Page last updated at 16:43 GMT, Wednesday, 9 December 2009

No pre-budget cuts to NI grant

 Alistair Darling sits at his desk with a copy of his Pre-Budget Report
Alistair Darling has delivered his pre-Budget report

The Stormont finance minister has said he is relieved that the Treasury is not going to cut the block grant they give to the Northern Ireland Executive.

It had been widely suggested that the chancellor would use Wednesday's pre-budget report to cut the amount of money allocated for devolution in NI.

The chancellor also confirmed in his report that NI is to get an extra £28m.

Around £8m is to be given to Stormont departments and the rest will be spent centrally on additional state benefits.

Responding to the report, Finance Minister Sammy Wilson said "most of the measures" announced would have "little impact" on the people of Northern Ireland.

"Although some were disappointing, including the increase in National Insurance contributions from 2011-12, it was largely inevitable that only a small number of significant announcements would be made at this time given the state of public finances and the proximity to the general election", he added.

Water charges

However, Mr Wilson also said it was recognised that there was a "need to reduce" the level of government borrowing.

He explained that "further measures would be needed in order to restore public finances at the UK level to a more sustainable position".

"This will inevitably mean that we in Northern Ireland will also need to examine our approach to issues such as water charges for domestic customers as well as fundamental questions regarding which services should be provided by the Executive and how they can be most efficiently and effectively delivered," Mr Wilson said.

Each year the chancellor delivers two reports to MPs, updating them on the state of the economy and planned fiscal changes.

The pre-Budget report (PBR) takes place in the autumn with the Budget each spring.

This year's PBR is Mr Darling's third since he became chancellor in June 2007 and, with an election imminent, his most important.

You can watch BBC TWO's pre-Budget report special - together with text commentary and expert analysis and reaction on the BBC website from 1130 to 1430 GMT

Under proposals announced in Wednesday's report, Chancellor Alastair Darling has guaranteed Stormont's budget until April 2011.

Alastair McDonnell of the SDLP said the chancellor's statement has bought the Executive a bit of time and he welcomed the announcement of extra money.

'Honour commitments'

He said he was also anticipating cuts to the block grant and is relieved that the budget will remain in place .

Mr McDonnell added that he hoped any new government, be it Conservative or Labour, will honour the commitments announced in this report.

The chancellor's statement set the tone for the economic debate in the run-up to the election - which must be held by next June.

In his statement to MPs, the chancellor unveiled a 2.5% rise in the state pension from next year and a 0.5% rise in national insurance contributions from April 2011.

Public sector pay faces a squeeze, with increases restricted to 1% for two years from 2011.

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