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The UK government is offering a financial package which it says is worth £2.5bn to support the return of a Stormont Executive.
It would include a lump sum to settle public sector pay claims and a new “needs-based” funding formula for public services.
It would also allow overspends from last year and this year to be repaid over five years.
An executive would have to commit to raising rates by at least 15%.
Rates are the property taxes paid by households and businesses.
It is understood the government is framing the package as dependent on the return of devolution.
The SDLP’s Colum Eastwood – the first party leader to speak in front of cameras after multi-party talks with Northern Ireland Secretary Chris Heaton-Harris – said it was not enough to fill the “black hole” in Stormont’s finances, but said “most of the parties were clear that we have to get Stormont back up and running immediately”.
Sinn Féin’s vice-president Michelle O’Neill said it is now time for the DUP to return to Stormont and called Wednesday – two days from now – “the cut-off point”.
But the DUP’s Sir Jeffrey Donaldson said the secretary of state had not mentioned any deadline, and his party was committed to getting agreement with the UK government on post-Brexit trading rules.
The government has briefed Stormont’s main parties on the headline offer with further technical briefings to follow.
Stormont’s Department of Finance has previously said it is facing £580m of public sector pay pressures this year but it is not certain if the government would fully fund that.
A new, long-term funding arrangement would begin in 2024-25 with a top up to the block grant to make sure spending per person in Northern Ireland did not fall below a “fiscal floor”.
This is based on arrangements in Wales where, for every £100 per head spent on public services in England, there is a guaranteed £115 for Wales.
That takes into account the different costs of delivering public services of an equal standard in different parts of the UK.
The independent NI Fiscal Council has produced an assessment of relative need in Northern Ireland which concluded that for every £100 per head spent on public services in England, Northern Ireland needs £124 to deliver services of the same standard.
The government says it would accept that £124 per head funding floor and that this would be worth an additional £785m over five years .
The package would also include a four year ‘stabilisation fund’ worth £1.125bn.
A second tranche of £600m in funding, a combination of reallocated and new money, could be used for public services transformation.
Aside from increasing rates a new Executive would also have to commit to other revenue raising measure by May next year and establish a Public Services Transformation Board.
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