Confidence and Supply: Northern Ireland’s £1 billion

Since the 2017 general election the Conservative Government has relied on the support of the Democratic Unionist Party (DUP) to command a working majority in the House of Commons. This arrangement was formalised shortly after the election in a Confidence and Supply Agreement (the Agreement). The DUP agreed to support the Government on all key votes (such as the Queen’s speech and key financial legislation) and the Government agreed to provide the Northern Ireland Executive with additional financial support; which amounted to an extra £1 billion over five years. To put this in context, Northern Ireland received a cash grant from the Treasury of £14.5 billion in 2017/18.

Here we look at what the £1 billion was expected to pay for, how much has been paid so far and how it has been spent.

What does the £1 billion cover?

The Agreement was made up of two documents, one of which contained details of the £1 billion of financial support, which is being provided for six issues:

• infrastructure development
• health service transformation
• broadband development
• immediate pressures in health and education
• pockets of severe deprivation
• mental health

For each, funding was agreed for at least two years.

How much of the funding has Northern Ireland received?

The Northern Ireland Executive has received just under half of the agreed funding so far. We can keep a track on the funding by following the UK Parliament’s approval for spending. Generally speaking, Parliament authorises all Government spending on an annual basis, through the Estimates process, including the grants to the Northern Ireland Executive. This is largely a routine formality rather than a means of controlling Government spending.

In 2017–18, Parliament approved £20 million of the Confidence and Supply funds to be added to the grant to the Northern Ireland Executive. The Head of the Northern Ireland Civil Service told the Northern Ireland Affairs Committee that these funds were spent on education and to alleviate health pressures.

For 2018–19, Parliament approved a further £410 million to be added to the grant to the Northern Ireland Executive (£210 million day-to-day spending and £200 million investment). The funding was provided for the following areas:

• £80 million for immediate health and education (day-to-day spending). Of this £36.5 million is reported to be given to the Northern Ireland Department of Education
• £30 million to address mental health and severe deprivation (day-to-day spending)
• £100 million for health transformation (day-to-day spending)
• £200 million for infrastructure (investment spending)

This leaves £570 million still to be drawn down.

How is the money being spent in Northern Ireland?

The Chief Executive of the Health and Social Care Board in Northern Ireland has explained how the £100 million allocated to healthcare transformation in 2018-19 will be spent:

• £30 million to stabilise the system by stemming the increase in waiting times for both diagnostic and elective care
• £15 million for investing in primary care, including £5 million for the initial roll-out of an operating model for multidisciplinary team working within GP practices
• £15 million for workforce development across the health and social care system,
• £30 million of investment in reforming hospital and community services including the establishment of new elective care centres
• £5 million on building capacity in communities and in health prevention approaches
• £5 million on ‘enablers’ for transformation, including investment in development of quality improvement initiatives.

We also know how £16.5 million awarded in 2018-19 for tackling deprivation is being spent:

• £6.4 million for Sure Start
• £0.7 million for literacy and numeracy
• £1.3 million for nurture units
• £2.3 million for Early Years Pathway funding
• £5.8 million for extended schools

What about the breakdown of power sharing in Northern Ireland?

Northern Ireland has been without a functioning Assembly and Executive since January 2017 due to the DUP and Sinn Fein failing to reach a deal to restore power sharing. The Head of the Northern Ireland Civil Service, David Sterling, has said the lack of Ministerial direction makes it difficult to spend some of the funds, in particular those allocated to broadband development.

He said: “We will need a ministerial steer on how that money is to be used. Should we focus on superfast or ultrafast? Should we have a preference for supporting business or domestic, and how should the balance of spend be allocated? What about the rural-urban split? There are quite significant issues where it would be improper for civil servants to be deciding on the allocation of that resource. There are policy issues, which only Ministers can determine.”

In October 2018, the UK Parliament approved legislation which clarifies the power of Northern Ireland’s civil service. Whether this is sufficient to enable effective decision making and spending within Northern Ireland government departments remains to be tested.

Did Scotland and Wales receive any extra funding?

No they didn’t. In a previous Insight we discussed why Scotland and Wales did not receive extra funding as a result of Northern Ireland’s additional funding. The Scottish and Welsh governments have argued that they should have received funding because the additional spending was intended for areas of devolved policy.

Aruni Muthumala is a Senior Economist in the Scrutiny Unit.

Matt Keep is a statistical researcher specialising in the public finances at the House of Commons Library.

Picture credit: jpg, General view of Parliament Buildings by Robert Young on Flickr website. Licensed under CC BY 2.0/ image cropped.