NI welfare reform deadlock ‘squandering public money’

14 Oct 14
Northern Ireland’s finance minister has accused parties opposed to welfare reform of having ‘needlessly squandered £87m’, as the Treasury moved to bail out the province’s government with an emergency funding allocation.

By Mark Smulian | 14 October 2014

Northern Ireland’s finance minister has accused parties opposed to welfare reform of having ‘needlessly squandered £87m’, as the Treasury moved to bail out the province’s government with an emergency funding allocation.

The Sinn Fein and Social Democratic and Labour parties have opposed implementation of welfare reform in Northern Ireland, which has made it impossible to pass the relevant measures through the assembly.

This has left the Northern Ireland Executive with an £87m gap in its budget, set to rise to £114m in 2015/16, as the Treasury refused to compensate the province for failing to make its share of total UK savings from the changes.

Finance minister Simon Hamilton, of the Democratic Unionist Party, told the assembly that the emergency £100m allocated by the UK Treasury had ‘put out the fire in this financial year… had we not, I would have feared for the future of public services in Northern Ireland’.

This allocation was made after the head of the Northern Ireland Civil Service, Dr Malcolm McKibbin, wrote to the Treasury warning that the executive may not be able to stay within its spending limits.

A Treasury spokesman said £100m had been given exceptionally and ‘an equivalent amount will be deducted from the executive’s 2015/16 budget’.

Hamilton told the assembly that Chancellor George Osborne has attached conditions to the allocation, which meant that £87m would be deducted from Northern Ireland’s budget later this year, and a further £114m next year, ‘should there be no progress on welfare reform legislation’.

‘The only alternative to overspend would have been to seek to live within our means by making further, deeper cuts to departmental budgets,’ he added.

McKibbin has been asked to develop options for both cuts in staff numbers and pay restraint to help the executive stay within its budget, Hamilton said.

Ministers have also been asked to look for spending cuts, as the budget is already £25m overcommitted in the current financial year.

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