Source · Select Committees · Northern Ireland Affairs Committee
Recommendation 6
6
Accepted
Northern Ireland could reduce Block Grant reliance through increased revenue raising.
Conclusion
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)
Government Response Summary
The government has agreed with the Northern Ireland Executive to immediately begin negotiations on a full Fiscal Framework, including discussions on Northern Ireland Housing Executive borrowing and the Holtham Review, aiming for long-term financial sustainability.
Government Response
Accepted
HM Government
Accepted
The previous UK Government agreed an interim Fiscal Framework with the Northern Ireland Executive to ensure the long-term sustainability and health of Northern Ireland’s public finances. Alongside the Spending Review, the UK Government has published the methodology for calculating Northern Ireland Executive relative funding. This has been jointly agreed with the Northern Ireland Executive. The UK Government and Northern Ireland Executive have also agreed to immediately begin negotiations on a full Northern Ireland Executive Fiscal Framework. The scope of negotiations will include Northern Ireland Housing Executive borrowing and the Holtham Review of Northern Ireland’s relative need, also published at the Spending Review.