Belfast Telegraph

Thursday 2 October 2014

£5m-a-month penalty looms as welfare reform talks postponed

Social Development Minister Nelson McCausland: there will be an impact on classrooms, teachers, schools, hospitals, nurses, social services and operations.
Social Development Minister Nelson McCausland: there will be an impact on classrooms, teachers, schools, hospitals, nurses, social services and operations.

A £5m-a-month penalty on Stormont coffers is set to kick in after a planned crunch meeting to attempt a breakthrough on stalemate over welfare reform was postponed.

The special session will not be rearranged until next month – when the loss from the block grant imposed by the Treasury over delays in implementing the shake-up is due to begin.

Sinn Fein and the DUP have been at loggerheads over implementation of the national changes – the biggest upheaval of the welfare system in 40 years.

Social Development Minister Nelson McCausland had summoned the Executive's sub-committee, which also includes Finance Minister Simon Hamilton, in the hope it could have led to a final Executive decision on January 16.

A statement from Mr McCausland's department said: "The Executive sub-committee meeting on welfare reform has been postponed to accommodate the Executive committee meeting deferred last Thursday.

"The department is making arrangements for the meeting to take place in early January."

Earlier Mr McCausland warned "...the clear message from Westminster, the Department for Work and Pensions, the Secretary of State and the Treasury has been that, if we miss the January deadline, penalties of approximately £5 million a month will kick in.

"When you start to take £5m and up to £200m a year off the block grant, it cuts into the money that departments have to spend.

"That means that there will be an impact on classrooms, teachers, schools, hospitals, nurses, social services and operations.

"This is not out there floating about in the ether; it is a reality. It is important that people grasp the nettle and we deal with the issue as a matter of urgency."

First Minister Peter Robinson has already suggested the legislation should be allowed to go forward while work continues on the regulations under which the shake-up will be implemented.

Deputy First Minister Martin McGuinness said the warning from Work and Pensions Minister Mike Penning that Executive coffers will lose £5m a month were among the worst remarks ever made by a direct rule minister.

"Instead of threatening cuts of £5m-a-month from our block grant, it would be better if Mike Penning spent his time working out why his department has written off £34m on an IT system that is not fit for purpose," he said.

BACKGROUND

Work and Pensions Minister Mike Penning travelled to Belfast last month to warn that the stand-off over welfare reform legislation will cost Executive coffers £5m-a-month from January rising to an annual £250m in two years.

He said the penalty was the direct result of the failure to implement the legislation in the Assembly and pointed the finger at Sinn Fein for delays.

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