Treasury to give Executive £400m in a bid to balance department budgets

The Treasury is to make £400m available to the Stormont Executive this year to make sure departments can balance their budgets, the government has said.

Stormont's Finance Minister John O'Dowd had previously estimated an overspend of about that amount, with the greatest pressures in health and education.

The government had previously said the Executive needed to live within the existing funding envelope it had received.

But on Wednesday, Northern Ireland Minister Matthew Patrick said the Treasury has granted a one-off reserve claim to protect public services, which will need to be repaid over the next three years.

Finance Minister John O'Dowd confirmed that £214.6m will be allocated to the Department of Education and £185.4m to the Department of Health.

A reserve claim is a call on a Treasury fund that exists to cover unforeseen, unavoidable and unaffordable spending pressures.

It is understood that the Treasury put the offer to the executive at the end of last month.

Speaking during Northern Ireland questions in the Commons in response to Democratic Unionist Party (DUP) leader Gavin Robinson, Patrick confirmed that the government had approved the reserve claim for the executive.

He said it was an "exceptional" move that would be "accompanied by an open book exercise", which will review how money is being spent by individual departments.

Robinson said through work his party had engaged in, the figure of £400m had "doubled and rightly so".

In a statement, Robinson said that this "exceptional funding" provides "vital short-term flexibility" but it will not "resolve systemic problems".

"Accountability must sit at the heart of public spending. Last year's end point should not automatically become this year's starting point," he said.

"With expertise at an all-time low, sickness levels far too high, and vacancies and temporary promotions at unacceptable levels, there must be root and branch reform within the Civil Service."

In a statement, Finance Minister John O'Dowd said: "While this flexibility is welcome, it does not cover the full forecast overspend.

"We must therefore continue to reduce the overspend, and I remain committed to working with ministerial colleagues to manage the remaining pressures."

The department added that the money will be repayable as follows: £80m in 2026-27, £160m in 2027-28 and £160m in 2028-29.

Social Democratic and Labour Party (SDLP) MLA Matthew O'Toole, the leader of the opposition at Stormont, said the funding is positive but "given the reserve claim will have to repaid from April onwards, it risks simply pushing the problems into future financial years".

"It feels like the Executive is engaged in one never-ending credit card balance transfer without ever gripping the situation," he said.

"It also appears there is no progress on delivering a multi-year budget, which was promised by the Executive

"It's all too likely that this money will be swallowed into Stormont's black hole."