Northern Ireland Office

The Secretary of State, Peter Hain MP, unveiled the most significant regeneration initiative for Northern Ireland in decades today.

The Investment Strategy sets out a long-term high-level view of planned investment over the next 10 years. Potentially, up to £16 billion worth of projects could be supported over the next decade.

At the same time, Mr. Hain revealed the contents of the revised Priorities & Budget. The public expenditure plans for Northern Ireland show that by 2008 total spending on regional public services here will exceed £16 billion. Over the last two years current expenditure on public services has increased by 12.6% in real terms and will have increased by a further 3.4% in real terms by 2007-08. Planned capital investment will have increased in real terms by more than 52.1% between 2002-03 and 2007-08, to around £1.3 billion annually.

By 2007-08 current expenditure on Health will have increased by more than 14% and on Education by 8%, compared to this year.

The Investment Strategy and the Budget will support each other over the coming years. Produced by the Strategic Investment Board in conjunction with Government Departments, the Strategy provides a blueprint for transforming Northern Ireland into a successful, competitive, regional economy with high quality public services.

Speaking at the recently-opened, state of the art Lisburn City Library, Mr. Hain said: “The Investment Strategy sets out the Government’s strategic plans for investment across the public sector over the next 10 years, with the priorities focused on health, education, transport and water.”

Contained within it are firm allocations for the years 2006-2008 along with indicative spending plans for future years. Mr. Hain pointed out that over the next three years alone, to the end of the current Budget period, capital expenditure would approach £4 billion:

“We are clearly signalling Government’s strong commitment to taking forward major programmes of work including education, health, and transport and, of course, those areas that fall within EU compliance. The projects identified cover almost every aspect of life in Northern Ireland.

“Future years’ spending plans will be examined and finalised in the 2007 Comprehensive Spending Review when the Investment Strategy is reviewed and updated, thereby creating a rolling programme.

“There is no doubt that the Investment Strategy is already showing real progress on the ground. A number of the projects identified are already off the drawing board. They cover almost every aspect of life in Northern Ireland, including schools, roads, water reform, hospitals, primary and community care, waste management and government accommodation.”

The details of the programme are:

• Up to £2.9 billion will be allocated to Health over the next 10 years providing a new acute hospital in the South West, a new maternity hospital in Belfast and local hospitals in Omagh, Downpatrick, Mid-Ulster and Whiteabbey. There will also be significant improvements for Altnagelvin, Craigavon, Antrim, the Royal Victoria and Ulster hospitals.
• In education some £3 billion of investment in schools over the next decade and £820m for further education will transform the education estate by ensuring that schools and colleges are fit for the purpose of providing high quality education. This will be essential to underpin key education reforms and will also be aimed at tackling the unsustainable over-capacity in the provision of school places.
• Work to bring forward two critical roads packages worth £370m for upgrading key strategic routes is at an advanced stage. A dual carriageway from Londonderry to south of Dungiven, worth some £250m, was announced yesterday and the Investment Strategy will enable development of the public transport network. The core railway network will be developed in line with the report of the Railways Review Group. Translink will be able to continue replacing its ageing bus fleet with the purchase of hundreds of new buses.
• £1.6 billion to be allocated over 10 years for vital upgrading of the water and sewerage infrastructure. The Alpha and Omega projects are now well under way and, as a result, Northern Ireland will meet and exceed EU directives on water quality and environmental standards.
• A potential for some £2 billion of investment in provision and upgrading for social housing over 10 years.

The Secretary of State said that Government also aims to maximise resources available for the Investment Strategy by releasing capital elsewhere in the public sector.

Priorities & Budget

Mr Hain pointed out that the Investment Strategy will work in tandem with the Revised Priorities & Budget, also launched today.

He emphasised that the Budget’s final shape has been determined following a public consultation process involving meetings at seven locations around Northern Ireland, presentations to MLAs at Stormont and to the political parties, and a Northern Ireland Grand Committee debate by MPs at Westminster. More than 900 written comments had also been received.

