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Big decisions to be made in a glass half-full or half-empty situation

The UK government financial package for Stormont, as finally published on Wednesday evening, represents a glass half full or half empty situation.

The pessimists feel we have been sold short. For sure, if you add up all the items included in the New Decade, New Approach document, the sorts of projects that Permanent Secretaries and interest groups have been talking about for some time, then you would need a vastly bigger sum - a capital budget of £5m and an increase in Stormont's annual spending of about £500m.

And then there is the point that some of this money would have come here anyway as the Barnett consequential following from the increase in public spending in GB as the Johnson government reverses previous austerity policies. Such Barnett money represents up to half of the £2bn that the Northern Ireland Office (NIO) document headlined.

But there is also a glass half full perspective. We are going to get £2bn above and beyond today's level of funding. Even the Barnett consequential is "new money", even if it is not "new, new money". And it is worth remembering that £1bn over and above the Barnett implies Northern Ireland getting a better deal than other UK regions.

The NIO believes the money allows the nurses' pay dispute to be resolved immediately whilst delivering pay parity over the next two years. It would also allow good work to begin on removing waiting lists and implementation of the Bengoa reform agenda. But, of course, pay parity, waiting list reduction and health transformation are long- term agenda and I suspect the money provided will really only cover the first few years. So, there could be difficult budget decisions ahead for a future Stormont Executive - perhaps after the next Assembly elections, due in 2021.

Some might argue that the Northern Ireland politicians should have held out for a better financial package - the problem with that line of argument is that would have required the use of failure to come to a political agreement as a bargaining counter. There was immense and understandably public pressure in the opposite direction. There is no way that the Executive Ministers can use a collective threat of resignation as a credible threat to coax more money out of London.

The relationship between Stormont administrations and the Treasury has been a strained one throughout much of the last century as Stormont politicians and civil servants have constantly been asking for more money and the London authorities have been seeking ways to ensure money is well spent. That is partly why the NIO document repeatedly refers to "strict conditions".

The RHI crisis was only the most recent occasion on which the Treasury had to exercise forbearance to Northern Ireland. The Whitehall mandarins do not want that to ever be repeated. I therefore wonder if the best strategy might be to co-operate now, demonstrate a track record of good behaviour and hope for some more generosity down the line? In broader terms, the policy agenda for the Executive may have to be three-fold. First, even more attention to priority setting. The New Decade document contained a very long shopping list - some selectivity will be necessary in the short to medium term.

Second, spend more efficiently. The recent Audit Office report highlighted how far we need to sharpen up the procurement process when it comes to big infrastructure. Third, unpopular though this might be, an open and honest debate about revenue raising.

Dr Esmond Birnie, Senior Economist, Ulster University Business School

Belfast Telegraph