Opinion

Extra cash at Stormont can’t be an excuse to slow reform of public services - The Irish News view

NI executive needs to get real about making public services less inefficient and the private sector more vibrant

Chancellor of the Exchequer Rachel Reeves leaves 11 Downing Street, London, with her ministerial red box before delivering her Budget in the Houses of Parliament
Chancellor Rachel Reeves cranked up taxes, borrowing and spending pledges in Labour's first budget in 14 years (Jordan Pettitt/PA)

Rachel Reeves did not adopt any half-measures in her landmark budget this week, the first from a Labour chancellor after the 14 long and dismal years in which the Conservatives had their hands on the levers of the UK economy.

She has cranked up taxes - already at a 70-year high under the Tories - to the tune of £40 billion while also announcing plans to borrow an extra £100bn over the life of this parliament.

This unabashed tax, borrow and spend approach will, she says, provide the foundations for growth, better public services and a stronger economy. She hopes that any pain will be felt only in the short-term and that tangible gains will arrive in the coming years.



Labour was emphatic that it would not impose extra taxes on ‘working people’, a term that the chancellor, prime minister and Labour ministers struggled to define to an almost farcical extent. Instead, this new tax raid is aimed largely at businesses.

Yet it is businesses who employ the ‘working people’ that Labour said it would protect, and it is not credible to suggest that increasing national insurance for employers - it goes up to 15% from April - will have no effect on workers. Wages and recruitment are likely to suffer, which doesn’t sound like a recipe for growth, nor does the fact that private enterprise will feel the impact more than the public sector.

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In its analysis of the chancellor’s plans, the Office for Budget Responsibility, which offers an independent assessment of public finances, forecasts that average mortgage rates will rise from around 3.7% today to 4.5% in 2027 and that inflation will rise by 0.5%. None of that seems especially good for workers either.

Caoimhe Archibald reacts to the Budget at the Department of Finance at Clare House in Belfast
Finance minister Caoimhe Archibald said "austerity was never going to be reversed in one budget"

However, if public services actually improve as a result of Labour’s spending plans there is every chance that people, working and otherwise, may feel that on balance the Reeves approach has been worthwhile.

Previous efforts at reforming the north’s public sector and civil service have been lamentable, and there is so far little reason to think the executive will be any more successful this time

Read more: Budget: Key points for Northern Ireland from the Autumn Statement

That question of public service delivery is of huge significance in Northern Ireland. Previous efforts at reforming the north’s public sector and civil service have been lamentable, and there is so far little reason to think the executive will be any more successful this time.

The chancellor has given the executive an extra £640 million for this financial year, though even this won’t fully cover a projected overspend of £767m. For 2025-26, an extra £1.5bn is coming Stormont’s way - a significant sum, though still not enough to meet all the demands.

It makes it all the more vital that the executive properly manages the money it does have, and gets real about making public services less inefficient and the private sector more vibrant.