Illustrate the scale of transformation needed
is set to receive a 124% of any equivalent funding increase in England, but this will act as a fiscal ceiling, rather than a fiscal floor, as by design it fails to provide a recurring uplift to the block grant, as of April 2022 when funding for NI fell below the level of need.
This means that, when short-term financial support runs out, Executive funding will be trapped below need, possibly for decades.
The report rightly recommends that there should be a “review of the exact calculation, and assessment of the needs-based factor should be included as part of the terms of reference for the upcoming fiscal framework negotiations between the Government and Northern Ireland Executive”.
Over the next two financial years, the Government has also pledged more than £1bn in “stabilisation” funding for Northern Ireland.
It has also provided funds for public sector pay increases for this financial year.
While this may help address pressures in the immediate term, there will be an abrupt cliff edge around the corner unless action is taken.
The NI Affairs Committee’s report explores another aspect of how our public services are funded. We haven’t had a multi-year budget agreed since 2011.
The single-year budgets we have had for the past nine financial years has meant departments cannot plan in the long term and have been more reactive than proactive in their approach.
A draft three-year budget proposed for 2022-2025 was unable to be progressed due to the collapse of the Executive in February 2022.
The NI Affairs Committee’s report recommends the
Executive return to multi-year budgets following the next Government spending review.
Another recommendation in the report is that the Executive sets out its plans for public service transformation in an agreed programme for government, and that upcoming fiscal framework negotiations with the Government and Executive explore further fiscal devolution.
The report makes many sensible, albeit fairly obvious, recommendations regarding NI finances.
Whether they are heeded remains to be seen.