Debate on Barnett Formula funding for Northern Ireland 'gaining momentum': DUP

Ms Lockhart was commenting on Tuesday after the NI Affairs Committee at Westminster heard expert expert evidence that the current budget is creating a “difficult environment” – and that a two-year demand to repay a £300 million Stormont overspend is “over punative”.

The DUP Upper Bann MP changes to the Barnett Formula were needed.

She also said that evidence from the Chair of the NI Fiscal Council, Sir Robert Chote, was “extremely helpful” contribution to the oral hearing.

The evidence session was examining the funding and delivery of public services in Northern Ireland.

The principle of the Barnett Formula is that any increase or reduction in expenditure in England will automatically lead to a proportionate increase or reduction in resources for the devolved governments in Wales, Scotland and Northern Ireland. The formula aims to give each nation the same pounds-per-person change in funding each year.

Ms Lockhart said: “The evidence of the Fiscal Council is extremely helpful in providing a sound evidential base to both the deficiencies of the current funding formula, but also the areas in which changes could help transform outcomes for Northern Ireland. These findings are vital as we seek a review of the funding structure for Northern Ireland.“It is quite clear that our funding package is lagging other parts of the United Kingdom, and as a result our public services are suffering.”

Ms Lockhart added: “We must move to a needs-based approach. Obviously, we also have transformation of the delivery of public services very much on the agenda, and this too offers opportunity to assess how best public funding is modelled moving forward to provide the best in public services to our constituents.

"The Fiscal Council rightly point out that any change will take time. Treasury is not known for its responsiveness to change. Therefore, it is vital that the momentum that we are gathering behind this campaign continues to grow, and that commitments are made by the government to make the changes needed to finance transformation and ongoing delivery of public services. We will continue to raise this issue at Parliament to this end.”

Giving evidence to the committee of MPs, Dr Lisa Wilson of the Nevin Economic Research Institute suggested the two-year overspend timescale is designed to be a "stick" for the restoration of the effectively collapsed Executive.Ms Wilson, who is also a member of the Fiscal Commission NI, said the impact of Northern Ireland having to repay £297 million in two years will "massively impinge" on budgets in an already challenging environment.

"I think that the position that has been taken is an overly punitive one and it appears to be one that is waving a stick at the Northern Ireland Executive to get back into place," she told MPs.

"When we look at how the £297 million was spent, it wasn't spent on sweets, it was spent on basic public services.

"I firmly believe that it is overly punitive and will impact on durability in the longer term conversation of Northern Ireland's public finances to become sustainable because it's going to impinge massively this year and into next year, in a continuing environment of public spending pressures right across the UK.

"In terms of sustainability of the budget going forward... in any kind of agreement between the UK Government and the NI Executive, I think the first thing that would need to go would be this £297m to set a fair place under which the Northern Ireland Executive might be able to get back into a position, albeit with continuing spending pressures, to go forward."

Also giving evidence to MPs, Sir Robert Chote, chair of the N Fiscal Council, described a "difficult environment" for this year's budget.

He said the absence of local ministers exasperates an already difficult environment with inflation and pay pressures, describing a "perfect storm of UK-wide and NI-specific issues".

Northern Ireland Secretary Chris Heaton-Harris is setting the budget in the absence of ministers at Stormont.