David Sterling, head of the Northern Ireland Civil Service, has defended his decision to put off spending the majority of the £1bn pledged under a “confidence and supply” deal agreed between the Democratic Unionist Party and the Conservatives in exchange for DUP supporting Theresa May’s minority government.
With a new round of talks aimed at restoring a power-sharing agreement in Northern Ireland due to start today, Sterling told MPs it was “unacceptable” that the country had been without an executive for a year and that public services were suffering as a result.
The power-sharing arrangement between DUP and Sinn Féin broke down following a disagreement last January, and the civil service took control of public spending in March.
Sterling said the civil service had done its best to “keep the wheels of government in motion” but that some decisions required ministerial direction, including the allocation of funds from the £1bn pot, of which only £20m has been drawn down so far.
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The £1bn has been allocated to five sectors, and the £20m was part of £50m available immediately to be spent on pressures facing health and education.
Explaining his decision to MPs on the Commons’ Northern Ireland Committee, Sterling said: “Our conclusion was that the pressures faced in both those sectors next year was of a different order of magnitude and that therefore we would not draw down the full £50m this year.”
Instead it was agreed with the Treasury that the other £30m would be drawn down in the next financial year. Sterling said work was underway to agree the “sensible spend of the other monies”, but that this work was being hampered by the absence of ministers.
On the £150m available over the next two years for broadband, for example, decisions needed to be taken as to the split in allocation of funds between business and domestic, and rural and urban.
“There are quite significant issues where it would be improper for civil servants to be deciding on the allocation of that resource,” said Sterling. “There are policy issues which only ministers can determine.”
However, Ian Paisley, a DUP MP and member of the committee, criticised what he described as a “reluctance to spend the money” and likened the explanation to something he might hear from “Sir Humphrey” of Yes Minister.
“The public don’t understand why this money isn’t being allocated and spent,” he said. “There are no strings on it. It’s a bonus. You’ve won the lottery – please spend the money.”
Hugh Widdis, permanent secretary of the Department for Finance, Northern Ireland Executive, told the committee that departments cannot lawfully spend money until it is appropriated to them.
“So the mere fact that it’s in the confidence and supply document is not enough, it’ll have to be appropriated in Parliament first and it will have to be appropriated in Northern Ireland,” he said.
He added that while the £1bn was in addition to annual spending, its appropriation cannot be done until a budget is set for Northern Ireland as a whole.
Sterling confirmed that he had advised the secretary of state for Northern Ireland, Karen Bradley, that the “major issue we face is that we don’t have a budget from the beginning of April”.
Chancellor Philip Hammond's Autumn Budget has already set out the spending allocations for England’s for the 2018-19 financial year, while the devolved administrations of Scotland and Wales have also set out spending plans.
Sterling added that it would make things “incredibly difficult” for the civil service if a budget is not set by 8 February and that, as a minimum, departments would need clarity from Bradley about their budget allocations at this point.
He also said there would be around 500 pieces of legislation to process on the back of the EU Withdrawal Bill, many of which will require “regulations by affirmative resolution which will require a resolution by the [Northern Ireland] Assembly”. He said he would be advising Bradley that, in the absence of an executive, essential legislation should be taken through Parliament in Westminster.
Bradley has stated that this week’s talks represent one last opportunity to restore the power-sharing deal between DUP and Sinn Féin. Failure could result in a return of direct rule from Westminster in Northern Ireland.
Stirling also told MPs that there was a “sense of frustration” among civil servants. “I think it’s unacceptable the position we find ourselves in, and it doesn’t become any more acceptable with the passage of time,” he said. “I never thought we could survive this long.”