Belfast Telegraph

D-day for Stormont as Theresa Villiers plans crunch talks to end deadlock

Republic and US join push to save power-sharing

By Liam Clarke

Westminster is preparing to call all-party talks in a last ditch attempt to break the logjam at Stormont and save the power-sharing institutions from collapse.

Theresa Villiers hopes to make an announcement around the weekend and expand on it in her speech to the Tory conference in Birmingham on Sunday.

The Secretary of State and the Government will enlist the aid of both the Irish and American administrations as guarantors. It will also be necessary to pick an independent chair.

The move follows calls by First Minister Peter Robinson for a "St Andrew's Agreement Mark II" in an interview with this paper two weeks ago in which he said decision-making at Stormont was no longer fit for purpose and warned the institutions could collapse.

The talks are being viewed as a final push to save Stormont as divisions between Sinn Fein and the DUP over welfare reform strain to breaking point.

This week Ms Villiers will meet party leaders. Today she will meet the UUP's Mike Nesbitt, Mr Robinson of the DUP, and Alliance leader David Ford. Tomorrow it will be Martin McGuinness of Sinn Fein, while Alasdair McDonnell of the SDLP will follow later in the week.

Sinn Fein shares the DUP's gloomy prognosis of the future of our power-sharing institutions, but the two parties have yet to agree a solution.

On Sunday the Sinn Fein MP for Fermanagh and South Tyrone Michelle Gildernew told a fringe meeting at the Labour Party conference in Manchester that the institutions were "in a perilous situation" .

She added: "This situation is untenable, and it is for the British and Irish governments – with support from the US – to step up, get engaged positively and get things moving again."

Yesterday the First Minister warned that talks on improving the system of governance at Stormont must not be allowed to destabilise life here.

Mr Robinson also told the Assembly it was "imperative" that welfare reform was dealt with before the Executive and Assembly were "swept from office" by a wave of public outrage.

"People want to bury their heads in the sand, be in denial about these matters and fool themselves that somehow things could be different if there was another Government at Westminster, or that somehow they can put pressure on the coalition Government to change course," the First Minister added.

The three administrations, led by London, now intend to clear the ongoing blockage.

The matter has been brought to a head by a combination of a loss of trust between the DUP and Sinn Fein and a budgetary crisis that the two parties have been unable to resolve.

A major factor in the row is the blocking by Sinn Fein and the SDLP of a UK-wide scheme of welfare reform.

Since the changes are not being introduced here, the State is paying more in welfare benefits than the Treasury believes it should, and the excess is being clawed back from the block grant. The funding loss is £87m this year, but it will rise year-on-year until it reaches £1bn.

However, the welfare issue is not the only budgetary pressure. Last Thursday ministers were briefed by Department of Finance officials on the depth of the financial black hole that looms, partly because of a failure to plan.

Ministers were warned of a tsunami of cuts that, even apart from the cost of failing to implement welfare reform, could take 14% out of most departmental budgets next year.

One source involved in the process told the Belfast Telegraph: "Frankly, the Executive cannot survive this unless someone comes in and bails it out.

"The greatest problem with this is that they are trying to shoehorn huge savings into six months so that they can give money to Health in a hurry.

"If they planned it properly over a four-year period, it would have been challenging, but it wouldn't have caused the problems it is causing now."

The talks will aim to streamline decision-making at Stormont so that such problems do not arise in the future.

There will be pressure on the British Government to make financial allowances in return.

Downing Street, meanwhile, is eager to get the issues of flags, parading and the past resolved.

Not with a bang but a whimper... how institutions could die

Unlike a sovereign government, our Executive cannot just run up debt or print money to solve its problems.

Instead, civil servants would step in. Stormont would suffer death by a thousand cuts.

The first to raise the alarm would be senior officials who act as "accounting officers" in each Stormont department. Each would be bound to raise the alarm if she or he spotted a pattern of spending which was likely to breach allocated funding limits. The Executive could then cut money from one department and transfer it to another to make up the shortfall. If all departments were running into trouble, or if none had a surplus to bail out others, the accounting officers could stop making payments and government would grind to a halt.

David Sterling, permanent secretary of the Department of Finance, would step in to prevent that by imposing cuts of 25% to make the books balance. These would be unsustainable.

If Stormont collapsed the next step would be an election. There would be little point in that as the same parties would be elected, so it is likely we would move to direct rule.

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