Treasury offers Stormont £2bn – but is wary of its past profligacy

Arlene Foster and Michelle O'Neill meeting with Boris Johnson and Leo Varadkar on Monday
Arlene Foster and Michelle O'Neill meeting with Boris Johnson and Leo Varadkar on Monday
Share this article

The new Executive is being offered about £2 billion by the Treasury, the News Letter has been told – but is facing a sceptical hearing in London because of Stormont’s past behaviour.

One senior source, backed up by another well-placed source, said that the government’s offer would involve roughly £1 billion of ‘new money’ and £1 billion of money which Northern Ireland would have received anyway because it is a share of increased public expenditure in England.

The Sinn Fein Finance Minister, Conor Murphy, has rejected the offer – which he and the other Executive parties were given on Monday evening – as something which “falls way short” of what was expected.

However, one source familiar with what is going on said that there was no mood within Whitehall to expand on the offer.

The news came as Health Minister Robin Swann yesterday announced that he will move to reinstate pay parity between Northern Ireland’s health staff and their counterparts in England.

That figure involved what is understood to have been an ‘advance’ from the Treasury on the package which will be formally delivered as part of last week’s agreement to restore devolution.

However, the long shadow of the RHI scandal is now undermining Stormont’s efforts to extract more money from London.

The gross incompetence which RHI exposed within the Stormont system and the grasping culture of ‘free money’ if it was being funded by the Treasury shocked some senior Whitehall figures who have been paying attention to the evidence gathered by Sir Patrick Coghlin’s public inquiry.

The government is now moving to give itself influence over, and oversight of, Stormont spending.

Deep into the New Decade, New Approach deal is a section in which it is made clear that Stormont will face more questions from London as to how money is being spent.

Some of those questions will come from a new and independent ‘fiscal council’ which has to be established by July under the deal and whose membership will have to be agreed with the government.

That body will publish an annual assessment of the Executive’s revenue streams and spending proposals “and how these allow the Executive to balance their budget”, alongside “a further annual report on the sustainability of the Executive’s public finances” which must include “the implications of spending policy and the effectiveness of long-term efficiency measures”.

Referring explicitly to the cash for ash scandal, the deal says: “The UK government will carefully review the findings of the RHI Inquiry report, and consider its implications for the use of public money in Northern Ireland, accountability, and the wider responsibility of the UK government to consider the public interest in good governance and public administration.”

The deal involves the creation of a second significant body which will oversee elements of Stormont’s spending.

The ‘UK Government-NI Executive Joint Board’ on which Arlene Foster, Michelle O’Neill and the secretary of state will sit will meet quarterly to review Treasury funding provided under the agreement “and implementation of all agreements”.

The deal document states that the joint board “would have as part of its Terms of Reference in particular the oversight of transformation efforts in health, education and justice where these would draw on funding under this agreement”, a clause which appears to dilute what in the past was Stormont’s complete devolved autonomy over how it governed in those areas.

Finance Minister Conor Murphy said that the issue of funding for the deal “is not over, and we intend to pursue that over the course of the next number of days and into the next week”. He said the Executive needed to be not just “politically sustainable” but also “financially sustainable”.

Arlene Foster and Michelle O’Neill have presented an upbeat tone, laughing and joking in public yesterday and attempting to persuade voters that they have put behind them the rancour of recent years.

Mrs Foster said: “We are energised and resolute in moving forward together for the benefit of all of the people of Northern Ireland.

“There are significant challenges ahead of us, but equally we have a real opportunity.

“With strong leadership and collegiate working we will make sure that our public services are transformed.

“Through this new five-party Executive based on mutual respect and trust, we can rebuild confidence in the Executive.

“We will do this by delivering on the things that matter to people in Northern Ireland, together.”

Ms O’Neill said: “There is a collective will among all parties in the Executive to transform our public services and deliver the improvements that are desperately needed.

“This won’t happen overnight. It will need a coordinated, sustained approach to bring lasting, positive change for all the people of the north.

“Our immediate priorities will include dealing with the issues impacting the most vulnerable.

“The extension of welfare reform mitigations, a plan to tackle waiting lists and the urgent publication of a Mental Health Action Plan will be among those pressing actions.”

However, days after it emerged that the new Assembly will have less internal scrutiny than at the time when Stormont fell in 2017, the five main parties have taken every one of the chairmanships of the Assembly committees which examine what departments are doing.

In a move which means that the Executive parties are in charge of scrutinising their own Executive, the DUP, Sinn Fein, SDLP, UUP and Alliance – which because of their size have the right to a number of committee chairs, based on their number of MLAs – took all the positions yesterday.

The powerful Public Accounts Committee – the body which under its then UUP chairman Robin Swann played an important role in investigating and revealing elements of the RHI scandal – will now be chaired by DUP MLA William Humphrey after Arlene Foster used her first pick of the positions to secure the role for the DUP.

The chairmen of the departmental scrutiny committees were selected as follows:

lAgriculture/Environment: Declan McAleer, SF;

l Communities: Paula Bradley, DUP;

l Economy: Caoimhe Archibald, SF;

l Education: Chris Lyttle, Alliance;

l The Executive Office: Colin McGrath, SDLP;

l Finance, Steve Aiken: UUP;

l Health, Colm Gildernew: SF;

lInfrastructure: Michelle McIlveen, DUP;

l Justice: Paul Givan, DUP.

The DUP and Sinn Fein will also chair important standing committees of the Assembly. Sinn Fein’s Sinéad Ennis will chair the Standards and Privileges committee which polices MLA conduct and the DUP’s Mervyn Storey will chair the Assembly and Executive Review Committee.