Sean Farren: Said Budget money was not enough to pay for needs

He was speaking at a dinner for the Confederation of British Industry on Thursday.

Mr Farren said the Budget emphasised "very starkly the difficulties we have with the Barnett formula", which is used by the Treasury to determine how much the executive receives.

"What this means is that if we were to add only the Barnett share to the health budget here, the amount would be insufficient to meet the needs of the health service locally," he said.

"The chancellor has allocated enough for real improvements to services in England, which we will simply not be able to match.

"Indeed, the objective reality is that if we allocate only the additional amounts we receive under Barnett, we will struggle to maintain the health service in its present highly unsatisfactory state".

We may also have to accept that if we want better public services here we will have to pay more for them

Sean Farren Finance Minister

He said the province would need �1bn extra over the next five years than it had received in the Budget, and he would be pressing the Treasury for more money.

But he added: "We can be sure that any challenge will lead to strong pressure from the Treasury that we should pay our own way more fully.

"This will mean looking hard at the rates and at the financing of our water and sewerage services."

He said a review of the rates system was currently under way.

"But we must be under no illusions," he said.

"As private citizens we pay considerably less in local taxes than people do in England.

"While it may be unpalatable, we may also have to accept that if we want better public services here we will have to pay more for them."

However, Mr Farren said "sensitive issues" such as industrial de-rating or domestic water charging would be the subject of full public consultation.

Once the executive had agreed the range of options on which it wished to consult the public, consultation could take place, he said.

He said it was hoped that could begin next month with the aim of completing the review by October.