Public Expenditure: Barnett Formula

Oral Answers to Questions — Finance and Personnel – in the Northern Ireland Assembly at 3:45 pm on 31st January 2000.

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Photo of Mr James Leslie Mr James Leslie UUP 3:45 pm, 31st January 2000

asked the Minister of Finance and Personnel if he expects the Barnett formula for funding public expenditure to be applied in Northern Ireland.

5. (AQO 130/99)

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

No one should be under any illusions about the fact that the Treasury intends to apply the Barnett formula to Northern Ireland, Scotland and Wales as set out in the document entitled ‘Funding the Scottish Parliament, National Assembly for Wales and the Northern Ireland Assembly — A Statement of Funding Policy’. That was published in March 1999, and there is no indication of any different intent on the part of the Treasury.

Photo of Mr James Leslie Mr James Leslie UUP

I think the Minister will agree that rigorous implementation of the formula will tend to squeeze the public sector in Northern Ireland over time. In view of this gloomy prognosis, what implications does he think this will have for the Treasury’s next three-year spending plan?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

As the Member has said, the Barnett formula applies to Northern Ireland a percentage share of UK expenditure. Clearly, that will create a convergence in per capita spending, and that would disadvantage some of our spending programmes, which traditionally have had a higher per capita spend than comparative programmes across the water. In the coming months we will prepare our own programme of government and spending review in the context of factors that emerge from the Treasury’s new spending review. I warn Members that the Treasury will not be an easy hit for all the special cases that we may want to make or feel deeply about. Our best persuader of the Treasury about anything will be our performance as a regional Administration.

Photo of Alex Maskey Alex Maskey Sinn Féin

Thank you a Chathaoirligh. I have spoken to the Minister about this matter and appreciate that these are early days, especially for Ministers. Given the commitments under the Good Friday Agreement and the fact we have a new target for social need, has the Minister considered how the Barnett formula will relate to the New TSN?

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

The Barnett formula sets the overall Northern Ireland block, and we have discretion in managing Northern Ireland’s share across the different programmes. The First and Deputy First Ministers have responsibility for New TSN in the sense of ensuring that the Administration properly applies its principles, aims and ambitions when making the various departmental plans. Under the arrangements and proposals for New TSN, the Department of Finance and Personnel is committed to assisting Departments to target resources properly to match social need and to come up with the best indicators to evaluate the effectiveness of our performance.