Northern Ireland

PLATFORM: Managing Northern Ireland’s finances is about a lot more than quarrels with the Treasury - Pivotal director Ann Watt

Labour has written to the head of the Treasury questioning whether recent communications comply with civil service and legal guidelines
The executive must take responsibility for getting the most out of Northern Ireland’s funding (Chris Ratcliffe/PA)

The Northern Ireland Executive is back, with an impressive show of unity around different policy goals.

The first full week of assembly business saw debates on making childcare more affordable, reforming the planning system and cleaning up Lough Neagh, with vocal agreement on the importance of these issues.

And, despite the £3.3bn package already in place, the major parties have also spoken with one voice about the need to secure more money from Westminster – and to reject the UK government’s demand that Northern Ireland raises an additional £113m locally.

This dispute risks being a distraction from what really matters. The executive must take responsibility for getting the most out of Northern Ireland’s funding.

MLAs should be scrutinising the spending plans for money that is available, especially given the current challenges in public services. They should be focused on the sort of long-term strategies that are the only way to genuinely improve services. They should be urging ministers to commit to public sector reform, with attention squarely placed on outcomes – and how plans will help the public in their day-to-day lives, now and in the future.

Being in government is about making choices. It isn’t possible to do everything, and it isn’t possible to fund everything. Managing public finances is at the heart of this.

Without sufficient funding, there are four basic options: reduce or stop some spending completely; save money through efficiencies or reform; raise more revenue locally; or ask the UK government for extra money.

Pivotal director Ann Watt
Pivotal director Ann Watt

At present, our politicians are sticking to tradition and putting most of their energy into asking London for more.

The requirement to generate an extra £113m locally has been roundly rejected – but £113m is less than 1% of the annual block grant. Politicians’ energy could be put to better use by making good decisions about the other 99% of the public purse.

MLAs should be asking ministers to bring forward spending plans with output targets. Longer term, we need multi-year budgets underpinning an agreed Programme for Government. MLAs need to hold ministers and civil servants to account for delivering improved public services in the real world.

The request for £113m should not distract from the executive and assembly’s more substantive work. It cannot be allowed to become an excuse for any shortcomings at Stormont.

Which is not to say that local politicians don’t have a point.

Analysis from the NI Fiscal Council on the £3.3bn package warns of a funding cliff edge in 2026-27, when some temporary allocations disappear. While the new ‘fiscal floor’ is welcome, its effects grow over time and Northern Ireland’s funding will still remain below the relative level of need for several years.

So discussions about the financial package and a new fiscal framework should carry on, but they cannot be the whole story. We need an open and honest local debate about funding public services.

There is a desperate need for more investment in infrastructure, health waiting lists and Special Educational Needs, to name just three areas. The Northern Ireland public would perhaps be willing to pay more if it meant public services that actually provide what they need. Local taxation should not be ruled out without discussion.

Households here pay hundreds of pounds less per year domestic rates than our counterparts in England, Scotland and Wales pay into council taxes and water charges. If Northern Ireland wants more funding from Westminster, it might need to show some willingness to contribute more itself. If local politicians want more cash from the Treasury, it might do them no harm to indicate they can manage public finances with maturity.

Obviously it is very tough to have these conversations now, when public services are in such a bad state. Which brings us back to ministers, and the Executive, and the need to focus on outcomes.

Our services will not improve without investment – but good investment isn’t just about having more money, it’s also about spending it well.