Sir Robert Chote, chairman of the Northern Ireland Fiscal Council, warned that the region faces a financial crisis as stabilization funding provided by the UK Government expires in 2026/2027. While a £3.3 billion package, including a 24% top-up to Barnett consequentials, helped restore devolution in 2024, it is not a sustainable solution. The committee heard that this short-term funding will create a 'cliff-edge' as the Executive will need to find alternative sources of revenue.
The Stormont Executive faces a financial “cliff-edge” when stabilisation funding provided by the UK Government runs out, MPs have been told.
This included a commitment that the region receives 124% of any equivalent increase in funding for England for the policy areas run out of Stormont, including health, policing and education. Stormont ministers have also since agreed a draft budget, but have continued to warn of huge financial challenges facing their departments.
He added: “One challenge at the moment is that short-term stabilisation money runs out, thus confronting the Executive with a potential cliff-edge in 2006/2027 when that money goes away but the 24% top-up to the Barnett consequentials won’t have been large enough to fill that gap.“That cliff-edge could in theory move forward to 2025/26 if the Executive doesn’t manage to balance the budget this year and also to meet its commitment to deliver some £113 million of additional revenue as well.
He said: “The short-term stabilisation was certainly helpful but not on its own putting you on a sustainable pattern for five years ahead.”
Northern Ireland UK Government Funding Stormont Executive Financial Crisis
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