MPs to UK Government: Look again at NI funding formula

26 March 2024

MPs on the Northern Ireland Affairs Committee have called on the Government to review how it calculates Northern Ireland’s funding in a new report published today.

Alongside the deal that accompanied Stormont’s restoration in February, the UK Government announced a new needs-based element of funding for Northern Ireland. NI will receive 124% of any equivalent increase in funding for England – so-called Barnett consequentials - for the policy areas run out of Stormont, including crisis-hit services like health, policing and education. The Committee noted calls, however, for this change to apply to NI’s overall block grant as of 2022, not just periodic increases in it from April this year. MPs added that under the Government’s plans, NI funding will only slowly rise to a point below which it should never have been permitted to fall in the first place.

It was “deeply regrettable” that the measure will “act as a fiscal ceiling”, the Committee’s public services funding in Northern Ireland report concluded. It added that “the exact calculation and assessment of the needs-based factor” should be reviewed in negotiations between Stormont and Westminster on the details of how the deal will operate.

The UK Government and the Executive should also “rethink” the financial framework for the Police Service of Northern Ireland to ensure it “has a greater variety of options in dealing with any financial difficulty”, the report says. The Service currently has over 1,000 fewer officers than its 7,500 target as it faces budgetary challenges including potential fines and compensation claims relating to last year’s data breach.

Chair's comment

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.”

MPs on the Committee are also calling for the Executive to set out its plan for the much-delayed transformation of public services and to set-up a board to implement the plan “without delay”. The Bengoa report recommended that NI’s health service should focus on prevention as a means of making savings. However, witnesses to the inquiry stated that this had not been achieved and that progress had halted in other areas due to Stormont’s absence in five of the last seven years. The Government has set aside £235m of ringfenced funding for transformation, but the money’s release is contingent on the Executive establishing a Public Service Transformation Board.

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 8 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.”

Further information

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