1. NI Executive Budget 2010 Pre-Consultation

2. Outline Background and Context UK Fiscal Position Implications for NI Budget Way Forward Key Questions

3. Background Initial consultation exercise with key stakeholders Full public consultation following publication of draft budget National 2010 Spending Review announcement –20 October 2010 Spending Review will determine spending limits for 4 years, 2011-15. Local Budget will also cover 4 years

4. How NI is funded

5. 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

6. UK Borrowing has reached unsustainable level.

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

8. UK Fiscal Position The Chancellors Emergency Budget indicated that UK departmental spending is due to decrease in cash terms. Resource Expenditure by 0.4% per annum Capital Investment by 6.9% per annum. The Office for Budget Responsibility predicts that GDP will grow by 1.2% in 2010 and 2.3% in 2011 rising to 2.9% in 2013.

9. UK PE Projections - Resource

10. UK PE Projections - Capital

11. NI Executive Departmental Spending Position 2008-11 Budget determined departmental spending plans for 2008-09 to 2010-11 financial years. Investment Strategy for Northern Ireland (ISNI) included indicative plans up to 2018 The Review of 2010-11 Spending Plans reviewed departmental spending plans for 2010-11. Resource spending totals £9.1 billion for 2010-11.* Net capital spending totals £1.4 billion for 2010-11.* * Note this excludes the spend on Policing and Justice

12. 2010-11 Current Expenditure Spending Plans by Department Note this excludes the spend on Policing and Justice

13. 2010-11 Capital Investment Spending Plans by Department Note: this excludes the spend on DARD and Policing and Justice

14. Current Priorities

15. 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. Programme for Government policy commitments. Assembly elections due in early 2011.

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

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. Key Questions What should the Executives Priorities be? How should the Executive address the funding gap? How should savings be achieved across the departments? What one thing should the Executive begin or extend?