Northern Ireland news

Stormont faces tough challenges as scale of financial package shortfall laid bare

(left to right) Minster for Education Peter Weir, Minster for Agriculture Edwin Poots and Minister for Finance Conor Murphy leave Stormont Castle after a meeting yesterday to discuss the British government's financial offer to support the power sharing deal 

THE Stormont executive faces a series of difficult choices in the months and years ahead as fresh figures showed the money pledged by the British government leaves significant holes in its spending plans.

As Secretary of State Julian Smith defended the New Decade New Approach financial package, describing it as the "best financial deal of any Northern Ireland talks settlement", the Department of Finance (DoF) released a breakdown of the British government's cash pledge.

According to the department, the Stormont budget for everyday spending is more than £500 million less than what it termed the "pre-austerity levels" of a decade ago.

Mr Smith told MPs at Westminster that the British government had pledged £2 billion to the restored executive – half of which he said was "new money", with the other £1 billion allocated under "Barnett-based funding".

However, DoF said £240m of the package was "undrawn" funds from the DUP's 2017 confidence and supply deal with Theresa May's minority government.

Its figures said £740m is new money linked to last week's deal to restore devolution, while highlighting that the sums are inadequate for meeting its spending requirements.

The new money equates to £152m every year, DoF said, while the regional health services needs £493m "next year alone to meet inescapable pressures, including the recent pay award".

Finance Minister Conor Murphy said the British government has reneged on it commitments and that the funding provided would not fix the problems in the health service or education sector.

Mr Smith said the key task for the executive was to "focus on its priorities".

He said the parties had agreed to publish the "fuller details of an agreed programme for government" within two weeks of the restoration of the institutions.

"This government stands ready over the coming months and years to work with the executive, we really want to support it, but £2 billion of money now is an extremely good start and I'm confident that is the basis for a strong future for Northern Ireland," he said.

The DUP's Sir Jeffrey Donaldson said his party was "concerned" that if the deal to restore the institutions was to work then "the resources need to be there in order to assure sustainability".

SDLP leader Colum Eastwood said: there was a "gap" between the British government's commitments and the financial package offered.

Meanwhile, former Ulster Unionist leader Mike Nesbitt said it was hard not to view the British government's actions on money as payback.

"Payback from the Conservative Party to the DUP for the way they treated them when they had the balance of power at Westminster and also payback from the Treasury, who I think are sick of the kind of fill-your-boots attitude that some people here demonstrate when it comes to Treasury money outside of the bloc grant," he said.

The Strangford MLA said the UUP and the other smaller parties had been excluded from the last two days of the Stormont talks and did not know what was pledged around the financial package.

"I would also encourage the five parties of the executive to stick together, to stay collegiate and to make a plan to go back and ask for more money, not with a begging bowl but to make the case that what we need to do is transformation as well as dealing with the short-term issues," he said.

Ulster University senior economist Esmond Birnie said the scale of the financial package meant a debate around revenue raising measures was now "unavoidable".

"We've been living beyond our means for a long time – it's just unfortunate that this reality check coincides with the restoration of devolution," he said.

"At the same time the public needs to be fair to politicians as I think expectations were maybe raised too far ahead of last week's agreement – it isn't the new Jerusalem that many anticipated."

Enjoy reading the Irish News?

Subscribe from just £1 for the first month to get full access