Belfast Telegraph

Friday 18 April 2014

New doubts over Brown's peace dividend

Fresh doubts over Chancellor Gordon Brown's economic 'peace dividend' package for Northern Ireland surfaced today ahead of renewed negotiations in the run-up to devolution.

The Government has admitted there is an emerging financial gap, called 'unfunded liabilities', but has not yet quantified how much it might amount to.

The issue could, however, put immediate pressure on existing spending plans even before the new power-sharing ministers are due to 'hit the ground running'.

Direct Rule Minister David Hanson has revealed he is already talking to the Treasury about the possibility of using past departmental 'underspends' to tackle the shortfall.

Former Trade Minister, Sir Reg Empey, said DUP, Sinn Fein, SDLP and Ulster Unionist representatives were told there were no 'unfunded liabilities' by officials at the March 22 meeting.

"But the fact is that it has now been made clear that there are," Sir Reg said, "and there is now a big question mark over the Chancellor's proposals.

"These are in effect unpaid bills which put a dent into the package the Chancellor is offering. There may not be a black hole, but they should be able to give us some general information, or at least some sort of steer about what kind of liability is involved.

"Until we can get this sorted out we will not know what the net gain, if any, is from the Chancellor's package. It is essential this is sorted out. "

Mr Hanson said he was aware of some emerging pressures linked to the reform programme including the review of public administration, rates and water charges for which no allocations have been made.

"This approach is not unusual as firm quantification of the pressures was not possible when spending plans were set," he said.

And also, as in the past, the 'end year flexibility' mechanism drawing on unspent resources from previous years which have not been returned to Government coffers could address such pressures.

A spokesman for the Department of Finance and Personnel - of which DUP deputy leader Peter Robinson is expected to become minister - confirmed some financial pressures have emerged.

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