008

   Reduce child poverty by 50% by 2010 and eradicate
    it by 2020
                                                            19
Investment Strategy for NI
   Identifies priority areas for investment


   Assists public and private sectors with planning of
    largest ever investment programme


   Not a detailed blueprint – departments will publish
    individual delivery plans


   £5.6bn in next 3 yrs; £19bn+ over 10 years
                                                          20
Draft Budget 2008-11
Rates:

   Domestic Rates to be frozen over Budget
    period to provide full benefit of offset;

   Non-Domestic Rates to rise in line with
    inflation only; and

   Industrial Derating to be capped at 30% of full
    liability
                                                 21
Share of 2007-08 Current Spend

                          Health                      Environment
                           46%

                                                     Regional
                                                   Development

                                                     Social
                                                  Development


    Education
      21%                                      Agriculture
                                       Other
            Enterprise,
              Trade &         Employment and
                                 Learning         Source: NI Budget 2006-08
            Investment




                                                                              22
Additional £900 million in expenditure
(resource) by 2010-11


                                Health
                                51.3%


                                                    DOE
                                                   0.05%
                DETI                              DRD
                3.4%                              6.5%
                                                      DSD
                                    DE                0.1%
                    DEL            26.3%
                    9.8%                          OFMDFM
                                           DCAL
                                                    1.5%
                                           1.0%
  Source:Draft Budget 2008-11




                                                             23
Response to poor CSR outcome-
need for efficiency savings
 3% per annum target across all
  Departments;
 Includes 5% real terms reduction in
  Administration;
 Provides £790 million in enhanced
  spending power to Departments


                                        24
Spending Power enhanced by
efficiency savings
              900
                           Additional Spending Power
              800
                           from Efficiencies
              700          Increase on 2007-08 baseline

              600
 £ millions




              500
              400

              300
              200
              100

                0



                                                                 DETI




                                                                                    DEL


                                                                                          DE
                                DOE




                                                                              DRD
                                                                        DSD
                                                DCAL


                                                          DARD
                                       OFMDFM




                                                                                               Health
                     DFP




              -100




    Source: Draft Budget 2008-11



                                                                                                        25
£2 billion in Capital Investment (Gross)
by 2010-11          DCAL
                 OFMDFM
                   1.1%   4.6%
                                     DE
          DSD
                                    14.2%
         23.2%


                                              DEL
                                              2.7%
                                               DETI
                                               6.3%
                                               DFP
                                               1.4%



                                     DHSSPS
          DRD                         14.2%
         28.3%
                             DOE            Source: Draft Budget 2008-11
                             4.1%

                                                                           26
Draft Budget Consultation




                            27
Public Consultation
 Joint 10 week consultation with PfG and
  ISNI
 Consultation events across NI (well
  attended)
 Take Note Debate in Assembly (27
  November 2007)
 Departments own events.

                                        28
Consultation Responses
 9,500 written responses (mainly
  petitions)
 Main Issue:
    The Arts, Sports & Libraries

    Mental Health

    Children & Young People

    Social Housing

                                    29
EQUALITY
 Pre-consultation exercise in late 2006;
 All Spending Proposals in draft Budget
  process subject to High Level Impact
  Assessment;
 Joint Equality Impact Assessment on
  PfG, Budget and ISNI- currently being
  consulted on.

                                            30
Revised Budget




                 31
Revised Budget 2008-11
 Public Consultation closed – 4 January
 Executive agreed revised Budget- 21
  January
 Revised Budget launched in Assembly-
  22 January
 Final Budget passed in Assembly – 29
  January

                                       32
Changes from Draft Budget
   Response to consultation:
     £30 million for Mental Health

     £13 million for Children & Young People

     £4 million for Arts and Sports

     £6 million for Victims



   Additional flexibilities for DHSSPS
   £90 million Funding for Innovation initiative
                                                    33
DELIVERY




           34
Executive has plans to deliver
through:
   Public Service Delivery Agreements for 23
    cross-cutting PSA’s:
      Accountability

      Measurement

      Risk and contingencies

   PfG Goals and Commitments
   Efficiency Delivery Plans for 3% target.
   Investment Delivery Plans for ISNI
                                                35
Executive will ensure delivery
through:
 Publication of Delivery Plans
 Robust monitoring arrangements
 Enhanced Financial Management
 Strong (risk- based) performance
  management system
 Performance & Efficiency Delivery Unit
  (PEDU).
                                           36

								
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