NI Affairs Committee: NI public funding plan ‘deeply regrettable’

It is "deeply regrettable" that a new way of funding public services in Northern Ireland will not immediately reflect the level of need, MPs have concluded.

The Northern Ireland Affairs Committee has been investigating the funding and delivery of public services.

It looked at the government's financial package which accompanied the return of devolution.

Part of that package was a new "needs-based" funding formula.

Needs-based funding recognises that it costs more to deliver public services in Northern Ireland to an equivalent standard to those provided in England.

Independent experts on the Northern Ireland Fiscal Council have estimated that Northern Ireland needs £124 per head for every £100 per head spent in England.

Northern Ireland is estimated to have now fallen below that level to about £120 per head.

The government has said it will top up annual public funding in Northern Ireland by 24% as a way to get back to the assessed level of need.

However, the Fiscal Council has warned that those top-ups will not bring Northern Ireland back to its level of need until about 2035.

The MPs said it was "deeply regrettable" that the proposal will only slowly lift Northern Ireland's funding to a point "below which it should never have been permitted to fall in the first place".

They add that a review of the exact calculation and assessment of the needs-based factor should be included as part of the terms of reference for upcoming negotiations between the government and Northern Ireland Executive.

Chair of the committee Sir Robert Buckland said the "delay" in Northern Ireland receiving the higher level of funding "is going to have an appreciable effect on the way in which public services are delivered".

"The matter should be rethought and reviewed," the Conservative MP told the BBC's Good Morning Ulster Programme.

However, he also said that there was a need for reform and "transformation" in Northern Ireland's public services, which he added "is the responsibility of the Executive primarily".

"That nettle has to be grasped sooner or later," Sir Robert added.

A Northern Ireland Office spokesperson said: "In December 2023, the secretary of state for Northern Ireland offered a comprehensive financial package to the Northern Ireland parties for a restored executive.

"As part of the financial package HM Treasury has opened discussions with the executive on a fiscal framework.

"These discussions are ongoing."

The Northern Ireland Affairs Committee examines the administration, spending and policy of the Northern Ireland Office.

It is currently comprised of 10 MPs and mainly works by carrying out inquiries into various issues.

It has the power to call witnesses to give oral evidence.