UK funding for North is ‘woefully inadequate’ – finance minister

Britsh government had announced £2bn to put Stormont on ‘sustainable footing’

The British government is to provide a £2 billion injection of financial support to help the restored Northern Executive and Assembly begin working on a “sustainable footing”, Julian Smith, Northern  Secretary, has announced. Photograph:  Liam McBurney/PA Wire

The British government is to provide a £2 billion injection of financial support to help the restored Northern Executive and Assembly begin working on a “sustainable footing”, Julian Smith, Northern Secretary, has announced. Photograph: Liam McBurney/PA Wire

 

A pledge by the British government to provide a £2 billion injection of financial support to help the restored Northern Executive and Assembly begin working has been described as “woefully inadequate” by the Stormont finance minister.

The funding announced by the Northern Ireland Office (NIO) involves an extra £1 billion to augment the £1 billion Northern Ireland would receive under the Barnett Formula, the system by which the British treasury allocates money to it, Scotland and Wales.

Sinn Féin finance minister Conor Murphy said the funding announced was “woefully inadequate”, and that the proposed package left Northern Ireland’s public services facing “a shortfall of at least £1 billion next year alone”.

Northern secretary Julian Smith and British prime minister Boris Johnson, who visited the North on Monday, had come under criticism for failing to be specific about how much the financial support promised in the New Decade, New Approach deal would be.

The NIO on Wednesday evening said the British government was providing a “£2 billion injection of financial support” which it said would “end the nurses’ pay dispute, transform public services, turbocharge infrastructure investment and address Northern Ireland’s unique circumstances”.

The NIO statement said the “financial package will be accompanied by stringent conditions … to deliver a greater level of accountability for public spending and ensure the new Executive is building sustainable public services”.

It said a new “UK Government – Northern Ireland Executive joint board” would be established, convened by Mr Smith, to oversee implementation.

Ulster Unionist Party health minister Robin Swann announced on Tuesday that the Executive was to take £30 million from future funding to meet the £109 million required this year to settle the health workers’ industrial dispute.

Certainty

Mr Smith, however, indicated that the funding would come from London as part of the deal.

“This funding provides certainty to the Executive and ensures much-needed reforms across health, education and justice can be delivered,” he added.

The NIO said the financial package would allow the Executive to plan new investment over a five-year period.

It would involve a “rapid injection of £550 million to put the Executive’s finances on a sustainable footing, including £200 million to resolve the nurses’ pay dispute immediately and deliver pay parity over the next two years”.

Around £245 million will be provided to support the transformation of public services, including transformation across health, education and justice.

“Funding release will be tied to the delivery of reform,” said the NIO.

The British government has also made a commitment to “ringfence £60 million of capital and resource funding” to deliver a Northern Ireland Graduate Entry Medical School in Derry subject to Executive approval, with £45 million provided by the Inclusive Future Fund announced last May.

It is to provide £50 million over two years to support the rollout of ultra-low emission public transport.

Without providing detail it added that £140 million will be provided to “address Northern Ireland’s unique circumstances”.

Mr Murphy said a sum of £1 billion would have come regardless under the Barnett Formula. He said of the remaining £1 billion, £240 million was promised already as part of the confidence and supply agreement between the DUP and last UK Tory minority government.

Shortfall

“This act of bad faith makes our job much more difficult. As finance minister I cannot and will not accept this and will be taking this up with the British government.”

The NIO made clear that if the Executive wanted extra cash it could engage in its own additional revenue creation.

“The deal includes strict financial conditions such as the establishment of a new independent Fiscal Council. But it does not include any conditions about the raising of revenue by the Executive – that will be a matter for the Executive to decide on if it wants to release extra funds.”

First minister Arlene Foster and deputy first minister Michelle O’Neill had earlier written to Mr Johnson seeking assurances about the funding pledges. Stormont civil servants are preparing detailed costings for pledges the British and Irish governments made in the agreement to restore the Executive and Assembly.

The Irish Government as part of the deal also has promised to provide significant funding to assist the new Executive.