Belfast Telegraph

Welfare row cash crisis fears eased by Treasury

By Noel McAdam

A change in Treasury rules could help Stormont ministers avoid a crisis as the Executive stand-off over spending goes on.

Along with the devolved administrations in Edinburgh and Cardiff, Stormont has been allowed extra budgetary flexibility which includes an end-of-year 'carry over'.

Finance Minister Simon Hamilton confirmed it was one of a number of "complex financial issues" currently being addressed at Stormont.

His DUP party is expected to continue negotiations following the failure to reach any agreement on the June monitoring round at last week's Executive meeting.

First Minister Peter Robinson warned Northern Ireland will lose £80m from its budget unless agreement is reached within days.

The total does not include fines already being imposed on the Executive over the failure to implement welfare reform – which amount to more than £34m so far.

This could meaning a possible worst case scenario loss to the local budget of £114m.

The additional £80m is already earmarked for capital projects and if left unspent will have to be handed back to the Treasury, which Mr Robinson said would be "absurd".

Sinn Fein ministers John O'Dowd (Education), Caral Ni Chuilin (Arts, Culture and Leisure) and Michelle O'Neill (Agriculture) slammed the proposals arising from the quarterly monitoring of departmental spending as "unacceptable". Nonetheless, Mr Hamilton said: "We continue to work at the monitoring round and address a number of complex financial issues including financial movements such as end-year carry over under the Budget Exchange Scheme and in-year departmental adjustments."

The measures were announced last year by the Chief Secretary to the Treasury Danny Alexander following an appeal from Mr Hamilton's predecessor Sammy Wilson and his Cardiff and Edinburgh counterparts.

In essence the rule change allows the devolved administrations to carry forward underspends up to an agreed cap.

The caps were set for the previous financial year at £59m on the resource/current spending site and and £14m on capital – but can be varied for the most recent and current periods.

Unlike departments in Whitehall, there is no requirement to inform the Treasury in advance of the expected underspend in order to carry over the funding.

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