'No more money' from Treasury to address Stormont's £1 billion funding crisis

"Northern Ireland doesn't have any more money coming" to address a £1 billion public sector finance crisis, a senior civil servant has said.

Neil Gibson, who is running the Department of Finance in absence of a sitting executive minister, said Jeremy Hunt’s Autumn Statement confirmed what Stormont’s civil servants already knew – that Stormont's departments won't have any more cash coming from the Treasury to meet "its very significant financial pressures".

Those departments are sitting on a budget deficit of around £297m from the last financial year.

Mr Gibson said the financial pressure in the current year from things such as pay deals and front-line services amounts to around £1bn.

The Autumn Statement produced £185m in new funding for the north, but the permanent secretary said around £75m would immediately be used to address the overspend.

The decision on how the remaining £110m is allocated is expected to be made early next year.

Read more:

  • What does the Autumn Statement mean for Northern Ireland?
  • Richard Ramsey: Underwhelming autumn statement shapes battlefield for general election
  • Autumn statement - what business leaders think

“One billion pounds of pressure is enough to keep any permanent secretary awake at night, but it's actually the longer term pressure that remains perhaps our biggest concern, as we think about the long term financial sustainability,” he added.

The former economist, who was appointed as the Department of Finance’s most senior civil servant in February 2022, said it was too late in the financial year to make significant reductions in services or radical changes in policy.

Mr Gibson said there is a strong case for Northern Ireland to negotiate a ‘fiscal floor’ arrangement, similar to Wales, which effectively guarantees a level of funding.

“I and many of my colleagues would very strongly be making the case that there is an argument to suggest that Northern Ireland is running at the level of funding below its objective need.”

He said in that scenario, Stormont’s departments would not have overspent last year and its current pressures would be lower.

If such a financial framework as adopted retrospectively, it could in theory see part of the overspend written off.

“If we're to talk about long term funding gap, it's not going to be done from a burning platform,” said Mr Gibson.

“We're gonna have to do that from a stable position, and therefore that might need a level of investment.

“So there's a lot to be negotiated for. But there is certainly I believe quite a strong argument to be made.

“Getting a basic level of need, a floor if you will, to the funding position should be our first non-negotiable position.”