Source · Select Committees · Northern Ireland Affairs Committee
Third Report - The funding and delivery of public services in Northern Ireland
Northern Ireland Affairs Committee
HC 46
Published 26 March 2024
Recommendations
1
Deferred
Para 21
Introduce statutory duty for NI Department of Health to publish workforce projections.
Recommendation
We are concerned about staff recruitment and retention in the health service, with thousands of empty posts and a reliance on costly agency staff. The equivalent of 26.3% of the Northern Ireland population are on waiting lists, with some going …
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Government Response Summary
The government details substantial past and future financial packages for the NI Executive and states that discussions on the next phase of the fiscal framework are commencing. Regarding a statutory duty on the Department of Health to publish workforce projections, the government states this is a devolved matter for which the Department of Health is responsible.
Northern Ireland Office
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2
Deferred
Para 25
Require Northern Ireland Executive to prioritise SEN pupil numbers in education funding allocation.
Recommendation
After years of under-investment, the education sector has been struggling to fulfil its statutory duties. Spending per pupil has been consistently lower in Northern Ireland than in England. We are particularly concerned about the future of provision for children and …
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Government Response Summary
The UK Government's response did not address the recommendation for the Northern Ireland Executive to account for increasing SEN pupil numbers in education funding, instead quoting a different recommendation without providing a specific reply.
Northern Ireland Office
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3
Deferred
Para 29
Mandate Treasury, NIO, and NI Executive to review PSNI's financial framework.
Recommendation
Cuts in police officer numbers due to recent budgetary pressures will impact on the PSNI’s visibility and ability to respond to increased demand. Officer numbers have dropped some way below the 7,500 committed to under the New Decade, New Approach …
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Government Response Summary
The government recognises the PSNI's difficult financial position but states that policing is a devolved matter for the Northern Ireland Justice Minister to determine funding allocation. While detailing significant financial packages to the NI Executive and specific additional security funding, it states the Justice Minister and PSNI can raise concerns regarding funding with HM Treasury during Spending Review discussions, but does not commit to a specific rethink of the PSNI’s financial framework.
Northern Ireland Office
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4
Deferred
Para 35
Require Northern Ireland Executive to consider VCSE sector's contribution in future budgetary decisions.
Recommendation
The voluntary, community and social enterprise sector has struggled in the recent funding environment, and this is likely to have piled further pressure onto stretched public services. When making future budgetary decisions the Northern Ireland Executive must take account of …
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Government Response Summary
The government recognises the significant contribution of the voluntary, community, and social enterprise sector, but states that budgetary decisions regarding the sector are a devolved matter for the Northern Ireland Executive.
Northern Ireland Office
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5
Accepted
Para 36
Publish future UK Shared Prosperity Fund allocation scope for NI public bodies.
Recommendation
The delivery and timing of the UK Shared Prosperity Fund (UKSPF) caused considerable distress and uncertainty in the sector, particularly the decision to communicate the outcome of applications on the day European Social Funding ceased. The Government has announced that …
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Government Response Summary
The government has announced that the UK Shared Prosperity Fund will be extended for 2025-26 at a reduced level of £900 million. Regional, nation-level, and local allocations will be confirmed and published on gov.uk as soon as possible.
Northern Ireland Office
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6
Not Addressed
Mandate Government to assess public service funding implications from 2026/27 cliff-edge.
Recommendation
Northern Ireland’s public services, especially in the health, education and justice sectors, are in a poor state after years of political instability, lack of funding and of reform. The additional £520 million per year promised by the Government in 2024/25 …
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Government Response Summary
The government states that budgets for 2026-27 onwards are based on projections and confirms the Executive can plan on being funded at or above 124% of their relative need. It provides general information on the fiscal framework but does not explicitly set out an assessment of the implications of the expected funding drop or the rationale for its two-year stabilisation funding decision as requested.
Northern Ireland Office
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7
Accepted
Para 46
Mandate Northern Ireland Executive to commit to multi-year budgetary settlements for public services.
