A senior civil servant has been put in charge of Northern Ireland’s Stormont’s finances because of the failure to pass a budget before the Democratic Unionist Party (DUP) collapsed the executive in February.
The senior official at the Department of Finance will use emergency powers to release cash to departments until a new budget is in place.
It means existing departments can continue to operate – but no new policies can be funded.
Nor will the civil servant, Permanent Secretary of the Department of Finance Neil Gibson, have the power to distribute more than £400m of unallocated funds which Stormont received from London since the draft budget was published.
Mr Gibson is a former chief economist at EY. He has held senior roles across the private and public sectors and in academia and joined Stormont’s Department of Finance this year.
Until now departments in Northern Ireland could operate without a formal budget because of ‘the vote on account’ – a legal mechanism which allows spending of up to 45 per cent of the total allocation in the first few months of a financial year before full budget legislation is passed.
That 45 per cent limit is being reached.
Section 59 of the Northern Ireland Act allows Mr Gibson to use money, equivalent to up to 95 per cent of Northern Ireland’s 2022 budget, “for such services and purposes” as he directs.
For most departments the new authorisation has been set at approximately 60 per cent of their 2021-22 financial allocations. They will be reviewed at the end of October.
If the 95 per cent limit is reached it will trigger cuts of least 5 per cent across Northern Ireland’s public services.
If the DUP continues to block the formation of a government in Stormont – and a budget – Westminister takes control.
In March 2017 the then Northern Ireland Secretary, the late James Brokenshire, used Section 59 powers to take budget legislation through Parliament that November.
Stormont departments are operating on contingency funding arrangements with restrictions on the cash they can spend.
They are operating without a politically agreed budget for the 2022/23 financial year.
A spokeswoman for Northern Ireland’s Department of Finance said: “These contingency arrangements are no substitute for an agreed budget and while departments will have legal cover to continue to spend on delivering services, they will still not have the certainty that an agreed budget would provide.”
