Belfast Telegraph

Devolved administrations go for gold in Olympics cash row

By Tom Moseley

With just 185 days to go until the opening ceremony, excitement is building in London ahead of the Olympic Games.

How the benefits will be felt across the UK, however, is another matter. Just before Christmas, the Cabinet office quietly published the outcome of a dispute with the Northern Ireland, Scotland and Wales assemblies.

The devolved administrations' long-running grievance was that their transport and regeneration budgets should be compensated for the billions being poured into London for the Olympics.

The pertinent figure was £5.4m - the extra amount of money that the Northern Ireland Executive will be given to end the formal inter-governmental dispute lodged last year.

That's just over half of Wales' share, and a third of Scotland's. But set against the £9.3bn block grant, it seems miserly.

Under the Barnett funding formula, used in devolved administrations for more than 30 years, Northern Ireland, Scotland and Wales receive 'consequential' payments when extra investment is made that benefits only England.

The Olympics fallout was sparked in 2007 when the previous Labour government declared the Olympics would be exempt, as the Games were of UK-wide benefit.

Politicians have agreed to "learn lessons" from the affair. But as one row ends another could begin, with the £33bn high-speed rail network between London, Leeds and Manchester via Birmingham.

Since the much-trumpeted announcement, I've been trying to find out whether Barnett consequentials will apply - ie will Northern Ireland get its own much-needed cash injection to revamp its rail routes?

Ministers were keen to emphasise the wider benefits of the scheme. It will cut journey times to Scotland's main cities to three-and-a-half hours and there is an element of support in north Wales.

However, HS2 will not go under the Irish Sea. So there would be a pretty tenuous case to be made for UK-wide benefits here.

It seems that costs incurred in this Parliament will be 'Barnetted', but that only includes preliminary expenditure, such as surveys and planning costs. The big stuff will come further down the line.

SDLP leader Alasdair McDonnell tried a Parliamentary question, but Treasury Secretary Danny Alexander told him nothing would be decided until detailed budgeting has been completed.

It seems Westminster is happy to trumpet investment in England's railways, but reluctant to say how the benefits will be shared.

Getting this thrashed out now - and avoiding a repeat of the Olympics row - would be advisable.


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