Stormont ministers ‘in live negotiation’ with Treasury over funding

Michelle O’Neill has said that Stormont ministers are in a “live negotiation” with the Treasury as politicians battle for a bigger financial package to help plug huge funding gaps.

The First Minister said that while initial conversations with the Treasury had been “positive”, the British Government has refused to backdate Stormont funding, which has left a shortfall.

Ms O’Neill said the UK Government needs to “make up” the funding gap for public services.

Stormont Finance Minister Caoimhe Archibald previously raised concerns about the UK Government’s £3.3 billion financial package for the restored Executive, saying it does not deal with public service underfunding.

It comes after the Stormont Executive agreed to raise the regional rate by 4% for the next financial year.

Ms Archibald received the agreement of Executive colleagues on Thursday for a 4% uplift in the regional element of the rates bill.

The Executive’s decision on the regional rate comes amid a demand from the UK Government for the devolved administration to raise an additional £113 million of its own revenues in the coming financial year.

A 4% increase in the regional rate would only equate to around £30 million extra in revenue.

Ms O’Neill said that in real terms the 4% hike is a “cash freeze”.

“I think it’s important that we separate out the two things. The Executive has decided that we’re going to do a 4% (rise) for domestic and non-domestic rates,” she said.

“That’s just in line with inflation. In real terms, it’s a cash freeze.

“So, it’s very, very important that we don’t burden households now who are really struggling with the cost of living, so that’s why we took the decision that we did on rates.

“I’m separating that out then from the discussion that we’re having in an ongoing way with the Treasury around how this place is funded.

“They put an offer on the table before Christmas, they did put some conditionality on it. We didn’t accept that offer.

“So, we are now in a live negotiation with the Treasury and we intend to continue to fight the battle that people here shouldn’t be punished for the fact that the Tories have underfunded us for decades.”

Ms O’Neill made the comments after visiting her former primary school, Primate Dixon in Coalisland, Co Tyrone, on Friday morning.

The Treasury has offered to write off almost £600 million of Stormont debt, conditional on the Executive raising the £113 million and producing a plan to deliver sustainable finances.

The stipulation is a key element of a £3.3 billion financial package drawn up by the Government to support the return of devolution in Northern Ireland.

Ministers in Belfast claim the settlement does not go far enough to put Northern Ireland on a stable financial footing and are pressing the Treasury to make significant changes to enhance how the region is funded.

Ms O’Neill said that for every £1 spent per person on public services in England, Northern Ireland would need £1.24 per person.

“It’s very clear that they recognise (that) themselves. They have acknowledged that but then not backdated that. So we’re left with that shortfall,” she added.

“So, they need to make that up. But that’s why we’re in that live negotiation.

“Our finance minister had an initial conversation with the Treasury. It’s been a positive and constructive conversation.

“Let’s hope that that vein continues. We intend to fight for a good funding model, one that actually represents the need, that actually allows us to invest in our health service, in places like schools like this (Primate Dixon) that do amazing work on the ground, supporting our children, but we need to be able to put the money in to support them to do what they do well.”

Ms O’Neill said that all parties in the Executive are united in calling for a better funding package.

“We need properly-funded public services here. We need a proper funding model and we need to look at that wider conversation around the tax and spending powers that we could potentially have here,” she continued.

“A lot of these things are devolved in Scotland and Wales but aren’t devolved here. So, that’s the conversation that I’m focused on with the British government.”