Select Committee · Northern Ireland Affairs Committee

Funding and delivery of public services: follow up

Status: Closed Opened: 4 Dec 2024 Closed: 19 Jun 2025 4 recommendations 3 conclusions 1 report
Inquiry scopeThe Northern Ireland Affairs Committee is launching a follow-up inquiry into the funding of public services in Northern Ireland. The inquiry is looking at the challenges facing Northern Ireland’s public services (including health, education and the police) and considering: Northern Ireland’s level of need relative to the rest of the UK; the implications of the Autumn Budget for NI public services; and what measures might be included in Northern Ireland's Final Fiscal Framework, including options for raising revenue. Read our call for evidence for more detail about the inquiry and how to contribute your views

Reports

1 report

Recommendations & Conclusions

7 items
1 Conclusion 1st Report - Funding and delivery of public services: follow up

Northern Ireland's public services remain in crisis across health, education, and justice.

Conclusion · source text

Northern Ireland’s public services remain in crisis. Its health service is under immense pressure, with long waiting lists, a struggling primary care sector and an acute mental health situation, in part due to Northern Ireland’s recent history. There are severe demands on the education sector, too, with SEN pupils suffering and schools operating with large deficits. Policing and justice continue to operate under budgetary constraints, while dealing, among other things, directly with the legacy of Northern Ireland’s recent past. Other sectors are not immune to funding and service delivery problems, and all this continues to stifle Northern Ireland’s ability to invest in skills, infrastructure and grow its economy. The problems are clear. In the rest of this report, we consider some potential solutions. (Conclusion, Paragraph 21) The needs-based assessment

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Northern Ireland Executive Northern Ireland Office
2 Recommendation 1st Report - Funding and delivery of public services: follow up

Northern Ireland requires stable, needs-based funding, with potential backdating, for public services.

Recommendation · source text

Northern Ireland must be funded according to its level of need. In the short term, that means in the main by central Government. The previous Government accepted that for every £100 spent on public services in England, it costs £124 to run the equivalent services in Northern Ireland. Opinions differ on whether this 124% uplift in funding a fair and accurate assessment of Northern Ireland’s relative level of need is. There are clearly opportunities for the Executive and service providers to use their current funding more efficiently, as highlighted by the BMA, and through improved data collection. To that end, we welcome the work that Prof. Gerald Holtham is undertaking to make a new, independent assessment of need in Northern Ireland. From the evidence which we have taken, it seems clear that a figure of 124% or 127% will not make a significant difference to Northern Ireland’s public services on its own in the short term, if it is applied in future only to Barnett consequentials. To ensure that Northern Ireland is funded according to need as quickly as possible, and to avoid a potential 35 cliff edge in funding from 2026–27 when the additional one-off funding Northern Ireland received under the 2024 Executive restoration package comes to an end, there is a compelling case for backdating the 124% uplift to the start of the 2021 Spending Review period, and reflecting that in the Block Grant baseline figure for the next. Applying the figure for relative need to the Block Grant year-on-year, without Barnett consequentials, is another option. But, whatever the means, the key objective is to ensure that Northern Ireland is fully funded according to need, through stable, sustainable and predictable allocations, starting with the allocation at the next Spending Review. (Conclusion, Paragraph 40)

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Northern Ireland Executive Northern Ireland Office
3 Recommendation 1st Report - Funding and delivery of public services: follow up

Backdate Northern Ireland's assessed funding need based on Holtham's independent review.

Recommendation · source text

The Government must engage constructively with the conclusions of Prof. Gerald Holtham’s independent review of Northern Ireland’s level of need in deciding future levels of, and mechanisms for, needs-based funding. In negotiations with the Executive on the final Fiscal Framework, we urge the Government to backdate assessed need to the start of the 2021 Spending Review period, in order to include it in the Block Grant baseline figure for the next Spending Review period—or, alternatively, having acknowledged the shortfall during that Spending Review period, compensate Northern Ireland in future years. (Recommendation, Paragraph 41) Transformation and reform

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Northern Ireland Executive Northern Ireland Office
4 Recommendation 1st Report - Funding and delivery of public services: follow up

Northern Ireland needs long-term funding and integrated government for public service transformation.

Recommendation · source text

Northern Ireland must have appropriate funding now to transform its public services in the medium term. In recent years, Northern Ireland has received one-off funding packages to alleviate short-term problems. This well-intentioned resourcing has done little to help Northern Ireland plan and invest strategically for long-term public service transformation. We note, however, that the Executive has more than the ring-fenced £235 million at their disposal which they could spend on transformation, but it has failed to do so. In the case of the Executive restoration package, funding has been diverted to day-to-day spend. Despite Government reassurances, the public sector, and community and voluntary sector are still concerned about upcoming increases in National Insurance contributions. The Executive, public service providers and, most importantly, service users need longer-term funding settlements to enable better long-term planning, implementation and outcomes. With the political institutions stabilised, funding needs to follow suit. We also note some evidence which seems to demonstrate that the siloed nature of NI Executive Departments works against joined-up government and collective responsibility. The cohesion of government structure in the Executive and between the Departments in Northern Ireland will need to be enhanced in the medium-term if the funding and delivery of public services is to be more efficient and effective in the future. (Conclusion, Paragraph 61) 36

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Northern Ireland Executive Northern Ireland Office
5 Recommendation 1st Report - Funding and delivery of public services: follow up

Provide stable, sustainable, multi-year funding for Northern Ireland public services transformation.

