Stormont talks: ‘Devil will be in the detail’ of Government’s £2.5bn package

Northern Ireland Secretary of State Chris Heaton-Harris held talks about Stormont’s dire economic situation with the five main political parties yesterday.

It subsequently emerged that the Government has offered a package, including funding for public sector pay increases — but it is dependent on the return of the power-sharing institutions.

The financial support includes:

• Funding to public sector pay rises;

• Reform of the funding model for NI;

• A stabilisation fund of the next four years to give the Executive access to additional financial support;

• Giving the Executive the power to spend money currently provided by the Government for specific NI projects to transform public services instead; and

• Extending the two-year period to pay back Stormont’s budget overspend to five years.

To benefit, the Stormont parties would have to introduce revenue-raising measures, including hiking rates by at least 15%.

For the average house in Belfast this would mean an increase of around £216 on the typical annual rates bill.

UUP leader Doug Beattie talks to health care workers protesting over pay

Stormont is on track for a £450m overspend this year, rising to around £1bn if public sector pay awards are factored in. Last year there was an overspend of £300m.

Earlier this year the NI Fiscal Council produced a report which concluded that, for every £100 per head spent on public services in England, Northern Ireland would need £124 per head to deliver the same standard of public services.

Economist Dr Esmond Birnie is a member of the NI Fiscal Council. While the council has not yet received an official breakdown of the financial package, he said it appears as though the Government has now accepted that Northern Ireland needs increased funding per head to deliver services to the same standard as in England.

“I think it is also very significant, and a good thing based on past problems, that this time around it looks like money for the transformation of the way the NI public sector works is being put into a special — hopefully strongly-ringfenced — fund,” he said.

“But overall the devil will be in the detail.”

However, DUP leader Sir Jeffrey Donaldson said the financial package being offered “falls short” of what is needed.

“We will study what the Government has said. Our initial reaction is that it falls short of what is required to enable our public services to be placed on a sustainable basis in terms of funding of those public services,” he said. “There is still some way to go in terms of both the negotiations that we have been engaged in with the Government on the Northern Ireland Protocol related issues and there is still some way to go in these discussions about the budgetary pressures.

“But we are committed to working each day to make the progress that’s required and to see Northern Ireland’s institutions restored on a sustainable and stable basis and on a basis that unionists as well as nationalists can support.”

Sinn Fein’s Michelle O’Neill, Mary-Lou McDonald and Conor Murphy arrive

Sinn Fein’s Michelle O’Neill said the financial package being offered “does not touch the surface” of what is required to have properly funded public services.

“We have a battle, but it is a battle the parties must fight together and take this right to the British Government,” she said.

“If the Executive is going to be successful then we need to have properly funded public services.”

She added: “What we now need to have is a decision to be made in terms of the restoration of the Executive.”

Alliance Party leader Naomi Long said “For us this is not about a short-term fix, it is not about dangling baubles at us before Christmas and getting everybody to rush back and say that this will be resolved immediately.”

Ulster Unionist leader Doug Beattie said he doesn’t feel the financial package will be enough in the long term.

He added: “The problem is what happens next year, the year after and it is not quite clear how we are going to deal with that. We can do the pay deals for our nurses, our teachers, our police now, but we don’t know if we’ll be able to do it in 12 months’ time.”

SDLP leader Colum Eastwood urged Sir Jeffrey Donaldson to re-enter Stormont.

“As we know there’s a huge black hole in the public finances in Northern Ireland,” he said.

“We have people behind us who are frontline workers who have to go out and strike in the cold to be paid properly. And we’ve hundreds of thousands of people — a quarter of our population — on health waiting lists.

“That’s a lot of work to be getting on with. The first thing that has to happen is that Jeffrey Donaldson has to make a decision to get back into Government.

“We want to be constructive around that, but in terms of the financial conversation, that will obviously be a conversation that the Executive parties will have to have with the Government.”

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