Budget: Unions call for Stormont overspend write-off

Last year, Stormont departments overspent by £300m - money which the government says must be repaid

Trade unions are calling on the UK government to write-off Stormont's budget overspend.

They have also asked for the creation of a dedicated fund for "real transformation" of public services.

Last year, Stormont departments overspent by £300m - money which the government says must be repaid.

The Irish Congress of Trade Unions (ICTU) said enforcing the debt will not be learning exercise for governance in Northern Ireland.

It added that the idea is "not grounded in reality".

Stormont officials have warned of another looming overspend in the absence of a minister to make big decisions.

'Inescapable pressures'

ICTU said last year's overspend was largely about "inescapable pressures" such as pay awards, rather than new funding commitments.

It says the overspend should be forgiven as the first of four steps to creating "sustainable public finances".

The organisation acknowledges that some reforms to public services are necessary but warns they will be doomed to failure if they are not supported with dedicated investment.

"If we are serious about putting Northern Ireland's public finances on a sounder footing, then there needs to be a realistic assessment of what can be achieved through public sector reform and a credible way of bringing such reforms about," it said.

ICTU is recommending a fund which would sit outside the normal budget process

ICTU is recommending a fund which would sit outside the normal budget process and would involve departments submitting bids for specific reform projects.

It says this would allow the UK Treasury to be assured such funds were not being used merely to prop up existing services while also providing a route out of the current path of public expenditure for the Northern Ireland Executive.

The UK government has recently asked the Northern Ireland Civil Service to provide advice on measures that could generate public revenue in Northern Ireland, or otherwise improve the sustainability of public finances.

A Northern Ireland Office spokesperson said: "It is the government's expectation that a returning executive will consider the same information and use this to make the necessary decisions to put Northern Ireland's public finances on a sustainable footing and pave the way for improved public services.

"If this does not happen in a timely manner, it is the government's intention then to direct a series of public consultations which will give the public and all interested parties an opportunity to consider the range of options being examined and to feed in their views."

Barnett formula reform

ICTU says that in the medium term the devolution funding system, known as the Barnett formula should be reformed.

The Scottish, Welsh and Northern Irish administrations have a large part of their budgets dictated by the formula.

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Under it, extra funding for England has an affect on the other nations, dependent on their population size and the powers devolved to them.

Earlier this year the independent NI Fiscal Council (NIFC) warned that the way the formula works is eroding Northern Ireland's budget premium.

The NIFC concluded that public spending per head in Northern Ireland needs to be 24% higher than in England to deliver comparable public services.

It calculated that spending per head in Northern Ireland is currently 23% higher than England.

But it warned that under the current public spending model that premium will fall to 20% by the end of this decade.

The Democratic Unionist Party (DUP) has also be pressing for changes to the formula.

The party's deputy leader, Gavin Robinson, has said that unless there is a "total recalibration of how Northern Ireland is funded" the situation will "only get worse".