Pressure from the cuts – the big incentive to learn how to govern?

With less than four weeks to go, the Hearts and Minds round table clearly shows the distance the Assembly rank and file have to travel before they come to terms with the cuts of the comprehensive spending review. Without a co-ordinated joined up approach by the whole Executive,  Sammy Wilson can do little except forecast gloom and doom. As I know from my contacts elsewhere, NI politicians are regarded as living on a different planet.

We can nevertheless guess at the shape of the issues that preoccupy the civil service.

The block grant shaped by the Barnett formula will survive the downturn for some time yet, despite longer term reform for Scotland and Wales.

NI will continue to argue for exceptional treatment on grounds of its remoteness, demography and the supposed threats to stability. This may prompt a further pause for reflection but it is hard to see how it translates into a winning formula. The big question is whether the Treasury will regard the public sector as too big to fail, or dump another 40 000 onto welfare, or back some job shedding along with a pay freeze.

Owen Paterson will lose a battle to create a special economic zone with lower corporation tax any time soon, in the face of unanimous objections from all parts of GB. This makes sense only if it puts NI on a fast road to a united Ireland. In the meantime the Executive would have to make up an extra £250 million in lost revenue.

Victor Hewitt’s slipped-in argument for cuts based on output rather than Barnett inputs is doing the rounds elsewhere ( see, Can A Deal Be Done?). Cuts based on lower tax receipts and allowing the Executive to keep some efficiency savings would reduce their impact while increasing the incentive to make further efficiencies.

Pressure for leaner, smaller government and the deferred councils reform should prove irresistible and must not be compromised by manoeuvring to try to cheat SF out of their fair share of power.

Structural inefficiencies connected with political power plays which have nothing to do with law and order like too many surplus school places and surplus A&E capacity in Belfast must now be tackled.

The Executive must end populist measures like the rates freeze and water charges exemptions. They can also raise capital by public assets sell- offs of Belfast Port and parts of the Housing Executive stock when the prices are right.

Close supervision from Whitehall will continue through the downturn until the Executive members learn how to govern. If the lesson is learned, it could be the silver lining in the dark clouds of the comprehensive spending review. If the cuts don’t make them learn,  I don’t  know what will.