Spending rules 'ignored' amid bid to save United Airlines transatlantic flight

No business case was conducted before a planned £7m subsidy to United Airlines
No business case was conducted before a planned £7m subsidy to United Airlines

STORMONT Economy Minister Simon Hamilton ignored strict public spending rules when pressured by United Airlines to subsidise its transatlantic flight.

The executive signed-off a plan in July to gift the US airline around £7m over three years following its threat to pull the plug on the Belfast-Newark route.

The subsidy has since hit the buffers due to concerns that it breached EU state aid rules. United has said it plans to scrap the only regional air link with North America in January.

It has also emerged that the economy minister's subsidy initiative, which was waved through by the first and deputy first minister, was not supported by a business case – a fundamental requirement when spending public money.

Mr Hamilton's answer to an assembly question tabled by Green MLA Steven Agnew shows the minister by-passed civil service rules that insist an economic appraisal in such cases "is not optional".

"It is an essential part of good financial management, and it is vital to decision-making and accountability," the rules say.

"Its principles must be applied, with proportionate effort, to all spending decisions, including small expenditures."

Mr Agnew, who has previously described the executive's bid to maintain the transatlantic route as a "vanity project", said he was angered by the revelation that no business case was produced for the circa £7m subsidy – which is on top of the executive footing the bill for Air Passenger Duty on Belfast-Newark flights.

"We have already seen that the economy minister did not bother to check whether or not this subsidy would break EU state aid rules, and now we see that he did not even follow the executive’s own rules," he said.

"Guidance by the Department of Finance clearly states that an economic appraisal must be conducted in such circumstances."

The North Down MLA said it was clear by the minister's reference to the "tight timescales required by United Airlines" that the airline had put pressure on the executive.

"This is an outrageous case of the tail wagging the dog and it is clear that with this executive multinational businesses are in control, not elected representatives – if big business says jump this executive will ask ‘how high?'"

Mr Agnew called for the economy and finance minister to state whether there was an agreement to relax rules that are designed to ensure that the public’s interest is to the fore in the minds of decision-makers.

"If not, we need to know what the finance minister plans to do about this breach of the rules," he said.