Northern Ireland

Treasury plan for Stormont to raise £113m will harm families in Northern Ireland – Archibald

The stipulation is a key element of a £3.3 billion financial package drawn up by the Government to support the return of devolution in NI.

Stormont Finance Minister Caoimhe Archibald spoke out against the move
Caoimhe Archibald Stormont Finance Minister Caoimhe Archibald spoke out against the move (Liam McBurney/PA)

A Government plan for Stormont’s new powersharing executive to raise £113 million in additional funds over the next year will cause “harm to hard-pressed families, households and businesses”, Finance Minister Caoimhe Archibald has said.

The Treasury has offered to write off almost £600 million of Stormont debt, conditional on the executive raising the amount and producing a plan to deliver sustainable finances.

The stipulation is a key element of a £3.3 billion financial package drawn up by the Government to support the return of devolution in Northern Ireland.



Chief Secretary to the Treasury Laura Trott confirmed details of the settlement in a letter to Ms Archibald on Tuesday.

But the new Finance Minister responded to Ms Trott, stating that she has “serious concerns” over the details published by the Treasury and has asked for an urgent meeting.

The Government described it as a “significant, fair and generous” package.

But Ms Archibald said: “Ministers are united and speak with one voice in the need to invest and reform our public services.

“Making the write-off of the £559 million for debt repayment conditional on the publication and implementation of a sustainability plan is not acceptable.

Cartoon showing members of the Stormont executive standing around a large heart with £113m? written on it
Ian Knox cartoon 14/2/24

“It is our strong view that these debts exist primarily due to the underfunding of public services.

“The executive has already given a commitment to the British Government to develop a sustainability plan with a pre-requisite that the right level of funding is provided.

“The Government’s timescale requiring this to be published by May 2024 is completely unrealistic.

“It is essential that the executive is afforded adequate time to give proper consideration to this important matter.”

She added: “To expect this funding to be generated in such a short space of time can only serve to cause more harm to hard-pressed families, households and businesses.

“Our message to Westminster is simple.

“The executive should be given time and space to develop and agree a properly thought-through sustainability plan that will put our finances on a more stabilised footing.”

The Stormont executive currently raises around £1.65 billion a year
Stormont The Stormont executive currently raises around £1.65 billion a year

The Government said the financial settlement included a requirement for the executive to deliver a balanced budget for 2024/25 that includes a minimum of £113 million raised through locally generated income.

The £113 million equates to a 15% rise on the portion of household rates bills that is set by the executive.

The executive currently raises around £1.65 billion a year through rates and other revenue-raising forms.

Rates bills are calculated by adding the regional rate (set by the executive) to the district rate (set by local councils) and multiplying that by individual property values.

While the Government believes a rate rise would be the simplest way to raise the £113 million – as the rates billing system is already established – it is not opposed to executive ministers opting to generate the revenue by other means.

However, it has made clear that its offer to write off a £559 million debt accrued due to overspends of Stormont budgets during the two-year Stormont impasse is conditional on ministers producing, by May this year, a sustainability plan that includes revenue raising measures and efficiency initiatives.

The broad shape of the financial package was already known after it was hammered out in negotiations between the local parties and the Government at Hillsborough Castle before Christmas when powersharing was still in cold storage.

The £113 million revenue raising ask was put to the parties during those negotiations.

Details on the financial package outlined in the letter to Ms Archibald include:

– Reform of the Barnett formula for allocating Treasury funds to Northern Ireland, with funding rates for the region set at 24% above comparative rates in England. The Government said this would reflect the “different levels of need in Northern Ireland”.

– A £1 billion fund to stabilise Stormont’s public finances.

– £34 million to tackle spiralling hospital waiting lists.

– The conditional write-off of a multimillion-pound overspend of Treasury funding during the powersharing impasse.

– £584 million to help meet public sector pay demands in the current financial year.

– Boosting the executive’s spending powers to transform public services by repurposing in excess of £700 million of existing and new UK Government funds.

– Increase the executive’s annual capital borrowing limit by 10% in 2024/25, a limit which will then increase annually in line with inflation.

Deputy First Minister Emma Little-Pengelly also raised concern over the impact of new charges on hard-pressed families
Stormont Assembly Deputy First Minister Emma Little-Pengelly also raised concern over the impact of new charges on hard-pressed families (Oliver McVeigh/PA)

The Government said it has also committed to open discussions with the executive on a “new fiscal framework” for Northern Ireland.

Northern Ireland Secretary Chris Heaton-Harris welcomed confirmation of the settlement’s details.

“This package tackles the immediate budget pressures facing the restored executive and allows it to take action to rapidly stabilise public services, while increasing opportunities for investment and improved infrastructure,” he said.

“It also paves the way for vital transformation of public services, and will deliver well-deserved pay awards for public sector workers.

“It is now for the Northern Ireland executive to use this significant financial package to take forward the vital work of public service transformation and the commitment to deliver sustainable finances – ensuring better outcomes in the day-to-day lives of the people in Northern Ireland.”

The letter comes after Stormont leaders voiced concern about introducing new revenue raising measures in the region.

First Minister Michelle O’Neill and deputy First Minister Emma Little-Pengelly have both highlighted the likely negative impact of new or hiked charges on hard-pressed families in the region.