Treasury package of funds, powers and property rescues NI Executive

9 May 02
The Northern Ireland Executive's financial crisis has been alleviated by a £200m settlement from the Treasury, along with the gift of defunct security installations and new borrowing powers that could raise billions of pounds for investment in public serv

10 May 2002

Some £75m of unallocated resources will be released, and the Executive will borrow up to £125m from the Treasury over two years at a low rate of interest. The Maze Prison, Crumlin Road jail in Belfast and three prime-site army bases will be handed over for 'community use'. This may involve their sale for development, raising about £200m.

The extra resources are linked to an agreement by the Executive to modernise government. A strategic investment body will be created, guiding infrastructure investment in public services and drawing on private sector expertise. Its first responsibility may be advising what use to make of the former security sites.

The Executive will also adopt better procurement systems, greater use of public-private partnerships and CIPFA's new local government borrowing code.

Treasury support may be linked to rating reform, which could lead to a fairer system of property taxation, the doubling of payments by households and the introduction of water rates. However, the province's First Minister, David Trimble, said that any increases in household bills would be gradual.

The Executive is to be given a borrowing power for long-term loans under limits set by the Treasury. The powers should be in place by 2004 and could raise as much as £7bn if property tax bills increase to English levels.

Announcing the package on a visit to Belfast with Prime Minister Tony Blair on May 2, Chancellor Gordon Brown said: 'In place of the symbols of the old conflict and despair, there will be symbols of the new progress and hope – barracks and prisons of the past replaced by business and prosperity for the future.'

Deputy First Minister Mark Durkan added that the gift represented 'an economic dividend, a co-operation dividend and a normalisation dividend'.


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