Recommendation · source text

The Government must provide stable, sustainable, multi-year funding as part of future budget settlements, to enable the Northern Ireland Executive and service providers to plan for long-term public services transformation. (Recommendation, Paragraph 62) Raising revenue

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Northern Ireland Executive Northern Ireland Office
6 Conclusion 1st Report - Funding and delivery of public services: follow up

Northern Ireland could reduce Block Grant reliance through increased revenue raising.

Conclusion · source text

In the longer-term, one way in which Northern Ireland could reduce its reliance on the vagaries of the Block Grant, Barnett formula and short-term funding would be to raise more revenue itself. That is, of course, easier said than done. The introduction of water charges (for example) may be politically difficult, but the public elect politicians who are expected to make difficult decisions and therefore the discussion should not be avoided. Such reform may take time to implement practically—delaying any increased revenue which could be collected and spent. Further fiscal devolution, with the Executive taking control of currently centralised tax and revenue-raising levers, may offer a different way forward if Northern Ireland takes control of, and responsibility for, increased fiscal powers which enable it to broaden its tax base and generate increased revenue. That the Government and the Executive are both willing to enter into these negotiations speaks to a welcome stability in Northern Ireland’s institutions, which can only benefit the funding and delivery of public services more generally in Northern Ireland. (Conclusion, Paragraph 73)

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Northern Ireland Executive Northern Ireland Office
7 Conclusion 1st Report - Funding and delivery of public services: follow up

Agree a final Fiscal Framework including a route map for fiscal devolution.

Conclusion · source text

As a matter of urgency, the Government and Executive should agree a final Fiscal Framework which includes a route map to potential further fiscal devolution—to improve Northern Ireland’s public services and the daily lives of all the people of Northern Ireland. (Recommendation, Paragraph 74) 37

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Northern Ireland Executive Northern Ireland Office

Oral evidence sessions

3 sessions

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Date Session and witnesses Source
22 Jan 2025 Ciarán Hayes · Northern Ireland Office, Dr Caoimhe Archibald MLA · NI Department of Finance, Fleur Anderson MP · Northern Ireland Office, Joanne McBurney · NI Department of Finance, Neil Gibson · NI Department of Finance, Stephen Rusk · Northern Ireland Office View ↗
15 Jan 2025 Alex Brennan · Northern Ireland Women’s Budget Group, Ann Watt · Pivotal Public Policy Forum, Celine McStravick · Northern Ireland Council for Voluntary Action, Dr Alan Stout · British Medical Association Northern Ireland Council, Dr Graham Gault · National Association of Headteachers Northern Ireland, Pamela McCreedy · Police Service of Northern Ireland View ↗
8 Jan 2025 Dorinnia Carville · Northern Ireland Audit Office, Professor Stephen Farry · Ulster University, Sir Robert Chote · Northern Ireland Fiscal Council View ↗

Who gave evidence

15 witnesses

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WitnessOrganisationSessions
Alex Brennan · Coordinator Northern Ireland Women’s Budget Group 1
Ann Watt · Director Pivotal Public Policy Forum 1
Celine McStravick · Chief Executive Northern Ireland Council for Voluntary Action 1
Ciarán Hayes · Deputy Director Fiscal, Economy and Trade Group Northern Ireland Office 1
Dorinnia Carville · Comptroller and Auditor General Northern Ireland Audit Office 1
Dr Alan Stout · Chair British Medical Association Northern Ireland Council 1
Dr Caoimhe Archibald MLA · Minister of Finance NI Department of Finance 1
Dr Graham Gault · National Secretary National Association of Headteachers Northern Ireland 1
Fleur Anderson MP · Parliamentary Under-Secretary of State for Northern Ireland Northern Ireland Office 1
Joanne McBurney · Budget Director NI Department of Finance 1
Neil Gibson · Permanent Secretary NI Department of Finance 1
Pamela McCreedy · Chief Operating Officer Police Service of Northern Ireland 1
Professor Stephen Farry · Co-Director of the Strategic Policy Unit Ulster University 1
Sir Robert Chote · Chair Northern Ireland Fiscal Council 1
Stephen Rusk · Deputy Director Transformation, Constitution and Rights Group Northern Ireland Office 1