Stormont ministers to decide how to allocate unspent money

Executive ministers will meet on Tuesday to discuss how money will be allocated as part of a Stormont mini-budget.

In the context of a potential £400m overspend by Stormont this year, a monitoring round will lay out any additional money Stormont departments are in line for.

Monitoring rounds provide a system to review spending plans and are usually held three times a year, in January, June and October.

But Finance Minister John O’Dowd has decided to combine October and January into a single exercise this month.

It includes unspent funds by departments so far during this financial year, as well as new money flowing from Westminster spending decisions.

It also allows for changes in executive priorities to be reflected in additional allocations and provide flexibility to meet emerging needs.

Last month’s Budget at Westminster saw the government allocate £370m to Stormont over the next three financial years – O’Dowd later clarified that only £18.8m is available for use over the rest of this year.

The meeting comes amid outstanding funding issues in many departments – but they are most acute in health and education.

Health Minister Mike Nesbitt has already been given approval to take £100m from next year’s budget to fund a pay rise for healthcare workers in Northern Ireland.

The executive had previously committed to provide the department with up to a further £100m to make the award, but it is not clear if all of this money has been available in the monitoring round.

There have also been warnings in leaked letters from DUP Education Minister Paul Givan that he is on course to “unquestionably” overspend by about £280m this year, and could face having to make large cuts unless he gets extra funding.

Sinn Fein’s O’Dowd responded saying any overspend would “directly negatively impact front-line services” and that the “damage cannot be overstated”.

Teachers are due to be offered a pay award for 2025/26.

The executive had previously said it would set aside £37m to help with this cost but no offer has been made yet to unions.

Police Service of Northern Ireland (PSNI) staff who are due a pay award also have yet to be made an offer, but Justice Minister Naomi Long has said she believes this will happen before the end of the year.

It is understood that her department is also anticipating receiving £7m for the PSNI to cover its first year recruitment plan.

However, she is also faced with a large bill of £119m to cover the cost of compensating police officers affected by a major data breach two years ago.

It could cost about £120m and the Treasury has rejected repeated requests from the executive for help with it.

Last week, Long wrote to executive colleagues asking for support to ensure costs do not rise further.

She suggested that the executive should prioritise funding from its budget for next year (2026/27) in order to allow the PSNI to begin negotiations on a universal offer and prevent costs from rising further.

It is not clear whether all executive parties are backing this proposal, but the minister said neither her department nor the PSNI could absorb the associated costs.

However, agreement to ring-fence the money from the overall budget for next year will exacerbate pressures in the executive’s starting position for 2026/27.

Deputy First Minister Emma Little-Pengelly is expected to chair the meeting of executive ministers as First Minister Michelle O’Neill is unwell.

If parties support the allocations in the monitoring round, the finance minister is likely to make a statement in the assembly confirming the details.

The monitoring round only covers monies for the remainder of this financial year.

The focus then shifts to the process of agreeing a budget for the next financial year (2026/27).

O’Dowd has already said he hopes to bring a draft multi-year budget to the executive for approval before Christmas.

It would allow departments to plan day-to-day spending better over the next three years, however for various reasons Stormont has not implemented such a budget for more than a decade.

In the current political climate and with an assembly election scheduled for May 2027, it is possible that parties may opt to support a single-year budget.