Political news

Questions over how benefit top-ups will be funded

First Minister Peter Robinson and Deputy First Minister Martin McGuinness unveil the latest agreement at Stormont

CONCERN has been voiced that spending on public services will have to be cut further to pay for measures in the latest Stormont agreement.

The deal includes plans to mitigate the impact of British government welfare cuts with up to £584m of 'top-up' payments for benefits claimants over the next four years.

It also has a commitment to cut the corporation tax rate to 12.5 per cent in 2018, costing the executive anything from £200m to £325m a year.

The two measures combined could leave a hole of up to £0.5bn annually in the executive's budget, which has already faced significant reductions over recent years due to cuts to the block grant.

While 'A Fresh Start' makes reference to the possibility of revenue-raising measures, it is short on detail.

The Irish News asked Stormont's two biggest parties how they planned to meet the shortfall in the budget but the DUP failed to respond.

Sinn Féin declined to outline where it envisaged cuts being made, but said it had helped secure more than half a billion pounds of "additional funding" for the executive, along with "flexibilities that can be invested in growth and public services".

It is estimated that the £585m agreed over four years to help alleviate effects of welfare reform and working tax credit cuts will translate into an average of £365 a year for each claimant – or £7 a week.

During yesterday's assembly debate on welfare, TUV leader Jim Allister asked where the money was coming from.

"One thing is clear – there is not a penny of it coming from Westminster," the North Antrim MLA said.

"It is coming off our constituents who rely for many basic services on the block grant, and the largesse of the two dominant parties is that, in order to placate and keep the benefit level artificially high, they are going to cut the cutters."

He claimed it would likely lead to cuts in education, environment and agriculture.

"So the loser in much of this will be the non-benefit claiming constituent who will find that services that he already thinks he pays richly for will be diminished to the tune of £585 million."

Green Party leader Steven Agnew said he had concerns about what would happen after four years.

"I know that no Assembly can budget ad infinitum but I worry about the timeline, because in the same agreement that proposes a top-up fund over four years, there is an agreement to cut corporation tax to 12.5 per cent," he said.

"My concern is that, when that point comes, the cost of corporation tax of up to £300m a year, which is the latest figure from the Treasury, would mean that a future executive would make the decision that that top-up for welfare would no longer be affordable."

An Alliance spokesman told The Irish News that the financial component of the deal was "unclear".

"We don’t know yet what will be the nature of the block grant over the coming years, how the budget will then be struck locally, what level of additional revenue-raising, if any, will be deployed, and what can be generated from efficiency savings or measures, including those listed in the deal itself."

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