The below sets out the specific funding and projects in NI as part of the Spending Review and Budget announced on 27th October 2021. These form part of the Government’s wider support for “levelling up” across the UK.
NI Executive Funding:
The UK Government is providing the NI Executive with an additional £1.6bn per year on average through the Barnett formula on top of its annual baseline funding of £13.4bn. The Government has also confirmed an extra £235m for 2021-22.
Levelling Up Fund:
£49m in total for 11 projects from the first tranche of allocations from the fund:
- Upgrading the electric vehicle charging network across NI;
- Redevelopment of a derelict Ministry of Defence site in Derry/Londonderry for an urban community farm;
- A new bioscience research centre at Ulster University;
- Redevelopment of Portrush Recreation Grounds;
- Redevelopment of Dundonald Ice Bowl;
- A new business hub in the place of a former police station in Glengormley;
- Antrim’s boardwalk to be extended into the town centre;
- Regeneration of Daisyfield Community Sports Hub;
- Regeneration of Omagh Health Centre;
- Extension of cycle routes across Belfast City Centre;
- Provision of new and upgraded sports facilities in Castlederg.
In addition, the Budget and Spending Review will provide:
- £300,000 to be allocated to the Glens Digital Hub in Cushendall from the first round of the Community Ownership Fund to protect valued community assets;
- the Northern Ireland Executive with £1 billion for farmers and land managers and £9.3 million to support fisheries, over the SR announces;
- an additional £70 million funding for the British Business Bank to build on its existing programmes in Northern Ireland, working closely with local partners;
- a new, Belfast based trade and investment hub; and
- £14.9 million for the Tackling Paramilitarism Programme (TPP) over the SR, contributing to a safer Northern Ireland.
National programmes:
Northern Ireland will also benefit from its share of national programmes including:
- £5bn for Project Gigabit, rolling out gigabit capable broadband for homes and businesses across the UK;
- Over £2.6bn for the UK Shared Prosperity Fund over the Spending Review focused on helping people into jobs;
- The new Global British Investment Fund supporting investment in the life sciences, offshore wind and automotive manufacturing sectors; and
- Continuation of the Turing Scheme- enabling students from NI to go on placements and exchanges overseas.
Source: HM Treasury
NI Hospitality Sector
In the lead up to the Autumn 2021 Budget, there were calls from the UK Hospitality Sector to make the current temporary reduced rate of VAT for hospitality (currently 12.5%), permanent.
However, Rishi Sunak’s budget, yesterday, did not extend this temporary reduced rate past 31 March 2022 and, on 1 April 2022 hospitality supplies will revert to the standard rate of VAT, 20%.
The return to the 20% VAT rate on 1 April 2022 will be particularly difficult for the Hospitality Sector in Northern Ireland, given the Irish Governments announcement in their October 2021 Budget to extend their current reduced rate of VAT for the hospitality sector in Ireland (currently 9%) to 31 August 2022.
Commentators are indicating that this may lead to a challenging Summer 2022 period for NI hospitality businesses, as they are forced to compete in the ever growing Staycation market with Irish competitors able to factor a considerably lower rate of VAT into their pricing.
Talk to us today if you have any concerns or queries.