Stormont Budget: the way out

Cathy Gormley-Heenan and Newton Emerson are swiftly evolving into a BBC commentator dream team, because they both add genuine interest to the discourse and they actually disagree with each other! One thing they did agree on Thursday was that it is in all parties’ interests to help Sinn Fein out of the hole into which it has dug itself.

My own preference was outlined here a month ago – I believe strongly that devolving economic control would work politically and would be the best option in the longer term. It won’t happen, however.

Short of that, there is a simple route, hinted at in fact by Mike Nesbitt of all people on the same programme, which would have the effect of returning half a billion to the Assembly Budget over the average Assembly term – a “win” Sinn Fein could claim if it wished.

Simply, money that is not spent by the Northern Ireland departments should remain in Northern Ireland.

Currently, with some specific exceptions, money which is not spend from each Northern Ireland Department’s budget is returned to the UK Treasury. Usually, this is a very small amount, because as the end of the financial year approaches (in February and March), Departments off-load the extra – hence we see pavements dug up, short term employment training schemes run, and minor roadworks cunningly brought forward a few months. However, some of the money cannot be off-loaded so quickly, and back it goes. This averages £100m per year – 1% of the overall current resource budget.

Allowing the Northern Ireland Executive to maintain this money in a “Runover Fund” would therefore add £100m to the following year’s budget on average; furthermore, the value of that would be considerably greater because in fact Departments would not have to rush in February and March to off-load their money (being easily able to negotiate keeping it in the following year’s pot).

Added to my implicit proposal that Northern Ireland should only have to make up the difference of doing welfare or legal aid its own way (thus breaching “parity”) and not be inflicted with the whole bill, and that it should only be required to do this in the specific areas where its policy is different, and the total saving could in fact exceed £200m, with value considerably higher than that.

Convert this into £1b over an Assembly term, allow Sinn Fein to take the credit, and the Assembly has a reasonable chance of survival. Whether anyone would care is another matter completely, of course…

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