Call for ‘crippling’ Stormont debt to be dropped

Trade unions have called for Westminster to write off Stormont’s “crippling” budget overspend debt.

Stormont departments overspent by £300 million last year, with London allowing two years for the debt to be repaid.

It comes at the same time as budget allocations for departments which have already been described as challenging.

In a new policy document, Smart Money: Better Options For Northern Ireland’s Public Finances, the trade unions have also called for a “mechanism” to enable real transformation of public services and an overhaul of the Barnett formula which determines funding for the regions from London.

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Irish Congress of Trade Unions (ICTU) assistant general secretary Gerry Murphy said Northern Ireland’s public finances are a “mess”, a situation which needs addressing.

He said the unions have set out a “medium-term plan for ambitious investment and reforms to drive better delivery of public services for every citizen”.

“In the longer term we need a realignment of our economy to achieve fiscal sustainability,” he added.

Mr Murphy described four steps, including dropping the debt, a mechanism to enable real transformation of public services, the replacement of the Barnett formula and tax changes at Westminster.

He insisted the Stormont departments were not “irresponsible or too generous”.

“Instead of ‘super-parity’, we have a real problem with ‘sub-parity’ issues, particularly in the areas of childcare and apprenticeships,” Mr Murphy said.

“The devolution of further revenue-raising powers has been suggested as another route to help get Northern Ireland’s public finances on to a more sustainable path.

“There are no magic bullets in devolved taxation. Having power to raise or lower certain taxes carries its own risks.

“There must be no more quick fixes.”

Mr Murphy said the unions are also proposing a new transformation fund to deliver the reforms needed for the health service and other public services.

“This would be separate from the block grant and would involve Stormont departments submitting bids for specific reform projects to HM Treasury,” he said.

“Therefore this avoids making the same mistakes of previous deals where funding for long-term problems was granted on a short-term basis.

“In the medium term, NI should have a funding settlement established on a needs-based system that ensures public services match those available elsewhere in the UK.

“The part Westminster can play is outlined in ICTU’s 2020 No Going Back report, which highlighted the fact that in the UK there are significant areas of under-taxation.

“Closing these gaps would potentially make available significant amounts of money for investment in public services.”