What could the various financial deals look like?

We are now at the stage where the DUP has, shall we say, “endorsed” Theresa May’s Conservatives in office but absolutely no more, while talks are ongoing for the grandest possible coalition at devolved level in Northern Ireland. To some extent, the former makes the latter easier – it is now politically easier for the Conservatives to accede to particular financial demands from Northern Ireland, even if they are not from the DUP.

Nevertheless, this does not quite mean that “no pothole will go unfilled” as suggested by one LBC commentator, although I saw his broad point. Regionally identifiable funding is subject to the Barnett Formula, so money cannot simply be dished out.

Nevertheless, some things probably could be worth requesting through a less strict application of “parity” and a series of “Programme Funds”:

– acceptance that the RHI shortfall and the non-application of bedroom tax do not breach parity, at a stroke restoring £40m to the Northern Ireland devolved budget annually (perhaps throwing Air Passenger Duty into the bargain for another few million; reduced Corporation Tax is less likely as Scotland would inevitably seek it too);

– establishment of a “UK-Ireland Infrastructure Fund” (around a third Dublin-funded in line with existing A5 commitments to meet requirements of St Andrews) to assist with infrastructure in border areas (effectively enabling the A5 Derry-Ballygawley and A6 Derry-Dungiven to be built with external money, saving the Northern Ireland devolved budget in effect around £200m/year to the mid-2020s, plus the Border Pipeline);

– establishment of a “UK-Ireland Health Transformation Fund” (mainly UK Government funded but with some Irish funding to explore cross-border cooperation for rarer treatments or conditions) to enable Northern Ireland’s devolved Health budget to be spent entirely on care while an extra amount (perhaps a reasonable sizeable one bigger than either of the savings above) is allocated by the UK Government towards the change management required for the transformation to take place in return for sharing of relevant learning and best practice (for example with developing integrated Health and Social Care systems in places like Greater Manchester);

– establishment of a “UK-Ireland Compensation Fund” (exclusively UK funded but with potential relevance across the Island) to pay victims of historical child abuse without affecting the Northern Ireland devolved budget; and

– a “UK-Ireland Communities Fund” to help inner-city communities overcome paramilitarism and help border communities (and businesses) with any of the administration arising from Brexit.

I should emphasise, not all of these would be on my priority list and I am not suggesting this is all fair. Much of it simply kicks the economic can down the road. Nor do I think all of it is deliverable at once. But it is a judgement of the sort of thing the main parties may be looking at as the various deals unfold.


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