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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 2 May 2025
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Displaying 1067 contributions

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Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

That has been managed.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

On top of that, we would have had to budget numbers earlier on to balance that budget, which was what we needed to do. That would have necessitated making more significant cuts in public services at the start of the year, in order to plan for what only became apparent through the year—which we did not know at the time would become apparent—which was the level of the public sector pay deals.

The reality is that we have not had to cut to the extent that we would have had to do in order to fund those; the cuts would have been much more significant in that sense. We have managed to fulfil those public sector pay deals, and we have done it without strikes in the health service, which has been the consequence of what happened down south.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

We said that it was broadly in line with what we expected.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

There is a slice of that. Again, not all the numbers are nailed down, but around £600 million will be for public sector pay. As I said, there is still uncertainty about the funding for the national insurance contributions, which we estimate will be around £500 million. We expect that there will be funding for that, but we are not clear how much it will be, when it will be and what it will cover.

You mention pensions contributions. The change in that was north of £300 million, and we can get the details on that. As I said, there are health consequentials coming through as part of that amount that we are committed to spend on health. It is clear that there are cost pressures there, with health inflation typically running higher than inflation across the rest of the economy. We can give you a more specific breakdown on that if you require it.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

In what sense?

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

That is absolutely not correct. Clearly, there are pressures that would build or become clearer over time, and that is the normal process. As I said at the start, because we do not have full borrowing powers, we are having to use our assumptions in order to manage within a very tight envelope.

The counterfactual is that we had assumed that public sector pay was going to be much higher. That would have meant that there would have had to be significant cuts earlier on. [Interruption.] Let me just follow through on this, because it is really important. There would have had to be significant cuts in the budget much earlier in that process. We would then have found ourselves, later in the day when the consequences had come through, in a position of being unable to spend that money in-year because of how late it was coming through. We would have had a cut in public services as a consequence of that, which was not necessary in the scenario that you are painting. I do not think that that would have been the right thing to do.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

We can either hand it back this year, in which case Mr Marra would say, “Why have you not kept it for next year?”, or we can hand it back next year, in which case, Mr Marra would say, “Why did you not spend it this year?” We are still to announce the decision.

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

You can only use it once, right? You cannot lean on it again and again—

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

We have used some of it in-year—

Finance and Public Administration Committee

Subordinate Legislation

Meeting date: 12 November 2024

Ivan McKee

Clearly, the pressure would be increased; that goes without saying. There are potentially other levers, but some of the decisions that we have had to make would have been harder. On the spend side, there would have been more pressure on the limited borrowing powers that we have, and we would have had to use those more extensively. There would have been things that, frankly, we might not have been able to do. However, as I said, it is important to recognise the context in which those decisions were taken, which was a lack of information as to the extent of the consequentials from the UK Government, although there was an understanding that there would be consequentials to some extent.