“In addition to concerns about the need for sustained investment in public sector infrastructure right across the province, many of the responses focused on the importance of investment in the future of our children and young people via the education system and in other ways. The importance of funding for the Health Service was also highlighted, as were concerns about the need for effective action to address our skills deficit.

“The consultation exercise confirmed a general desire for high quality, adequately funded public services, and delivered in the most cost-effective manner. I have concluded, therefore, that the approach I set out in October was the right one – reallocating resources from lower to higher priority areas, focusing on the reform of our public services and raising some more money locally to pay for better local services.

“I am therefore confirming today that the rates increases I proposed in October will come into effect from next April, subject to Parliamentary approval of the relevant legislation. The extra money raised will help meet the costs of the new priority funding packages I announced in October – for children and young people, for skills and science and for the environment and renewable energy.”

Mr. Hain said that some new money has been added to the Budget for these key areas:

“We have been working to draw up detailed plans for how to use the amounts allocated to these funds and I have decided to increase provision for the Children’s & Young Peoples’ Fund by £3m and £8m in the next two years, bringing the amounts allocated to this fund to £28m and £33m, to expand and enhance our response to the key issues there that need to be addressed.”

Mr. Hain said that for Skills & Science, the total allocations are £15m and £20m; and for Environment & Energy, £5m in each of the next two years. In addition the latter package is underpinned by capital investment allocations of £15m in 2006-07 and £34m in 2007-08.

Further details of the programmes and activities that will be supported by the new funding packages are to be announced early in the New Year.

The Secretary of State repeated his pledge that the arrangements announced by the Chancellor in his Pre-Budget Report to help the elderly keep warm in winter will be applied in Northern Ireland, building on the existing Warm Homes Scheme.

He also announced more money for the Health Service than had been proposed in October’s Draft Budget, reflecting concerns raised during the consultation:

“In addition to these measures, and in response to concerns raised during the consultation, I can also announce the allocation of additional funding for the Health Service of £5m and £10m. This will provide additional funding to support the opening of new facilities and to deliver improvements in elective care. It will also provide extra funding to meet the cost of additional specialist drugs, which can play a key role in the treatment of cancer and other life-threatening diseases.”

Mr. Hain said that this now brings the total increase in Health spending next year to £235m, with a further £228m added the year after, meaning that by 2007-08 total spending will be more than 14% higher than this year.

“For Education,” he continued, “I can confirm an increase in spending of more than £100m by 2007-08; a 7% increase compared to this year and £20m more than had previously been planned. On top of this there will also be extra funding for Education provided via the Children’s & Young People’s funding package. These amounts will address the most pressing needs of children and young people, including extended schools provision, strengthened child protection measures and early years provision.”

Summing up, Mr. Hain said that the overall thrust of the plans announced today was towards achieving the goal, as quickly as possible, of creating a modern, efficient, public infrastructure in Northern Ireland:

“We need to ensure that this investment programme is based on the principles of sustainable development and achieves excellence in design quality – in short, that it is fit for the 21st century. We must also use the opportunities provided by this investment programme to help address the challenges facing the new generation in Northern Ireland.

“The Investment Strategy and the Priorities & Budget together will play their part in contributing to the delivery of better public services for all the people of Northern Ireland. That investment must be accompanied by radical reform of the way that public services are managed and delivered to make them more efficient and responsive to the needs of the citizens who use them.

“It is this combination of investment and public sector reform that will ensure the delivery of public services and sustainable economic growth that meet the needs and expectations of this and future generations.”

Notes to Editors:

The £3m new Lisburn City Library at Linenhall Street is the city’s newest public amenity, having opened at the end of November.

Offering more than 2000m2 space and sited over two floors, it is one of the largest libraries in Northern Ireland and is also the only library here built as a PFI. The building also offers retail and office space.

Special features include a children’s library, IT suite, music area, youth zone and e-express, the latter being a facility for email users.

The main library facilities include comfortable seating areas for browsing, reading and study.

Full details on the Investment Strategy

Full details on the Priorities and Budget