The Executive met yesterday, with energy costs and the draft multi-year budget the main issues on the agenda. Following the meeting, there was the first public press conference for six months, with the First and deputy First Ministers, the Communities Minister and Finance Minister taking questions from the media.
There were two big themes in the press conference. First, financial support for households’ energy costs. Second, the prospects for agreeing the multi-year budget. In both cases, a united and recurring message from all the Ministers was the need for greater financial support from the UK Government.
Energy cost support for those who need it
The Ministers announced that the Executive approved the Communities Minister’s proposal to allocate additional funding to support low-income households with home heating oil costs.
The UK Government had previously pledged £17m to the Executive to help those who need it most. With almost two-thirds of households here using home heating oil, compared to just 3% in England and Wales, Northern Ireland received a significant amount of the Government’s £53m scheme.
The Executive has agreed to provide an additional £19.2m to support over 300,000 households. Following an application process, those who are successful will receive a £100 pre-paid voucher. The application will be open to those receiving an income-based or disability benefit, state pension, or where total household income is below £30,000. The Communities Minister has said that the roll-out of this scheme will take time due to the need for legislation, organising the delivery mechanism and ensuring eligibility checks are carried out. He also said that the Executive will find the money for the scheme in light of the other pressures faced.
Calls for Westminster to “step up”
The Ministers were unanimous in calling for greater support from the UK Government to help families through this crisis. The Executive are writing to the Prime Minister, asking to meet him personally to discuss their concerns. The deputy First Minister called on the PM “to act, and to act now”.
The Secretary of State was invited to attend the Executive meeting, but could not join. However, the Finance Minister did leave the press conference early to meet with the Secretary of State individually.
During the press conference, the Northern Ireland Office announced the expansion of the British Industrial Competitiveness Scheme (BICS) to Northern Ireland. This will reduce bills by up to 25% for manufacturers and industry which will come into force from April 2027.
It was repeatedly noted that the powers to make a real difference on energy costs were not at the devolved level. The Communities Minister called on the Government to cut fuel duty and the tax on home heating oil. The First Minister stated her preference for the Executive to have “additional levers” but continued to call for greater interventions from Westminster.
The multi-year budget
More than two weeks into the new financial year, Northern Ireland is still without an agreed budget. The big message in yesterday’s press conference was that the budget is still a “work in progress”. In particular, all Ministers emphasised their view that the funding available was insufficient and that the impact of implementing it on public services would be devastating. Again, they were united in continuing to make the case to the UK Government for increased funding.
The First Minister said the decimation of public services here is a result of underfunding from Westminster, she argued, calling for “fair” treatment when it comes to public service funding. She said that the Executive was not ducking making difficult decisions, but that the starting point is inadequate funding, calling the budget realities “so challenging, so dire and so difficult”.
The deputy First Minister said that the current settlement is “woefully inadequate”, and that “punitive action” like revenue raising would not close the gap between the funding available and what statutory services require. As it stands, she said, cuts to these services would be “devastating”. She added that she wasn’t “a supporter of begging bowl politics” and that NI needed to be prepared “to do business differently” in order to make the most of the funding available, going on to talk about the need for transformation and greater efficiency in public services.
According to the Finance Minister, a further “injection of investment” from Westminster is needed to get the budget through. He added that pressures on Northern Ireland’s budget mirror similar budgetary challenges in the rest of the UK.
Pivotal’s analysis
It was good to see Ministers doing a joint press conference, given it is has been six months since the last one. Ministers presented a strong united front in their commitment to supporting households and businesses, and in their resolve to continue to make the case for more funding to the UK Government.
Greater financial support for households in light of rising energy costs is welcome, and the Executive took a wise decision to supplement the £17m provided by the UK Government for home heating oil costs. The development of a tailored scheme targeted on households with the lowest incomes is the right approach.
We do not yet know when the application window for the scheme will open, how long it will remain open, or when final decisions will be made. What is clear, however, is that this process will take some time. The Communities Minister suggested it could take up to three months to get the administration in place. By then, we would be in the height of summer, when home heating costs tend to be at their lowest. With an extremely volatile energy market, it is hard to predict what the need will be in the coming months.
It is unclear where £19m pledged will come from, given that there is no Budget agreed for this year and it’s well known that funding is extremely tight. While this support scheme is obviously a priority, the Executive should avoid making more individual announcements like this before they have agreed the overall Budget. Making spending decisions without departmental limits in place risks piling up future problems.
One issue that wasn’t mentioned yesterday was Northern Ireland’s reliance on home heating oil, which is significantly higher than other parts of the UK. This issue is part of a wider debate about the prevalence of fossil fuels, decarbonisation and increasing the affordability and use of renewable energy.
Turning to the bigger picture, yesterday’s press conference confirmed that agreement on a multi-year budget has not been reached. Ministers all said that the funding available was inadequate, adding that implementing the budget as it is would mean huge cuts to public services. Given the tight nature of the overall settlement - an increase of only about 1% in cash terms compared to 2025-26 - it is not surprising that Departments have concluded it will be impossible to manage. The Executive collectively is therefore going back again to the UK Government asking for more funding.
Pivotal’s understanding is that the outcome of the recent ‘open book exercise’ was that the Treasury told the Executive that NI was funded at its level of need, and therefore the Executive needed to manage its budget and raise revenue locally to live within the funding available. So once again it looks like we have a stand-off between Northern Ireland and the UK Government about funding, with the prospect of an agreed budget unlikely in the coming weeks. Meanwhile, Departments will be operating without collectively agreed spending limits for the new financial year. Another large overspend seems inevitable.
It is disappointing and concerning that the Executive has started a new financial year without a budget. It is a primary role of government to agree a budget and to make the choices necessary to live within the funding available. While the numbers are very tight, the Executive has known about them since last June, and Departments have been engaged with Department of Finance in the budget planning process since then. There was an eight-week consultation period that ended at the start of March. Not having an agreed budget generates serious risks of poor financial management, a lack of strategic direction, overspends, and uncertainty for business, public services and citizens.
A frustrating aspect of the political conversation in the last 24 hours is the continued request for the UK Government to resolve NI's financial difficulties. While an argument for more funding can be made, there are lots of things the Executive could and should be doing itself (which in turn of course would strengthen their case to the Treasury). There are areas where savings could be achieved across public services. Longer term transformation is long overdue. More revenue could be raised locally, especially from those with the broadest shoulders. Putting the responsibility solely onto the UK Government distracts from the fundamental responsibility of the Executive to make the most of the financial settlement it has available.
