A DUP/Sinn Fein-backed deal to accept an emergency £100m loan from the Treasury has been branded ‘farcical’ by Alliance and the TUV.
The power-sharing Executive has voted by a majority to accept the deal offered by Chancellor George Osborne - a move which enabled the devolved administration to agree a quarterly reallocation of funds and reduce the prospect of a feared breaching of annual spending limits.
The offer to utilise the “exceptional” access to the National Reserve was opposed by the Ulster Unionists, SDLP and Alliance - who have accused the DUP and Sinn Fein of kicking the Executive’s financial problems down the road.
The £100 million loan will be subtracted from Stormont’s budget next year and ministers have still not reached an agreement to implement the UK Government’s welfare reforms in the region - an impasse that has led to an £87 million penalty from the Treasury this year, with a the sum rising to £114 million next year if progress is not made.
However, Alliance leader David Ford branded the deal “farcical” and the TUV’s Jim Allister described it as “the dearest sticking plaster in history”.
SDLP deputy leader Dolores Kelly said neither Sinn Fein or the DUP had been able to manage the budget and warned the impact on all public sector jobs “will be colossal”.
The October monitoring round deal struck will see an additional £60 million allocated to Stormont’s under-pressure health department and £29 million for the justice department to boost funding for the cash-strapped PSNI and boost the legal aid coffers.
Other notable allocations include almost £14 million to support business promotion agency Invest NI and some flagship sporting events; and an additional £1.3 million for the victims’ sector.
Earlier this month the head of the Northern Ireland Civil Service wrote to his counterpart in the Treasury warning that Stormont was on course to bust its budget as the Executive was locked in a logjam over the need to cut £220 million of in-year spending.
In a bid to avoid the doomsday scenario, DUP First Minister Peter Robinson and DUP Finance Minister Simon Hamilton approached Mr Osborne with the loan request.
The Chancellor responded positively but attached a range of conditions.
They included the requirement to implement cross-departmental cuts (with the exception of health and education) which were agreed in Stormont’s June monitoring round and a necessity to devise a Treasury-approved spending plan for 2015/16 by the end of this month.
In a letter to Mr Robinson, the Chancellor made clear that such loans were not common place.
“Access to the Reserve is only granted exceptionally,” said Mr Osborne.
“And there can be no expectation that further access will be available in future years.”
Mr Robinson and Sinn Fein Deputy First Minister Martin McGuinness issued a joint statement welcoming the agreement on October monitoring.
Mr Hamilton said: “It does have to be repaid. It is very clear from the Chancellor’s letter that he expects it to be repaid. What he also expects is that the Executive agree a balanced budget and a credible plan to deal with the difficulties we are facing, not just this year, but next year as well, and obviously that will have to address this (loan) facility as well.”
The minister responded to the criticism from the other Executive parties.
“I would rather we were standing here with agreement on the issue of welfare reform which would help to resolve a significant proportion of the problems we are facing financially,” he said.
“That unfortunately wasn’t possible, it was never going to be possible, I suspect, to do that today,” he said last night.
“But we had an immediate pressing problem in terms of difficulties within our health service, within the victims service, within job creation, within justice. We have now been able cover those pressures.”
On welfare reform, he said: “We will attempt to deal with the problem at a later stage.”
Alliance Justice Minister David Ford branded the deal “farcical”.
“While an agreement was reached between the DUP and Sinn Fein, yet again they have simply agreed to push the big decisions further down the line,” he said.
Mr Ford stressed that welfare reform had still not been addressed.
“Worst of all, they have now agreed to pile an extra £100 million debt on to next year’s budget, but no agreement to make the kind of reforms that will be needed to manage that budget,” he said.
“Rather than moving us forward, today’s farcical decision-making has put us in deeper trouble still.
“This is the kind of money management that government advises its citizens to avoid - hiding your head in the sand, refusing to accept the reality of where you are, and borrowing on one credit card to pay off another. It’s irresponsible, it’s bad government, and it will only make matters worse in the long term.”
Jim Allister, leader of the Traditional Unionist Voice, a party not represented on the Executive, said the stance of the three smaller partners in the administration highlighted the need for an official opposition at Stormont.
“This has to be the dearest sticking plaster in history - £100 million to keep an overspent failed executive limping along,” he said.
“Another £100 million to pay back on top of welfare costs. Solves nothing, but adds to the debt.
“With Alliance, UUP and SDLP opposing the deal, it’s time they followed their logic to the exit door and forced the issue of an opposition.”
Dolores Kelly asked if it is an interest-free loan and called on SF and the DUP. “We called on them to hold a budget review year on year. The DUP refused to do that.”