Recommendation
Single-year budgets and a lack of an agreed Programme for Government have not allowed for long-term thinking and planning for public services and spending in Northern Ireland over recent years. We urge the Executive to commit to returning to multi-year …
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Government Response Summary
The government commits to multi-year spending reviews every two years, starting Spring 2025, and expects the Northern Ireland Executive to return to multi-year budgets following this. It also clarifies that the NIE can already carry forward underspends via the Budget Exchange system, and reiterates commitment to ongoing Fiscal Framework discussions.
Northern Ireland Office
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8
Accepted
Para 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 …
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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.
Northern Ireland Office
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10
Not Addressed
Para 56
Require Treasury to provide guidance on building investment cases for NI funding bids.
Recommendation
Northern Ireland would benefit from being more entrepreneurial in how it bids for funding for public service reform - for example, by linking its bids into wider Government agendas and aims including cross-Departmental working, partnership with the business community and …
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Government Response Summary
The government provided £235 million for public service transformation and notes the NI Executive has established a Public Sector Transformation Board and published its Programme for Government. However, the response does not address the specific recommendation for the Treasury to provide guidance on building investment cases for funding bids.
Northern Ireland Office
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13
Accepted in Part
Include review of needs-based Barnett factor calculation in Fiscal Framework negotiations terms of reference.
Recommendation
We endorse calls for a review of the fiscal framework for Northern Ireland and welcome the willingness of the Government to open negotiations with the Executive in this regard. However it is deeply regrettable, because of the failure to baseline …
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Government Response Summary
The government commits to taking forward discussions towards a full fiscal framework and will consider a review of the relative needs-based factor if multiple independent and credible sources provide evidence that the current assessment is different. This falls short of including the review as an automatic part of the terms of reference.
Northern Ireland Office
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14
Acknowledged
Para 85
Consider lower income households' needs when Northern Ireland Executive examines revenue-raising options for public services.
Recommendation
We note that there have been calls that any consideration given by the Northern Ireland Executive to revenue raising should only take place once UK Government funding at levels equal to or above assessed need has been restored. The Northern …
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Government Response Summary
The government commits to implementing corporation tax devolution via a Joint Exchequer Committee and notes ongoing discussions for the next phase of the fiscal framework. It states the NI Executive needs to make difficult decisions on revenue-raising to ensure financial sustainability, but does not explicitly state how lower income households will be considered.
Northern Ireland Office
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15
Deferred
Include reference to further fiscal devolution in upcoming Fiscal Framework negotiations by mid-2024.
Recommendation
We welcome the work of the Independent Fiscal Commission for Northern Ireland on further fiscal devolution. The devolution of such powers will not address the difficult situation in which public services currently find themselves but could help strengthen the economy …
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Government Response Summary
The government's response does not address the recommendation for fiscal devolution negotiations to start in the first half of 2024, instead stating that the Northern Ireland Executive must consider a sector's contribution when making future budgetary decisions.
Northern Ireland Office
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Conclusions (3)
9
Conclusion
Deferred
Para 55
The transformation agenda is critical to getting Northern Ireland’s finances onto a sustainable footing and cannot be delayed any further. The underfunding of local public services by the Treasury and the lack of an Executive for five out of the last seven years has undermined progress and difficult political decisions …
Government Response Summary
The UK Government's response did not address the recommendation for the Northern Ireland Executive to set out public service transformation plans and establish the Transformation Board, instead quoting a different recommendation without providing a specific reply.
11
Conclusion
Acknowledged
Many of the structural, resource and funding issues facing Northern Ireland have been a long time in the making, but the lack of ministerial direction and accountability in recent times has not helped the plight of public services in Northern Ireland. Core reforms required across public services have not been …
Government Response Summary
The government acknowledges the severe funding situation for the PSNI and expresses an urge for a rethink by the Treasury, Northern Ireland Office, and the Northern Ireland Executive regarding the PSNI’s financial framework.
12
Conclusion
Acknowledged
Para 76
Decisions by UK Governments to reduce overall UK public spending have a significant impact on the funding Northern Ireland receives through the block grant, which makes up the vast majority of its expenditure. With tighter budgets in England, annual allocations to Northern Ireland under the Barnett formula have been squeezed.
Government Response Summary
The government acknowledges Northern Ireland's unique financial challenges and higher relative need, referencing ongoing discussions towards a full fiscal framework and existing structural changes like the 24% needs-based factor in the Barnett formula.