Government insists NI budget for next year is largest in devolution history

The £18.2bn funding to be given to Northern Ireland next year is the largest real-terms deal to the region in the history of devolution, the government has said.

The 2025/26 allocation includes an extra £1.5bn extra calculated according to the Barnett formula used to distribute money to devolved countries.

It includes £1.5 billion, £1.2 billion for day-to-day resource expenditure and £270 million for capital projects.

The manager will also receive an additional £640 million this financial year; £609 million day-to-day resource funding and around £30 million capital funding.

The added 2024/25 funding is more than officials in Belfast expected, as Stormont expects £500 million of additional funding and does not expect any significant additional capital funding for this year.

The government last month controversially paused future funding commitments for the deals while it conducts a pre-budget spending review.

The Budget also saw the Police Service of Northern Ireland receive an additional £6.5 million through the Supplemental Security Fund for 2025/26, increasing Government support through this fund to £37.8 million next year.

The Government will also continue to contribute £8 million annually to the Enforcement Program to tackle the ongoing threat posed by paramilitarism and organized crime.

The government has also provided £730,000 to support schools in Northern Ireland seeking to secure integrated status.

Northern Ireland Secretary of State Hilary Benn said: “This is the biggest real terms agreement for Northern Ireland since devolution.

“The Northern Ireland Executive will receive an additional £640 million from Barnett results this year and an additional £1.5 billion next year.

“This will provide a strong foundation for stability and growth and will see the UK Government deliver real change for the people of Northern Ireland.”

He added: “This budget is positive news for people in Northern Ireland, stimulating economic growth and providing the conditions for a brighter future.”

Stormont departments are currently over-committed to £767 million on the resource side of its budget for this financial year; therefore the additional £609 million will not fully cover the projected funding gap for 2024/25.

Ahead of the budget, Stormont finance minister Caoimhe Archibald warned his fellow ministers to ensure they do not exceed ministerial budgets this year.

He stressed that failure to balance the Stormont budget by the end of the financial year would result in the Government withdrawing its previous offer to write off £559 million worth of debt to the Treasury, saying any overspending would have “serious consequences”.

The last government’s Treasury bid to allocate £559 million was conditional on the Executive delivering a balanced budget in 2024/25.

“My initial assessment of this budget is that there are real attempts to protect public services and invest in infrastructure, but unfortunately this will not offset the damage caused by the underfunding of our public services,” he said.

“Austerity was never going to be reversed with a single budget. “The scale of current pressures is so severe that reversing the tide will take time and require significant additional investment.”

He added: “Although there was much encouragement in the initial review, the amount of money is not sufficient to meet the overspending trajectory departments have indicated for this year.

“For management, this means difficult decisions still need to be made.”

Responding to the budget, Pamela McCreedy, Chief Operating Officer of the Police Service of Northern Ireland, said:

“We welcome today’s announcement of an additional security funding increase of approximately £5 million for the Police Force and further investment in the administrative program dealing with paramilitarism and organized crime.

“We also note that the Northern Ireland Executive will receive an additional £640 million and we look forward to working with the Department of Justice on much-needed additional funding for the Police Service.”