The restoration of Northern Ireland’s powersharing government was always going to require a financial settlement.
On Monday, the UK government put an offer on the table.
A round table, to be specific; the North’s five largest parties met the Northern Secretary Chris Heaton-Harris at Hillsborough Castle outside Belfast for discussions “on the sustainability of Northern Ireland’s finances and public services.”
The UK government’s argument is that it wants to sort the money out before, rather than after, a deal is done, in order to give a renewed Stormont the best chance of hitting the ground running.
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Agreement here would certainly add to the pressure on the Democratic Unionist Party (DUP) to go back in, and it does have the appearance of political choreography at work, that all the ducks are lining up in the sort of row needed to get Stormont back up and running and which, unsurprisingly, has raised expectations that its return is imminent.
There is even a potential deadline, a must for any serious talks process – December 18th, just in time for the House of Parliament’s Christmas recess.
Yet for all the emphasis on the financial side, the elephant in the room – and indeed outside it, as articulated by the protesters who challenged the DUP leader Jeffrey Donaldson on the way into the meeting – was still only one question: Is the DUP going back in to Stormont?
Inside, the offer laid out was certainly aimed at encouraging that. Understood to be worth around £2.5 billion in “new money”, with a little more in redistributed funds, the UK government’s deal also involves reforming the funding model for Northern Ireland to include the setting of a new fiscal floor.
It will cover funding for public sector pay rises this year, and extend the current two-year deadline for paying back the Stormont overspend to five years.
A stabilising fund for the next four years would give the Executive access to additional funds, and, and London will also give Belfast the power to redirect money to the transformation of public services.
All this is contingent on not just a restored Stormont, but on the Executive taking forward new revenue-raising measures and on an increase on the regional rate of 15 per cent.
Even at a casual glance, it is easy to spot problems ahead. How, for example, to fund that public sector pay rise after year one, and how would the DUP – which needs a decent financial settlement to help sell a return to Stormont as a win for the party – spin it once larger, unpopular rates bills start arriving on voters’ doormats?
As the Ulster Unionist leader, Doug Beattie, put it, however “eye-watering” the figure, “the problem is what happens next year, the year after.”
Northern Ireland needs money – a lot of money – to cover a multimillion pound budgetary “black hole”, a pay deal for public sector workers and cash to fund the reform of public services, above all the struggling health service.
It “doesn’t even touch the surface of what is required,” said the Sinn Féin vice president and first minister designate, Michelle O’Neill.
“Not there yet at all,” said Social Democratic and Labour Party (SDLP) leader Colum Eastwood.
“Not sufficient to be able to resolve the issues,” said Naomi Long, the leader of Alliance.
Northern Ireland’s independent think-tank, Pivotal, agreed: “Overall the five measures are all things that have been requested but the total value looks much less than the amount needed.”
So where does that leave the key question, that of the DUP’s return to the political institutions?
“There is still some way to go,” was Donaldson’s assessment. “We will study what the government have said, our initial reaction is that it falls short of what is required.”
All will be studying the detail closely in the days ahead. Technical discussions will take place on Tuesday, and further talks between the parties and the Northern Secretary the day after.
[ Stormont parties called to talks on North’s finances in absence of executiveOpens in new window ]
Meeting the December 18th deadline would mean an Assembly recall next Monday. If this is to be met, then realistically the talking needs to be wrapped up on Wednesday, an ambitious deadline by anyone’s reckoning.
Now there is cash on the table, surely the temptation will be to view it not as a final offer from the UK government, but as an opening bid.
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