Stormont talks: What about NI finances if there's no deal?

By John Campbell
BBC News NI Economics & Business Editor

Image caption, David Sterling will use emergency powers to release cash and resources to departments until a new budget is in place

The political crisis means that Stormont's finances have been under the control of a senior civil servant since the start of the financial year.

David Sterling had to step in because the executive failed to agree a budget.

Like his fellow officials he was hoping for a quick resolution to the crisis.

When he took charge he wrote to all Stormont departments stating that while he can keep cash flowing to public services that is "not a substitute for a budget agreed by an Executive".

What that means is that he is not going to make policy decisions, so instead of political direction there is drift.

That is a particular issue for the health service, where some major policy decisions on acute hospitals, elective surgery and GP services need to be made.

With the talks deadline now pushed out until the end of June, Mr Sterling will be operating these emergency procedures for at least another two months.

Policy drift

While it means policy drift, it should not cause any immediate administrative problems.

On the day he took charge Mr Sterling also told all Stormont departments what their spending limits would be for the next four months.

That takes us until the end of July, well beyond the talks deadline.

The legislation says that if no budget is in place by the end of July, Mr Sterling will only have the right to spend an amount equivalent to 95% of the 2016 budget across the whole of the 2017 financial year.

So, at that point, he would have to tell departments to plan for in-year cuts of at least 5%.

However, officials think it is improbable that the emergency situation will continue for that length of time.

If there is no deal among the Stormont parties in June the expectation is that the Secretary of State will move to impose a budget.

Mr Brokenshire has already taken a small degree of financial control when it comes to rates, the property tax paid by households and businesses.

Rates bills are made up of two elements, one set by councils (the district rate) and one set by Stormont (the regional rate).

The councils have set their part, but the executive has not set the regional rate meaning that bills could not calculated.

The secretary of state has now decided that the regional rate will increase in line with inflation and will bring legislation to Westminster on Monday to allow that to happen.

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