Why NI's budget crisis could easily have been avoided

If you took a snapshot of Northern Irish civic society right now, it would not look good.

The only answers to questions are other questions; the outlook for the coming months is bleak and thereafter is a mystery.

Political difficulties pose their own problems but the central problem has been the amazing situation that has seen us arrive in a period with no agreed governmental budget.

As we will see, even if the politics had gone no differently this would have been easy to avoid. Questions must be asked as to why this is not the case.

Initial fears that we could see a reduction to a 75% budget have been assuaged – and maybe that would never have been allowed to happen, given the unthinkable but certainly catastrophic consequences – because Secretary of State James Brokenshire has outlined (basic) plans for a budget, but that has not exactly been universally popular.

The third sector was already feeling the pressure, with a huge number of organisations feeling “threatened” by financial and political uncertainty.

So, what is this solution? It’s not magic. It’s not even clever. It’s just what happens elsewhere.

Three-year provision

At Westminster, budgets are for three years.

Of course, this does not mean that is only one budget every three years, but it does mean that spending plans for the subsequent three years are outlined at each budget.

Specifically, Departmental Expenditure Limits (DEL) are set for that period. DEL is the money that is allocate to and subsequently spent by government departments – so it is the cash that supports services, generally speaking. A look at the Tories’ last budget will show their relevant spending plans for the next few years.

In Northern Ireland the DELs are set for the subsequent year only, providing no robust defence against the sort of political breakdown we are experiencing at the minute.

It is also nothing to do with devolution, given the Welsh Assembly, for instance, provides four-year plans for DELs.

That we have not followed suit does not make sense - especially as we are the jurisdiction that is by far the most prone to crises.

Our last document even notes that the figures for total DEL – i.e. the sum total that can be allocated between all departments - are known for up until 2019/20, but no decisions are then made in planning for spending.

Stability

Geoff Nuttall, new Head of Policy and Public Affairs at NICVA said: “Organisations in the voluntary and community sector are struggling with trying to plan and provide activities and public services and to keep valuable experienced staff, while working on the basis of annually renewed budgets.

“They desperately need stability and longer-term funding arrangements, be they grants or contracts, for at least three years.  The current instability of government and of the funding it provides severely threatens the sector’s ability to keep providing the huge range of public benefits it does.”

But, in fact, a bit more certainty and direction would have benefits across any sector that relies, directly or indirectly, on central funding. Decisions on the fine details of spending would still have to be made but at least the resources would be there to make them.

One possible downside is that it involves a bit more work for politicians and senior civil servants, who would have to put together three-year plans, or plan outlines, annually rather than just one-year plans – to which the obvious riposte is that this is their job.

Another is that some expectations might not be met, if and when new annual budgets are published that deviate in any significant way from what went before.

That is not a weighty argument, given the travails of recent months. NGOs, the third sector, private contractors – indeed, the public generally – are well able to grasp the fact that plans can change and live with the consequences if, say, a department that they rely on financially sees major cuts that had not been projected the year before.

A bit more forward planning – as happens elsewhere – alongside a mechanism that ensures these spending plans are activated as required would have saved everyone, including the third sector, a lot of bother.