'Mismanagement' and 'baloney': DUP and Northern Ireland Office face off over where main blame lies for budget fiasco

Steve Baker, junior minister in the Northern Ireland Office (NIO), took to the airwaves on Thursday amid renewed focus on the Province’s financial headaches, with top civil servants briefing politicians a day earlier that some departments now look set to face cuts of 10%.

He said the main issue with public spending in Northern Ireland is “not the total quantum of money – it's in the way it's spent”, adding that residents here receive much more funding per head than those in England.

The DUP meanwhile accused him of talking “baloney”, and called for a rethink on how much money the Province gets from London.

• THE BACKGROUND •

The block grant from central government is where about 95% of the money used to fund Northern Irish public services comes from, with much of the rest coming from rates.

Prior to losing his post as finance minister last October, finance minister Conor Murphy warned that Northern Ireland was on course to overspend by £660m.

And in the absence of a devolved government, the NIO then stepped in to write an updated budget for Northern Ireland.

Now that a new financial year has begun, and with little prospect of the DUP reviving Stormont any time soon, there are calls for the Tory government to take the reins once again.

The Province’s problem with public spending is not new; Sinn Fein rejected a revamp of the benefits system from 2014 to 2016, causing the Province’s budget to go unset. The party then collapsed the devolved government altogether from 2017 to 2020.

After years of Northern Ireland being unable to handle its own finances, NI secretary Chris Heaton-Harris launched a withering attack on local politicians last November, accusing them of simply “continuing the lamentable trend of storing up ever deeper trouble” by constantly failing to balance their spending.

“[NI residents get] around 21% more funding per head than equivalent UK government spending in other parts of the UK,” he said.

"Yet ministers have failed to protect the public finances and secure the delivery of public services. This is a failure of their responsibility to the public.”

• WHAT HAS UNFOLDED TODAY? •

Speaking to Radio Ulster on Thursday, Mr Heaton-Harris’ colleague Mr Baker returned to this theme, saying: “I'm saying to myself how can we find more money. I'm saying to myself that the impact on normal people who deserve better is better. Of course I am, because we're all only human.

"But I just have to say to you, with that in mind, in Northern Ireland there is about 20% more funding per head of the population than there is in the rest of the UK.

"The problem is not the total quantum of money – it's in the way it's spent. And the way it's spent is a problem.”

He also told listeners that the current overspending fiasco is “the product of many years of financial mismanagement, and also the expectation of bailouts” – in particular he cited “many years of putting off hard decisions like health reform”.

The DUP responded with a statement from East Belfast MP Gavin Robinson, who called for “a serious look” at the level of funding Northern Ireland gets.

Mr Robinson said: “The Treasury contribution to fund public services in Northern Ireland is going down rather than rising.

"As an example, in England up to 2025, spending will increase by 6% but only 3.6% in Northern Ireland.

"The cost of providing public services for a small place is more expensive than a large one. We don’t benefit from economies of scale or critical mass.

"To provide vital services, we need a disproportionately larger public service, and for as long as we receive 3% of what England needs under the Barnett formula, we won’t and don’t get enough.

"For Steve Baker to throw out statistics about spending per head demonstrates that he either doesn’t understand or else he doesn’t care.

"One way or the other, I will not stand by and allow an NIO Minister to propagate budgetary baloney as fact.

"Unless there is a total recalibration of how Northern Ireland is funded, the situation will only get worse.

"With or without an Executive, and with or without the Protocol, Barnett will only lead to our budgetary pressures getting worse.

"Public services in Northern Ireland will stall and get to a point where it is irretrievable.

"For decades Northern Ireland’s infrastructure was in stagnation and as a result it needs mammoth investment which we cannot afford yet to stand still means houses and factories struggle to get built.”

• SO WHAT EATS UP THE MOST PUBLIC CASH IN NI? •

Here is where NI's spending goes, as of the updated 2022/23 budget, set by the NIO in January:

(Figures from NI Fiscal Council)

• Health: £7.3bn (51.2%)

• Education: £2.7bn (18.5%)

• Justice: £1.2bn (8.3%)

• Communities: £853m (5.9%)

• Economy: £781m (5.4%)

• Agriculture: £584m (3.9%)

• Infrastructure: £522m (3.6%)

• Finance: £179m (1.2%)

• Exec Office: £154m (1.1%)

• "Minor Depts": £112m (0.8%)

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