- Written by Jane McCormack & John Campbell
- BBC News NI
Michelle O’Neill, Caoimhe Archibald and Emma Littlepengelly spoke at a press conference at Stormont Castle
Stormont’s executive has agreed to allocate £688m to bring forward public sector pay deals.
Unions representing transport, education, health and civil service workers have been on strike in recent months over the dispute.
To solve this problem, the government has provided around £600 million in a £3.3 billion package to restore decentralization.
Finance Minister Caoimhe Archibald said on Thursday he hoped benefits would be paid as soon as possible.
He said it would now be up to unions and employers to finalize negotiations.
However, the minister said the funding would only cover one year and work would continue in the coming weeks as the government pressed to ensure it could secure a regular pay agreement.
“Hard call”
The executive branch held its first substantive meeting on Thursday since power-sharing was restored at the beginning of the month.
Ministers will also discuss plans for Stormont’s finances in 2024-25, with First Minister Michelle O’Neill saying the parties will “continue the fight” with the Treasury for additional taxing and spending powers. said.
“We often hear people say they’re not ready to make tough demands, but for the public what we’re trying to do is get the basics right, and this is not an unreasonable demand.”
Deputy Prime Minister Emma Little-Pengery said the government lacked flexibility in its timetable for asking the Executive to agree a sustainability plan and other measures by May.
The meeting comes as the Northern Ireland Fiscal Council (NIFC) warned Stormont faces a new fiscal “cliff” in 2026.
The independent budget watchdog said after analyzing the £3.3bn deal that future cuts may be needed to run a balanced budget.
Mr O’Neill said ministers were “united” in “not just the challenge, but the need to ensure we have a properly funded public service model”.
NIFC said in its report that once the short-term elements of the government’s policy are exhausted, ministers may have to increase or make cuts in revenue.
Its chairman, Sir Robert Choate, said part of the package’s aid would fall “very sharply” from around £750m a year to around £300m over the next two years.
“It is not clear why the cliff is being factored into fiscal policy, but perhaps the UK government believes it should give the executive enough time to take decisive action on raising revenues, cutting budgets and reforming public services. I guess he’s thinking about it.” .
“Some may ask if that’s a realistic schedule.”
The report also suggests that the goal of funding Northern Ireland’s required levels of public services will not be achieved until the 2030s.
Mr Stormont is responsible for setting local interest rates in the country and Michelle O’Neill ruled out dramatic rises, but an inflation-only rise would add at least £4 to next financial year’s bill. This means an additional %.
The UK government has asked ministers to raise at least £113m.
However, Northern Ireland’s political parties want more funding from the UK Treasury and insist they are not committed to raising revenue as part of the deal reached with the government.
It is understood that talks will take place in the coming days between Finance Minister Caoimhe Archibald’s department and Treasury officials.
The tax rate is property tax, which funds Northern Ireland’s public services.
Mr Stormont is responsible for setting national regional interest rates, and Mr O’Neill ruled out any dramatic rises, but said an inflation-only increase would add at least 4% to next financial year’s bills. It means.
welsh model
The financial package included up to £584m of one-off funding to address pay pressures in the public sector, as well as a two-year “stabilization” fund of more than £1bn.
It also recognizes that it costs more to deliver public services in Wales and Northern Ireland to the same standard as those provided in England, based on the Welsh model. There are also moves toward raising funds based on
In Wales, £115 is allocated for every £100 per person spent on public services in England.
image source, Getty Images
The relative expenditure required for public services in NI is estimated at £124
NI’s relative spending requirement is estimated at £124, but NIFC warns that under the current arrangement that requirement will not be met until around 2035.
Funding for NI is currently estimated at around £120.
The NIFC said the increase would help move public service funding onto a more sustainable long-term footing, but would not address the short-term financial crisis.
Stormont ministers have argued that the needs-based part of the deal needs to be revisited to reach the £124 level sooner.
Opposition leader Matthew O’Toole of the Social Democratic Party and Labor Party said there was a “pretty clear expectation” from the first talks with the UK government in December that revenue increases were expected.
“I think it’s a little disingenuous now to say it didn’t exist or was in the sky,” he said.