NI department defends joint message from top official plus Labour and SNP politicians

DoF permanent secretary Sue Gray
DoF permanent secretary Sue Gray
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Stormont’s Department of Finance has defended a letter sent jointly by its top civil servant and two left-leaning politicians, voicing strong public disagreement with the actions of government.

The message was issued in the names of Sue Gray, permanent secretary of the finance department, plus the elected politicians who head up Scotland and Wales’ own finance ministries – Scottish nationalist Derek Mackay, and Labour’s Rebecca Evans.

It was sent to Liz Truss, the Tory MP who is chief secretary to the Treasury.

The signatories said they are “deeply concerned” by aspects of planned government changes to workplace pensions for civil servants.

At the heart of their concerns is the amount of money devolved regions have got to cover an increase in pension contributions employers will have to make (see right).

Northern Ireland has effectively had no government since Martin McGuinness walked out of the role of deputy first minister in January 2017, collapsing the devolved institutions.

Instead, the day-to-day running of the Province’s public sector has been left to senior civil servants, rather than elected politicians – with the civil servants remaining politically neutral.

Asked by this newspaper about the fact that Sue Gray put her signature alongside that of two politicians in a hard hitting letter to Liz Truss (published as a press release by the Welsh government on Sunday), the Department of Finance told us: “This is a devolved matter and the letter is a factual account of the current position. The additional funding provided for changes to public service pension schemes does not fully fund the associated costs.

“Given the potential significant financial implications and what it could mean for the funding of public services, it was important Northern Ireland joined with the other devolved administrations to seek an urgent meeting to discuss this issue.”

The Northern Ireland Office was likewise asked if Secretary of State Karen Bradley had anything to say about the fact a letter from two politicians publicly attacking the conduct of the elected government was signed by a civil servant.

A spokesman said that they would not offer any comment, and suggested that the paper should go to Stormont’s Executive Office instead, since the civil service is devolved.

They also pointed the paper towards the Treasury.

Sue Gray joined the department in early 2018, having previously been head of ethics at the Cabinet Office (responsible for, among other things, carrying out the investigation into minister Damian Green’s alleged viewing of pornography on a work computer).

FULL WORDING OF THE LETTER TO TRUSS:

We remain concerned about the whole process in respect of the valuation of public service pension schemes. We would like to begin by making clear that we fundamentally disagree with the way in which additional funding for the devolved administrations has been allocated. The key issue is the level of funding does not fully fund the costs associated with the changes. This is unacceptable and inconsistent with the Statement of Funding Policy and the principles for allocating funding within the UK. Paragraph 1.17 of the Statement of Funding Policy is very clear:

where decisions taken by any of the devolved administrations or bodies under their jurisdiction have financial implications for departments or agencies of the UK government or, alternatively, decisions of UK government departments or agencies lead to additional costs for any of the devolved administrations, where other arrangements do not exist automatically to adjust for such extra costs, the body whose decision leads to the additional cost will meet that cost”.

We are also deeply concerned at the lack of transparency and engagement in relation to changes with significant public spending implications, which undermines and discredits the established UK public spending framework.

We had hoped we could have discussed this at a Finance Ministers’ Quadrilateral prior to the summer recess. While we welcome the work at official level to clarify the Statement of Funding Policy and to regularise and formalise the Finance Ministers’ Quadrilateral, this will not address the specific and immediate issues we have regarding public sector pension costs.

As we have consistently stated, we are particularly concerned about the impact on front line services delivered by public sector bodies. We have each taken steps to provide additional funding to assist with the burden of these unexpected costs.

This has reduced the funding available to invest in our own priorities and limited our flexibility to deal with in-year pressures, including Brexit preparedness. In essence, the UK government’s actions have disadvantaged the devolved administrations.

Public Sector bodies are also seeking early certainty about funding for future years to assist with their planning considerations. You indicated funding for future years would be considered as part of the Comprehensive Spending Review, and we have asked you for clarity on these plans.

Given the significant importance of this issue to all three devolved administrations, we request that an urgent meeting is arranged to allow us to meet with you to discuss the full implications of the public sector pension funding allocations. This is in full accordance with the procedures set out in the current intergovernmental Memorandum of Understanding (paragraph A3.8) in relation to financial disputes.

It is our hope that we can find a satisfactory resolution to this situation through constructive engagement. This should result in equitable funding across the UK and greater transparency and certainty going forward in regards to funding issues.

If timely progress on resolving this issue is not made, we will pursue a more formal mechanism to resolve the situation by invoking the formal dispute resolution mechanism through the Joint Ministerial Committee (paragraph A3.9 of the Memorandum of Understanding).