Welfare stalemate ‘putting NI on brink of financial crisis’

First Minister Peter Robinson and deputy First Minister Martin McGuinness.
First Minister Peter Robinson and deputy First Minister Martin McGuinness.

Northern Ireland stands on the brink of a financial crisis if Sinn Fein continues its refusal to extend welfare reform to Northern Ireland, First Minister Peter Robinson has warned.

In comments which mark a distinct increase in the dire rhetoric coming from the DUP in recent weeks, Mr Robinson referred to “nuclear options” if there was a continuation of the current impasse over changes to benefits.

Sinn Fein has sounded increasingly entrenched in its opposition to extending the Conservative Party’s changes to Northern Ireland, and since January the Treasury has been removing £5 million a month from Stormont’s budget because of its refusal to implement the reforms.

But Mr Robinson said that would increase sharply, with £100 million to be removed from the budget in the Spring Supplementary Estimates .

He said: “The only thing that will reduce that £100 million would be if we were to start the [welfare reform] process ... the real danger is when we look at what this means year-on-year because the £100 million that we’re going to have to pay out this year goes up to £114 million next year.

“We estimate; these are the latest figures that we have from the Treasury; it will be £193 million the following year; £276 million the year after that; £343 million the year after that. So you’re talking in that five-year stretch of a billion pounds that would be lost to our expenditure.

“That is a massive amount of money and that requires you to be taking major decisions as early as possible in terms of how you reallocate funds, if you aren’t going to take this difficult decision.”

Delivering a grim financial warning, the DUP leader went on: “But that is only one part of it; that is only the impact on the block grant. But it goes well beyond that, because if we’re not having the same system as the rest of the UK, then their computer systems are moving on; they won’t be doing our work for us; we therefore have to get the hardware and the programming for the retaining of the system that we have at the present time.

“They’ve made it clear that their programme is past its life expectancy after some 25 years so that can’t even be passed to us.

“In time terms, you will not do that before 2015. That leaves you with a bit of a conundrum because if you want to continue to make payments, then they’re going to have to be done manually.

“Can anyone imagine the delays and difficulties that will be made in that process ... but also the additional cost of the people who manually are going to have to do that work?

“Now we haven’t publicly actually given the actual figure that we were given for the cost of IT. Simon [Hamilton] watered it down I have to say beyond recognition of the Executive paper that I got, indicating that it would be about a billion and a half pounds.

“It’s actually £1.8 billion.”

Mr Robinson also made clear his belief that the time for negotiation with London – as advocated by Sinn Fein – had passed.

He said: “Let us be under no doubt: this isn’t something where people can traipse off to the Northern Ireland Office or to the Treasury or to Downing Street and say ‘we want some extra money for Northern Ireland’ – it isn’t happening.

“We fool ourselves and we fool the public if we give that message out.”

On Monday, Finance Minister Simon Hamilton received a letter from the chief secretary to the Treasury, Danny Alexander.

Mr Robinson said that it was “absolutely clear ... the adjustments have been made; this isn’t something that’s going to happen at the end of the year; the process has begun”.

He added: “Every time we come to difficult decisions in Northern Ireland, people start running for the doors and searching for excuses.

“You can’t dodge these kind of decisions; they have to be taken. Otherwise, there is no point in having devolved government. You might as well leave it to people who are prepared to take those difficult decisions.”