Northern Ireland to miss out on cost-of-living payment if Stormont fails to agree budget

Northern Ireland is set to miss out on a cost-of-living payment included in an additional £270 million (319 million) for the region unless Ministers at Stormont can agree a budget, Secretary of State for Northern Ireland Chris Bryant has indicated.

The parties in the Executive have all said they have been unable to agree a budget more than halfway through this financial year due to a lack of funding.

Bryant said with Northern Ireland departments limited to 95 per cent of last year’s spend, and missing out on additional money on offer, agreeing a budget “is a no-brainer”.

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He said he would be speaking to the parties by phone on Wednesday, pressing them to agree a budget, and will meet them in person if necessary.

He suggested £270 million in adjustments to block grants for Stormont was more than he had expected. And he added that it would be an extra £131 million to spend in this financial year. This includes funding to extend a £100 cost-of-living payment to lower income households.

However, Minister for Finance John O’Dowd said a “significant gap” remains and that there is £44 million more available to the Executive when energy uplift funding is removed.

“There remains a significant gap between the funding required by the Executive to deliver frontline public services, pay our public sector workers the pay uplifts they deserve, and grow our economy than that was put on the table today by the British government,” he said.

O’Dowd said significant engagement with Westminister is required.

“I would hope that would start as early as possible because the Executive wants to and needs to be able to set a budget but to set the budget, we need the right quantum of funding to be able to do that.”

Bryant said there was “absolutely no reason” why the Executive cannot sit down and agree a budget for this year and the following years.

“I think most ordinary people in Northern Ireland are getting bored with this process, and would say they should have done it some months ago, the deadline has long passed,” he said.

“Some people kept saying to me there is bound to be more money, what we have seen today is that finances are very, very tight. We have had to use some fiscal headroom we previously allowed because of the war in the Middle East.”

Stormont Ministers have repeatedly argued that their main financial settlement from Westminster, decided through the Barnett formula, is insufficient to fund public services given the region’s relatively larger public sector workforce and political commitments to UK-wide pay parity.

Bryant clarified that in the continuing absence of an agreed budget, in addition to the 95 per cent limit, the Executive also could not access the £131 million.

Last week, DUP leader Gavin Robinson suggested a closing of the funding gap announced by British chancellor of the exchequer John Healey could give Stormont Ministers a “fighting chance” to balance its budget.

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Bryant, at that stage, said neither he nor Robinson knew what the Barnett consequentials would be.

“I certainly didn’t know it was going to be £131 million, highest expectation at that point had been something like £90 million, so when you add all of these things up, it’s a bit of a no-brainer for the Executive,” he said.

“They either limp forward through the rest of the year only able to spend 95 per cent of last year’s budget, or they sign up, they get the £500 million that we offered four weeks ago, plus the £131 million, and they have to make some tough decisions, but they get that for three years ... So they should do that.” – PA