Finance Minister accused of being ‘in horizontal mode’ in budget crisis

Northern Ireland’s Finance Minister John O’Dowd has been accused of being in “horizontal mode” while the region remains without a budget a week before summer recess starts.

Mr O’Dowd published a draft budget in January for the 2026/27 financial year, but the Executive has not agreed on it –  insisting they need more financial support from the Treasury to plug an estimated £1 billion hole in their balance sheet and deliver spending plans that avoid dramatic cuts to public services.

All departments are currently operating within a contingency allocation.

However in the absence of a budget, ministers can only draw down 95% of the money they had spent the previous year, which the Opposition said equates to a further £1 billion cut to public services across the year.

Mr O’Dowd has spoken of being involved in negotiations with London to secure a “proper funding package” for Northern Ireland.

But he told the Assembly on Monday that timeline was now in doubt over events around the Labour leadership and Sir Keir Starmer’s resignation as Prime Minister.

With the final Assembly sitting days to take place next week, Opposition leader Matthew O’Toole said they are not on holiday yet, but Mr O’Dowd “appears to be in almost horizontal mode when it comes to the crisis”.

He said there are public services at risk this summer, and asked whether the minister accepts some services to support vulnerable people may not be able to run due to the failure of the Executive to agree a budget.

Mr O’Dowd said public services in the region had been in “various states of crisis for well over a decade”.

“Austerity has been biting and consuming our public services for well over a decades … the British Government have been treating this place with utter contempt and disrespect,” he added.

“I have engaged with, and continue to engage with the British Government on a proper funding package.”

During the clashes, Mr O’Dowd challenged Mr O’Toole to “present a united front and insist that this place is fairly funded”.

He also put to the Opposition that they had published an alternative budget.

“I published a draft budget for a number of reasons … we needed to move the process on from political engagement behind closed doors to where I published a draft budget to allow the public to have their say, and to put figures and facts on paper for analysis,” he said, adding none of his Executive colleagues could deliver on the figures.

He said he then moved to “intensive discussions” with the UK government, which he added, needs to come to an end with an offer being made.

“I am looking at all potential outcomes of this, and I have kept my Executive colleagues informed, and we will continue to scenario plan moving forward,” he added.

Earlier, the Stormont Economy Minister told a committee that her department is “now at breaking point”.

Caoimhe Archibald said she could not support the proposed draft budget due to the allocation for her department.

Ms Archibald said her department needs to be fairly funded to ensure universities and further education colleges are adequately funded, as well as Invest NI to drive economic development.

Appearing at the Stormont Economy Committee on Tuesday morning, Ms Archibald outlined the impact on her department’s budget.

She said while the resource budget for the Executive as a whole increased by 58% between the 2016/17 and 2024/25 financial years, her department’s share has increased by just 1%.

“That reflects a priority that has been given to health and education by the Executive, but it has had an impact,” she told MLAs.

“Invest NI’s resource budget has been reduced by 15%, funding to Tourism NI has remained largely static, and despite a 27% increase in funding for further education colleges, the sector has had to deliver significant operational efficiencies, including reducing staff numbers by 213 (5%) through a voluntary exit scheme in 2024.”

She said her department’s budget was “acutely impacted” by the loss of EU funding as well as what she termed cuts to the department’s baseline while the Assembly was collapsed.

“My department is now at breaking point, which is why I could not agree to the draft budget,” she said.

“It’s therefore crucial that the Executive receives additional funding, and the Fiscal Council has confirmed that we are underfunded relative to Scotland and Wales.

“It is then crucial that, as part of a final budget, my department receives a fair share of any additional funding.

“This is necessary to ensure that universities are adequately funded, that our colleges are resourced to deliver on our skills needs, that Invest NI can drive economic development, and my department can deliver against the objectives of the economic vision.”

Committee chairman Phillip Brett put to Ms Archibald that he shared her concerns on the draft budget, but said this is the first time he has heard her state she does not support the draft budget produced by her Sinn Féin party colleague Mr O’Dowd.

Ms Archibald said her department was “looking at a considerable cut” from the last budget to its allocation in the proposed three-year budget.

She said: “So the Executive as a whole took a position that the draft budget wasn’t a tenable way forward, since then we have been engaged with Treasury via the Finance Minister to try and find a more sustainable way forward.

“I think unfortunately the happenings at Westminster this week have further delayed the possibility of getting progress in the way that we had wanted.

“I think the Finance Minister thought that we were finally getting a level of engagement that might find a resolution, and I hope that it is not set back too long in terms of us being able to achieve that, because the longer we are without a budget, the more difficult the situation becomes.”