Stormont budget 'to fall by £2.3bn in real terms' due to inflation

Stormont's budget between 2021 and 2024 will have fallen by over £2bn in real terms due to the impact of inflation, the Department of Finance has said.

The analysis is included in a "financial context" document published ahead of consultation on possible revenue raising measures.

The NI secretary ordered the exercise after departments overspent last year.

Consultations on specific measures, such as water charges, are expected to begin by the end of this month.

The Department of Finance has calculated what funding would have been required for day-to-day spending to keep up with the impact of inflation since 2021.

It said this shows that day-to-day spending in 2024 will be "some £2.3bn lower than these calculations would indicate is required to deliver the same level of services in 2021".

It added that "sustained high inflation has fundamentally reshaped the price of what the public pound can buy".

Stormont is not unique among the devolved administrations in this respect.

Earlier this month, the Welsh government said that, compared to what it expected two years ago, its funding this year is worth £900m less in real terms.

It is preparing to announce cuts which it says will "inevitably" hit vulnerable people.

Individual Stormont departments will launch a series of consultations over the next three months, each of which is expected to last for about 12 weeks.

Those consultations will seek views on water charges, university fees, rate reliefs and prescription charges.

Previous work by the independent Fiscal Commission suggested that a comprehensive package of revenue raising measures would bring in less than £1bn a year.

Therefore the Department of Finance is also seeking views on other measures such as service transformation, service cuts or additional sources of funding.