The upcoming “tough budget” for Northern Ireland is not a punishment for the continued collapse of the Stormont Assembly, the Secretary of State has insisted.
Chris Heaton-Harris is due to set a budget for the region in the absence of local ministers.
It has been indicated that some departments could be in line for cuts as large as 10%.
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Earlier, former finance minister and Sinn Fein MLA Conor Murphy said the UK Government had an opportunity to offset some of the deficit by spreading it over a number of years, but instead opted for a “punishment budget”.
Mr Heaton-Harris denied this, but said it will be a tough budget, pointing to a “£660 million blackhole” left by the last executive in 2022.
“When the ministers left, we, the Northern Ireland Office, worked with the civil service to try and claw back some of that black hole and diminish it, but unfortunately that’s a tough ask,” he told the BBC.
Asked whether the public should expect “eye-watering cuts”, Mr Heaton-Harris responded: “I wouldn’t say that, no, but Northern Ireland needs to live within its budget, just like England, Scotland and Wales.”
“Its budget is set by the block grant and limited revenue that it raises locally so the finite sum which is something like £14.2 billion is what is there,” he said.
“I absolutely do want the executive, who should be making these decisions about budget, to come back to make these decisions about the budget and a whole host of other things, to deliver the public services they should be delivering.
“The block grant is a good sum of money for Northern Ireland, but it needs to be spent properly.”
Mr Heaton-Harris declined to say when he would be setting the budget for Northern Ireland.
He said he has been working on it with the civil service since January to decide how the spend the £14.2 billion allocated.
“I hope to be able to set the budget fairly soon,” the Northern Ireland Secretary he added.
Earlier, the political parties entitled to seats on the Executive received a briefing on the latest position from the head of the Northern Ireland Civil Service Jayne Brady at Stormont Castle.
Mr Murphy claimed that the UK government is heading towards “the most hard, tough budget possible, which is going to do very, very significant damage”.
He also spoke of frustration at attending briefings instead of being in office, and criticised the DUP for its position refusing to participate in devolved government until its concerns around the Northern Ireland Protocol are addressed.
“It’s long past time this nonsense ended in relation to the DUP wandering around talking to themselves while the rest of us suffer the consequences of all of that,” he said.
However DUP MLA Gordon Lyons, who served as the economy minister, said the budgetary crisis is the result of a £300 million overspend and cannot be fixed by returning to the executive.
“The reality is that because of the failure to set a budget last year, there was time but the Sinn Fein finance minister failed to get support for a budget, and that meant there was a £300 million overspend last year,” he said.
“That’s now being deducted from this year’s budget and that’s what’s creating the really difficult financial situation that we find ourselves in.”
He added: “There’s a budgetary crisis but re-entering the executive in and of itself does not fix that, as I’ve set out there is a £300 million shortfall from last year.
“That’s an issue that will need to be dealt with one way or the other and it’s up to the Government to help us out with that.”
Mr Lyons also called on the UK Government for “flexibility” in repaying the overspend.
“If the Government was willing to work with us, if they were prepared to show some flexibility in terms of the repayment of that amount of money, it would make the issues that we are dealing with right now much easier to deal with, but instead we have £300 million that needs to be cut from the budget this year,” he said.
Speaking outside Stormont Castle, DUP leader Sir Jeffrey Donaldson said he hopes that cuts to public services can be avoided.
“The Northern Ireland Office needs to look again at their demand that the overspend from last year is repaid this year, normally such matters are dealt with over a longer period of time, and that would ease the pressure on Northern Ireland departments, so we will be engaging with the Secretary of State on the need to ensure that we have a budget that ensures the Northern Ireland departments are able to deliver the public services that people need here,” he said.
Deputy leader of the Alliance Party Stephen Farry said Northern Ireland is in “an extremely serious financial crisis”.
He added that without a functioning Executive civil servants are left in a “virtually impossible situation” in trying to manage departments and public services.
“From our perspective, we believe the only way through this is some form of financial package for Northern Ireland,” he said.
“We have to find something to break this vicious cycle. So, we believe the five parties should be meeting with the Government trying to hammer out some financial package for Northern Ireland.”
UUP leader Doug Beattie has said he is “depressed” by what he had heard at the briefing.
“We were talking about an indicative budget, the numbers have been given out and some departments will have to have cuts of up to 10%, and those aren’t sustainable,” he said.
“It’s quite clear that our budget is not going to be able to meet what we need in the next financial year.”
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