Speaking at the launch of a major new policy document from trade unions addressing Northern Ireland’s public finance crisis, ICTU Assistant General Secretary Gerry Murphy said
Northern Ireland’s public finances are a mess. This needs to be addressed and the conversation needs to start now. This involves a wider discussion than we are used to.
The unions have detailed proposals for dealing with the short-term issue of the NI budget. We have set out a medium-term plan for ambitious investment and reforms to drive better delivery of public services for every citizen. In the longer term we need a realignment of our economy to achieve fiscal sustainability. This can be summarised into four steps:
• We need to drop the debt that is currently crippling our finances;
• We need a mechanism to enable real transformation of public services;
• The Barnett Formula is redundant and should be replaced;
• Tax changes need to be made at Westminster
The Secretary of State is selling us a pup. NI devolved departments were not irresponsible or too generous. Instead of ‘super-parity’, we have a real problem with ‘sub-parity’ issues, particularly in the areas of childcare and apprenticeships.
The devolution of further revenue raising powers has been suggested as another route to help get Northern Ireland’s public finances onto a more sustainable path. There are no magic bullets in devolved taxation. Having power to raise or lower certain taxes carries its own risks.
There must be no more quick fixes. We propose instead a new Transformation fund for the type of reforms required for our NHS and other public services. This would be separate from the Block Grant and would involve Stormont departments submitting bids for specific reform projects to HM Treasury. Therefore this avoids making the same mistakes of previous deals where funding for long term problems was granted on a short-term basis.
In the medium term, NI should have a funding settlement established on a needs-based system that ensures public services match those available elsewhere in the UK.
The part Westminster can play is outlined in ICTU‘s 2020 ‘No Going Back’ report which highlighted the fact that in the UK, there are significant areas of under-taxation. Closing these gaps would potentially make available significant amounts of money for investment in public services.
We are available to participate in a such a conversation.
