Source · Select Committees · Northern Ireland Affairs Committee
Recommendation 8
8
Accepted
Paragraph: 47
Clarify Government's evaluation and monitoring of NI fiscal sustainability plan implementation.
Recommendation
We are pleased to see reference to the publication and implementation of a fiscal sustainability plan as part of the settlement between the Government and Executive, which will include detail on long-term budget planning. It is noted that there is a strong view that the Government’s conditionality for writing-off Executive ‘debt’ is unacceptable and that these debts exist primarily due to the underfunding of public services. The Government should, in response to this report, clarify how it intends to evaluate and monitor the implementation of this plan given their view of the conditionality of the £559 million departmental overspend write-off.
Government Response Summary
The government clarifies that the £559 million debt will be written off if the Executive balances its 2024-25 budget and raises £113m revenue from 2025/26, with the Chief Secretary to the Treasury confirming this if conditions are met, thus outlining the monitoring of the conditionality.
Paragraph Reference:
47
Government Response
Accepted
HM Government
Accepted
The Northern Ireland Executive incurred debts of £559 million over 2022–23 and 2023–24 from reserve claims provided by the previous UK Government when there was no Executive in place. The default is that these reserve claims, which the previous UK Government provided to prevent a breach of control totals, are repayable. Debt repayment terms for the Devolved Administrations are set out in section 8.7 of the Statement of Funding Policy The 2024 Northern Ireland Executive Restoration financial package paused the repayment of these same £559 million debts subject to the publication and implementation of a Budget Sustainability Plan, including delivering a balanced 2024–25 budget and the NIE raising an additional £113m revenue from 2025/26. I greatly welcomed the Executive’s publication of the Sustainability Plan and believe this is an important step towards ensuring sustainability finances for Northern Ireland. If the Executive is able to balance its budget for 2024/25 and raise an additional £113m from 2025/26 then the Chief Secretary to the Treasury will write to the Minister of Finance confirming the debts accrued do not need to be repaid.