Government urged to ‘look again’ at funding formula for Northern Ireland

The Northern Ireland Affairs Committee made the call in a new report which also specifically called for a rethink of the financial framework for the region’s police service which is currently 1,000 officers under its target force.

The report comes after a recent announcement by Government over how Northern Ireland is funded.

Alongside the Safeguarding the Union deal agreed between the DUP and Government to tackle issues around post-Brexit arrangements and restore devolved Government, a new needs-based element of funding for Northern Ireland was announced.

Northern Ireland is set to receive 124% of any equivalent increase in funding for England for the policy areas run out of Stormont, including health, policing and education.

The committee said there have been calls for this change to apply to the block grant as of 2022 as opposed to just on Barnett consequentials.

In their report the committee said it was “deeply regrettable” that the measure will “act as a fiscal ceiling”, adding that the “the exact calculation and assessment of the needs-based factor” should be reviewed in negotiations between Stormont and Westminster.

In terms of the Police Service of Northern Ireland (PSNI), the committee report said Government and the Stormont Executive should “rethink” the financial framework for the service to ensure it “has a greater variety of options in dealing with any financial difficulty”.

PSNI Chief Constable Jon Boutcher has warned of financial challenges, including the consequences around the major data leak last year.

The recently returned Stormont Executive and the Treasury remain in discussions around funding for the region.

Committee Chair Sir Robert Buckland said: “It’s been two years since public funding in Northern Ireland began to dip below need, and the decline has continued since.

“The Government’s offer will fill the void eventually, it could take a decade to reach funding equal to need again.

“We urge the Executive and the UK Government to look again at the baseline and the size of the uplift as part of the Fiscal Framework negotiations that will give this deal life.”

The committee is also calling for the Stormont Executive to set out its plan for the transformation of public services and to set up a board to implement the plan.

Sir Robert added: “Alongside the right funding, another key plank to achieving sustainable finances in Northern Ireland is finally seeing through the public services transformation agenda.

“The Bengoa report, for example, predicted the future collapse of health services in Northern Ireland eight years ago, and the changes it recommended cannot wait any longer.

“Strategic decisions to improve essential services – like health – need to be made in Stormont and we are urging politicians to make fleshing out the detail of this programme an urgent priority.

“In it lies the key to unlock the door to Northern Ireland’s prosperity and more sustainable finances.”

In a statement the Northern Ireland Office confirmed talks between the Stormont Executive and the Treasury are ongoing.

It said: “The UK Government provided Northern Ireland with almost £17 billion in 2023-24 through the block grant to run vital public services such as the NHS, education, policing and maintaining roads.

“In December 2023, The Secretary of State for Northern Ireland offered a comprehensive financial package to the Northern Ireland parties for a restored Executive.

“As with any other administration, the Executive will need to make choices to support sustainable public services, which is why as part of the significant £3.3 billion spending settlement, we have a clear condition that the Executive will set out a sustainable financial plan including revenue raising.

“As part of the financial package HM Treasury has opened discussions with the Executive on a fiscal framework. These discussions are ongoing.”