Belfast Telegraph

Monday 1 September 2014

David Cameron’s Northern Ireland cuts deal ‘angers England’

David Cameron and Nick Clegg

An influential think tank has claimed David Cameron is risking an English “backlash” by letting Stormont and other devolved bodies defer spending cuts to next year.

The Institute for Public Policy Research (IPPR) has also calculated that Northern Ireland gets 26% more public spending per head of population than England.

In a report published today, the well-known organisation calls for a reform of UK funding arrangements to end regional disparities.

The new Prime Minister confirmed on a visit here last week that the Stormont Executive can delay its portion of £6bn UK spending cuts to 2011/12. The province's share of the £6bn has been worked out as £128m.

Regional public spending allocations are made according to a complicated system called the Barnett Formula.

According to the IPPR, Northern Ireland gets £6,120 in public spending per head of population compared to £4,827 in England, £5,506 in Wales and £6,016 in Scotland. Its calculation, which does not include social security spending, puts the province 26.7% ahead of the English level. The UK average was £4,997 per head of population.

The new IPPR report — Devolution in Practice 2010 — examines the devolved experience in Belfast, Edinburgh and Cardiff, and the implications of the new government at Westminster.

It hails devolution as a landmark reform, but says the arrangements will be tested given the tightening financial situation.

The think tank report points out that the new London Government lacks a strong mandate outside England. It also says devolved administrations cannot be protected from looming spending cuts, if English regions and taxpayers are to be treated fairly.

Guy Lodge, associate director of IPPR, said grant funding to the devolved authorities will have to be cut as part of the deficit reduction programme.

“Holding off cuts to the block grant until 2011/12 might help David Cameron to win friends in Scotland, Wales and Northern Ireland, but it risks a backlash from England, particularly those poorer areas which already look jealously at the funding those parts of the UK receive,” he commented.

The report's conclusions include a proposal for the Barnett Formula to be reformed. It says changes are needed to be fair to all parts of the UK and argues that the devolved administrations need to be given greater fiscal autonomy to raise their own revenue.

Stormont MInisters are expected to decide next month whether to defer some or all of the £128m funding cut to next year.

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