1. NI Executive Budget 2010 BRIEFING FOR CAL COMMITTEE

2. Outline UK background and context The NI context DCAL

3. UK background Pattern of spending reviews UK borrowing Trends in public spending Public expenditure projections

4. National Spending Review Coverage 99/ 00 00/ 01 01/ 02 02/ 03 03/ 04 04/ 05 05/ 06 06/ 07 07/ 08 08/ 09 09/ 10 10/1 1 11/1 2 12/ 13 13/ 14 14/ 15 1998 CSR SR 2000 SR 2002 SR 2004 2007 CSR SR 2010

5. UK Borrowing has reached unsustainable level.

6. Significant reduction in UK public spending Source: OBR Budget Forecast June 2010 – Table C5, Table C13 and Table C16

7. UK PE Projections - Resource

8. UK PE Projections - Capital

9. Budget 2010 – NI context How NI is funded Current spending by departments Capital spending by departments Summary of budget position Options for the Executive Current priorities DCAL’s wider contribution Way forward

10. How NI is funded

11. 2010-11 Current Expenditure Spending Plans by Department Note this excludes the spend on Policing and Justice

12. 2010-11 Capital Investment Spending Plans by Department Note: this excludes the spend on DARD and Policing and Justice

13. Budget 2010 – Summary Position Real terms reduction in funding from Treasury. Inflationary cost pressures offset by: Public Sector Pay Freeze. Lower than expected construction price inflation.

14. Options for Executive Increase Income Increase Regional Rate Asset Sales Domestic Water and Sewerage Charges Additional Savings Reduce Administration Increase Efficiency Prioritise Services

15. Current Priorities

16. DCAL Contribution to the Wider Government Agenda Economy Cultural Tourism Creative Industries Health Long term impact on health Ability to combat preventable conditions Education STEM Initiatives Creative Learning Centres Social Inclusion and Equality Shared future Community cohesion

17. Way Forward Identify departmental pressures and bid for resources – End July 2010 Develop Savings Delivery Plans – July to October Ministerial Bilaterals - August Outcome of national Spending Review – 22 October Publish draft Budget & supporting documentation – End of October Public Consultation – November & December Revised Budget – End of December

18. DCAL Spending proposals Savings allocations

19. DCAL – spending proposals Current budget  Inescapable and unavoidable  Assessed for alignment with Executive priorities, impact on PSA indicators, impact on equality, good relations, poverty, social inclusion and sustainable development

20. DCAL – RESOURCE BIDS Ulster Scots Academy Electronic Libraries World Police and Fire Games Creative Industries Innovation Fund N/S Language Body Adventure Activities Licensing scheme Equal Pay impact on sponsored bodies Pay and other cost inflation

21. DCAL – CAPITAL BIDS Zero based approach 56 bids made, ranked by priority Total value £485m over 4 years Resource consequentials also bid for

22. DCAL – SAVINGS EXERCISE Planning assumptions  Flat cash settlement based on 10/11  Reducing adjustments:  Emergency budget effect on baselines  Funding for Executive policy initiatives  Unavoidable cost pressures  Constraints on access to End Year Flexibility

23. DCAL – SAVINGS EXERCISE Planning assumptions cont. Total savings requirement is pro rated across departments Resource bids are met No contribution from water charging

24. DCAL – SAVINGS EXERCISE Effect on budgets: Against an opening baseline of £109.57m –  11/12, a reduction of £5.2m  12/13, a reduction of £4.23m (£9.43m cum)  13/14, a reduction of £4.72m (£14.15m cum)  14/15, a reduction of £4.72m (£18.87 cum)

25. DCAL – SAVINGS EXERCISE Allocation of savings  Use of approximate pro rating as a first step  Differential phasing of budget reductions  North South Bodies – need for agreement

26. DCAL – SAVINGS EXERCISE Effects of proposed savings allocation  Development of savings delivery plans  Potential impacts  Mitigation of consequences – departure from pro rating  Deliverability

27. DCAL – SAVINGS EXERCISE The Committee’s views: Where should savings be made?