Jobs are likely to go and programmes are likely to be halted as Northern Ireland’s Department of Agriculture (DAERA) faces a £20 million (€22.6 million) slash in its budget within the next two years.
The figures were revealed as one of three scenarios outlined in the latest briefing on Northern Ireland’s budgetary outlook and represent the loss of more than a tenth of the department’s annual spend.
The report’s best-case scenario would see DAERA lose £10 million (€11.3 million) over the next two years while the worst would slash DAERA funding by £20 million.
Under the most extreme budget the department will see a shortfall of £63 million by 2020. It’s likely jobs will go and programmes halted as the department struggles to meet its new financial targets.
The agri-food sector has a turnover of around £4.4 billion (€5 billion) to Northern Ireland’s economy.
‘Inescapable pressures’
The report states: “The department has identified a shortlist of inescapable pressures and high-priority initiatives that require funding across the two years which total £32 million (€36 million) in 2018-19 and £48 million (€54 million) in 2019-20 (or £26 million and £42 million excluding EU Exit costs which are assumed to be separately funded).
“Payroll within the core department, combined with that within AFBI, totals £137 million (€154.6 million) or approximately 72% of the department’s total resource budget.
There would therefore be a requirement to reduce headcount which cannot be avoided when managing material budget reductions.
Three scenarios
Scenario one would see DAERA’s budget drop from £190.8 million (€215.4 million) in 2017-18 to £185 million next year – a drop of 3.1%.
The following year funding would drop to £175 million (€197.5 million) – down 8.3%. Scenario one would see the department lose out on almost £16 million (€18 million) in just two years.
Scenario two sees less of a drop and would actually see an increase in the department’s budget next year – something which hasn’t happened.
It sees more than £3 million (€3.4 million) added to DAERA’s budget next year, bringing it to £194 million (€219 million) – an increase of 1.7%, before dropping to £180 million (€203 million) in 2019-20; a 5.7% drop.
Worst-case scenario
Scenario three would be the most damaging for the department.
Like scenario one it sees DAERA’s budget drop from £190.8 million (€215.4 million) in 2017-18 to £185 million (€208.8 million) next year – a drop of 3.1%.
But a further drop of £15 million (€16.9 million) the following year takes the 2019-20 budget to £170.0 million (€191.9 million); down 10.9%.
‘Most affected by Brexit’
The department is responsible for overseeing farming, forestries, fisheries, agri-food, the environment and waste reduction.
As a result of the cuts, many of its key functions and programmes are likely to be scaled back or halted while it also deals with the challenges of leaving the EU.
The report states: “DAERA is by far the department which is most affected by EU Exit operationally. Consequently, DAERA will need to transform to prepare for day one readiness.
“In addition, post EU Exit, DAERA will need to develop and enforce a suite of agriculture, fisheries and environmental policies and regulations against a dynamic trade and regulatory landscape.
“At the same time, the department will need to continue to deliver on its Common Agriculture Policy (CAP) obligations, including the distribution of around £300 million (€338.6 million) an annum of EU funding.
“The department is working to the assumption that any Barnett Consequential funding to be allocated from HM Treasury for EU Exit will be used to meet in full any EU Exit-related costs.”
Cut backs
The department warned that under both scenario one and three key areas would have to be scaled back and, in some cases, “very significantly”.
Plans include covering the shortfall by: deferring expenditure on the TB Strategic Partnership Group recommendations; Sustainable Agricultural Land Management Strategy; and by scaling back existing rural development and environmental programmes.
These measures would still leave a residual pressure of £14 million (€15.8 million) in 2018-19 and £30 million (€33.9 million) in 2019-2020 for scenario one (£14 million and £35 million for scenario three) that would have to be funded from:
- The cessation of all Rural Affairs programmes;
- Reducing pay roll costs;
- Reducing running costs;
- Working closely with the Department of Finance to secure additional funding from monitoring rounds.
During this time, the department would also be unable to enter into any new commitments that created a liability in both 2018-19 and 2019-20.
More to follow on this story.
