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DUP to propose overshoot budget

Published 02/06/2015

The DUP's Arlene Foster and party leader Peter Robinson, during a press conference outside Stormont Castle
The DUP's Arlene Foster and party leader Peter Robinson, during a press conference outside Stormont Castle

The Democratic Unionists are to propose a budget for Northern Ireland that will overshoot the region's available funds by £600 million in a bid to force a settlement to a bitter welfare reform dispute.

DUP leader and First Minister Peter Robinson said his party will present what would be a partially unfunded spending plan to counterparts in the mandatory coalition in Belfast in the coming days basing it on the assumption that stalled welfare reforms have been introduced in the region.

He said the move would either compel the opponents of the reforms - Sinn Fein and the SDLP - to change position, or would force the hand of the UK government to intervene to avert a financial meltdown, and potential collapse of the power-sharing administration.

Sinn Fein's Conor Murphy did not immediately reject the proposal but warned that any budget, "fantasy or real", could be torpedoed if the Chancellor announced further cuts later in the summer.

Mr Robinson issued the budget ultimatum on a day when the British and Irish governments and the five Executive parties met for talks aimed at saving the faltering Stormont House Agreement, which has been threatened by the welfare impasse.

The talks broke up without resolution, with Northern Ireland Secretary Theresa Villiers acknowledging the situation "looks increasingly grim".

The DUP has warned that the continued failure to introduce the Government's changes to the benefits system has left the Executive facing a £604 million black hole, in part due to Treasury penalties for non-implementation.

Mr Robinson said his party would not administer spending cuts on that scale and said if the its budget was not accepted he would not sign up to any other version - a move he said will force a senior civil servant to take control over Stormont spending under tight fiscal restraints which, the DUP leader claimed, could see almost £3 billion in cuts administered.

Mr Robinson challenged Sinn Fein and the SDLP to either accept the budget, and therefore agree to benefit system changes, or explain to voters why they forced a civil servant to implement savage spending cuts.

He said the only other alternative would be for the UK government to intervene and implement welfare changes over the head of the Assembly.

Mr Robinson said the protracted process to try to implement December's Stormont House deal had "come to the end of the road".

"We are not prepared to fudge issues any further, decisions have to be taken and in accordance with that view we intend to take steps ourselves to ensure those steps are taken," he said.

He said a budget "based on assumption that the Stormont House Agreement has been implemented" would be drawn up by DUP Finance Minister Arlene Foster.

He said: "It will take into account the fact as far as we are concerned people who want to implement welfare reform proposals have done so, it will take into account all of the financial issues contained within the Stormont House Agreement and we will offer that budget to ministerial colleagues and that is the only basis we are prepared to go forward on.

"We are not prepared to make £604 million of cuts to public services, we are not prepared to stand aside and allow the permanent secretary to cut £2.8 billion off public services.

"We have to take into account the needs of the people of Northern Ireland. This is our only way of doing it and in doing it requires either the SDLP or Sinn Fein on the one hand to live up to the agreement they signed up to last December or for the Government to do what they alone can do and that is to implement those changes at Westminster themselves."

Sinn Fein and the SDLP vetoed the welfare reforms because they claim they will hit the most vulnerable in society.

Emerging from the meeting at Stormont House, Sinn Fein's Conor Murphy did not rule out the DUP's budget plan.

But, reiterating the party's position that the UK government shoulders the blame for the crisis, he warned that any agreed budget could be undermined if Chancellor George Osborne announces more in-year cuts this summer.

Mr Murphy said he had been given "very, very little detail" in relation to the DUP's proposal.

But he added: "We are prepared to consider any options. If people want to bring constructive suggestions to the table we will consider them.

"The weakness in it is it doesn't seem to take account for the fact that should we even agree a budget - a fantasy budget or a real budget - in the next number of weeks that could be further undermined by further in-year cuts imposed by the Treasury."

Mr Murphy insisted his party was in positive, solution finding mode. But he made clear that any move by the Government to take back welfare powers to Westminster would be "unacceptable".

He said the current crisis had been brought about by cuts enforced by the Treasury and was being exacerbated by the prospect of further cuts being announced in the Chancellor's UK-wide budget in July.

"All of that gives the context to some of the specific issues we are grappling with in terms of the issues to do with the Stormont House Agreement," he said.

"What the Executive does require going forward is a workable budget which can deliver on the programmes for government."

He said finding a resolution was not going to be easy.

"Signs of political will I have to say are scarce," he added.

"But we intend to continue to apply ourselves to find a solution. But of course the key player in relation to all off this and perhaps the people who have shown least intent in terms of delivering or becoming flexible or approaching this with any sense of trying to bring a resolution are indeed the British government, who are largely responsible for the crisis we find ourselves in."

The Government has insisted the welfare reforms are necessary, and must be introduced if the rest of the Stormont House Agreement is to be implemented.

The agreement, which envisaged Stormont-funded top-up schemes to help struggling benefit claimants, had been hailed as resolving a range of disputes destabilising power-sharing in Belfast.

The defeat of the Welfare Reform Bill in the Assembly last week has now endangered other elements of the accord, such as the devolution of corporation tax powers, access to £2 billion of increased borrowing powers from the Treasury, a major civil service redundancy scheme and new structures to address the legacy of the Troubles.

But, of more immediate concern, the reputed £604 million funding gap this financial year has placed the very future of the power-sharing administration in doubt.

That shortfall is in part a consequence of Treasury penalties for non-implementation of welfare reforms currently running at just under £10 million per month.

While initially backing the welfare element of the Stormont House Agreement, Sinn Fein withdrew its support three months later, claiming that Executive-funded top-up measures were not as comprehensive as it believed were envisaged in December's negotiations.

The DUP has accused Sinn Fein and the SDLP of welching on the deal.

After today's meeting at Stormont House, which also involved Ireland's Minister for Foreign Affairs Charlie Flanagan, Ms Villiers said: "The situation looks increasingly grim. No resolution was found at this afternoon's meeting and time is running out.

"If the impasse on welfare reform is not resolved, then the whole Stormont House Agreement is in jeopardy, including the £2 billion financial package and the new institutions on the past. We now face the real prospect of emergency budget provisions coming into operation by the end of July with a negative impact on front line public services. Implementation of the Stormont House Agreement is the only way to get things back on track. The Government is doing all it can to achieve this.

"The question is whether Northern Ireland's leaders are able to find a way to deliver on their side of the deal."

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