Are the Media just leading us further into the dark over Stormont’s finances?

Hugh McCloy, a contributor to this site, made the point after the Finance Minister’s Statement on Monday that there needs to be increasing public interest in what the Executive is doing with our money – and, note well, it is our money!

Again, however, we face the problem that our Mainstream Media are the best in the world at reporting events (including reporting atrocities from an impartial and sympathetic standpoint), but still have not adapted to the need to analyse political statements and standpoints.

Finance is the most obvious example of this. Every year, for example, your local paper will report how much will be spent on local road maintenance – but will not analyse whether this amount has increased or decreases or whether any such increases or decreases are reasonable or appropriate.

The failure to add value in this way is one reason newspapers, particularly at local level, are struggling (and arguably that sites like Slugger are thriving)! What is there in the recent Budget Statement to challenge?

Well, here are just a few highlights.

£150 million “extra spending”

Both main parties have pointed to the extra allocation of £150 million, as of that is something they should be thanked for! Their spin has been successful – the main headline on the BBC NI web site was precisely that – “£150 million extra spending”.

Firstly, there is no thought given the the size of that allocation. It sounds a significant amount but is, in fact, just 1.5% of Current Resource expenditure (i.e. the current, rather than capital, spending of the devolved Departments and some other Agencies), and only around 0.7% of all public spending in Northern Ireland.

It is not unwelcome, but it would have done no harm to report the context and scale.

Secondly, the extra allocation had nothing to do with the DUP and Sinn Féin. Most of it came from the Barnett Consequential resulting from an extra allocation by the UK Treasury of £1.7b to the NHS in England. The bulk of the remainder came from money left over due to not mitigating welfare reform.

This was not new money – it arose from money already pre-existing or from decisions of the UK Treasury.

Education “to benefit”

It was also prominently reported that Education in particular would benefit – receiving almost half the “extra” allocation. Who could oppose Education being well funded?

However, as noted above, most of the allocation arose from extra Health spending. Yet not a penny of the extra allocation is going the Health in Northern Ireland! This type of shortfall has consistently happened after “Barnett Consequentials” in both Scotland and Northern Ireland under devolution, meaning that where Health spending accounts for 22% of “regionally identifiable expenditure” in England, it now accounts for just 18% in Northern Ireland and Scotland. Surely that is worth a media challenge or two?!

“Lowest Household Taxes”

Another big piece of spin, particularly from the DUP, is that the Budget secures for Northern Ireland the lowest household taxes in the UK. This is a legitimate point, but it should not go without challenge because the obvious consequence is lower public spending.

Household taxes (rates, essentially) are £813 on average per household in Northern Ireland. They are close to double that elsewhere in the UK, where households also pay extra for water. Of course, on top of that, members of English households also pay for prescription charges, more for university tuition, and do not even enjoy the same free travel benefits.

It is worth bearing in mind also that despite our significantly lower GDP per head, high public sector wages and low household taxes combine to mean that after-housing consumption (i.e. spending per household – on everything from vehicles to dining out) is actually 4% higher in Northern Ireland than in England, and even more so versus Scotland or Wales.

Therefore the question should be raised: if we really need more money to bring down A&E waiting lists, skill up the unemployed youth or provide adequate childcare, we could raise it ourselves (contrary to what some local parties like to suggest).

Bringing household taxes to the level in Scotland (even then the lowest elsewhere in the UK), introducing water charges, putting tuition fees on a par with England and adding prescription charges while removing peak-time free travel would add around £1 billion (10%) our annual budget for devolved departments.

Since we are keen to look across the border to reduce Corporation Tax or even VAT, we could also do so to raise revenue – what about road tolls, public sector levies or bin charges, all of which are paid in the Republic?

As is clear from an earlier piece on Slugger, I do not advocate all of these personally, but it is worth a proper and informed public debate rather than meekly assuming that low household taxes are automatically a “good thing”.

20,000 jobs “slashed”

One of the most emotive headlines was the News Letter’s contention that 20,000 jobs would be “slashed” (a term which subsequently appeared elsewhere). This kind of emotive reporting really does not help, least of all when it is on a subject of such vital importance.

What is actually proposed is a “voluntary exit scheme”, whereby people would volunteer to be considered for a redundancy package, about which a few further things should be recorded.

Firstly, even if it does take 20,000 public sector workers, still only returns the public sector to the size it was at the time of the Belfast Agreement – when already it was accepted that it was “bloated”.

You cannot on one hand argue for re-balancing the economy and removing our “Communist” reliance on the public sector on one hand, and not then accept that that means it will have to be reduced in size on the other.

Secondly, there are very serious problems with the scheme as proposed, but these are missed among the emotive headlines. What happens if the scheme proves disproportionately attractive to some specialised work areas (say, finance or planning), and not to others which clearly are bloated but skills are less likely to transfer to other professional sectors at anything like the same pay grade (say, press officers or administrators)?

What happens if 20,000 people do not come forward, given that all budgetary assumptions are that they will?

Thirdly, by the way, where does the 20,000 figure come from anyway? How reliable is it? Who decided it and on what basis?

All these questions need to be asked. It would be helpful to a lot of people – not least public sector workers considering or concerned about their future – if they were.

“Problems need money”

Underlying all of this, of course, is the other automatic assumption (which the media make well beyond Northern Ireland) that spending more gets better results automatically.

This is odd, because we are quite clear that although the United States spends proportionately double the amount we do on Health, our system is better. Comparing any relevant indicator backs up that contention. Clearly, therefore, spending is not the solution if it is spent foolishly on a system or process which plainly does not work.

So why do we assume “more spending” is always the answer, when we are already clear about one obvious case where it is not?

Fundamentally the point is this: the media have a priority role in ensuring a proper public debate around finance and, in particular in a devolved context, that Ministers are challenged not on the amount of their spending (which is not really in their gift anyway once revenue levels have been set) but on the value of it.

When they claim they have “extra”, they need to be challenged on where it came from (it does not, after all, magically appear). When they expect plaudits for “benefitting” a particular area, they need to be challenged on what other area will be disadvantaged by that choice (after all, an allocation one way is a non-allocation another).

When they claim victory over “low taxes”, they need to be reminded that that deprives us of public spending (rightly or wrongly). When they put in place important schemes, they need to be challenged on the detail (to explain what planning has gone into the scheme and even what contingencies exist if all does not go exactly to plan).

If they are to have a role in the 21st century, mainstream media need to stop meekly reporting spin and instead deliver proper analysis with the objective of ensuring a proper and informed public debate. It is, after all, public spending!