NI budget: How did farming come off?

The budget set by Northern Ireland Secretary of State Karen Bradley has spared the region’s department of agriculture from swingeing cuts – but has the can just been kicked down the lane?

Key programmes could still be at risk as the longer term outlook for funding remains pessimistic.

The Department of Agriculture, Environment and Rural Affairs (DAERA) had originally been earmarked for up to £20 million (€22.5 million) in cuts by 2020.

The figures were revealed as one of three scenarios outlined in the latest briefing on Northern Ireland’s budgetary outlook and would have represented the loss of more than a tenth of the department’s annual spend.

DAERA’s budget

However, the budget set by Bradley last night will see DAERA’s ring-fenced expenditure set at £194.1 million (€218.3 million) as outlined in ‘scenario two’ – the least extreme of the three budgeting scenarios laid out by Bradley’s predecessor James Brokenshire.

It means a cash increase for the department of just over £3 million (€3.4 million), but in real terms once inflation is taken into account, spending value sits around the same as the year before.

However, relief could be short-lived if the full scenario is implemented as the department budget will drop to £180 million (€203 million) in 2019-20; down 5.7%.

‘Major challenges’

In a report, the department warned jobs would be lost and several key programmes stalled under all three scenarios.

It follows a year when department funding was slashed by almost £6 million (€6.7 million) – down 3% on the £198 million (€221.8 million) allocated for farming in 2016.

In a report analysing the impact of the three options, a department representative said: “All three scenarios present DAERA with major challenges. Of these, scenario two is least difficult to manage.”

What will happen now?

Scenario two will still force the department to take “far-reaching actions” including scaling back substantially on several key areas.

The report said: “Scenario two would create unfunded pressures (excluding EU exit costs) of £23 million (€25.9 million) and £53 million (€59.6 million) in 2018-19 and 2019-20, respectively.”

In order to meet these pressures, the department warned it would be required to:
  • Defer planned expenditure in respect of the TB Strategic Partnership Group, and Sustainable Agricultural Land Management Strategy;
  • Scale back existing Rural Development and Environmental programmes.

It added: “However, this would still leave a residual pressure of £5 million (€5.6 million) and £25 million (€28.1 million) that would have to be funded from:

  • The cessation of all rural affairs programmes;
  • Reducing payroll costs;
  • Reducing running costs;
  • Working closely with the Department of Finance to secure additional funding from monitoring rounds.

“Reducing payroll costs would require the implementation of various personnel interventions, including the possibility of access to central funds to fund compensation.

“This scenario would necessitate not only a significant reduction in the department’s ability to enter into new commitments across the range of its programmes, it would also severely impact its ability to deliver existing services and programmes and introduce significant additional risk into its operations as a result of the loss of staff, particularly in 2019-20.”