A Fresh Start: How does it add up?

From the BBC Economics Editor, John Campbell, Here is a brilliant cost analysis of just how the figures add up.

How does the £500m add up?

Most of the new money is dedicated to issues that are Northern Ireland specific.

A total of £188m will be made available for security-related spending.

The PSNI will get an unconditional £160m over the next five years to tackle dissident republicans and other paramilitaries.

A further £25m will be released if the executive comes up with matched funding from its own resources.

The remaining £3m relates to the cost of establishing a new monitoring and implementation body.

‘Shared future’ cross-community issues will benefit from an additional £60m over five years.

Some of this money will go towards projects aimed at leading to the removal of Belfast’s ‘peace walls’.

Losses

There will be £125m for the Social Security Agency to tackle fraud and error.

But here is where the final number becomes a bit less certain.

The assumption is that the investment will allow the Social Security Agency to detect up to £300m of additional fraud and error over the next five years.

Stormont will be allowed to keep half of that money.

In the last financial year, the Social Security Agency detected losses of £17.4m from official error, £9.3m from customer error and £25.2m in customer fraud.

That’s a total of £51.9m .

So the assumption is that the new investment will increase detection of fraud and error by more than 100% per year.

The politicians seem confident that is achievable but if it isn’t the financial package could come up short.

The other thing to bear in mind is that the DUP and Sinn Féin have decided they will fund measures to mitigate the impact of welfare reform.

Those mitigating measures will remove £585m from departmental spending – more than is being gained in this financial package.

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  • Zig70

    I’d be sneering of any agreement that doesn’t reduce the size, cost and overpay of the current administration but I’m a big fan of the A5 project and opening up the west.

  • Kevin Breslin

    This does reduce the size, cost and overpay of the current welfare administration … but in phases. Cut and Slash route to parity would leave Northern Irish welfare claimants in a far worse situation than counterparts in Britain.

  • Rosemarie Donnelly Shields

    So you are happy – with a little piece of the A5?

  • murdockp

    if they really are up for growing up the economy opening up the east and building a link to uk should have been a greater priority.

  • 23×7

    And how’s that been going the last 40 years?

  • 23×7

    The A5 improvement really is a no brainer (as is improving the link between Derry and Belfast) unless you think we are all going to stop driving.

  • chrisjones2

    “So the assumption is that the new investment will increase detection of fraud and error by more than 100% per year.”

    ….but we are continually told that the levels of fraud and error are very low?

  • chrisjones2

    Very well.The UK is Ireland’s biggest customer

  • chrisjones2

    David

    Thanks for this but its also the big picture that counts and that is one of utter abject failure to negotiate a deal and of the British and Irish Governments conniving to exclude all but the DUP and SF

    A lost opportunity for real reform that betrays all our futures. .

  • Neil

    Of 5.6 billion they currently detect around 300 million over 5 years in fraud. So 60 million as a proportion of 5,600 million (a shade over 1% of the overall bill) is indeed a tiny level.

    They are aiming to find double that, 120 million out of 5.6 billion or 2.1%. According to DWP figures fraud and error make up 2.1% of the welfare bill so effectively they are planning on detecting all fraud and error in NI.

  • Greenflag 2

    Yes but not as it once was . As late as 1970 the UK took 90% plus of the Irish Republic’s exports . The UK now accounts for about 15% . The UK actually has a trade surplus with the Republic in 2013 about 5 billion dollars

    . http://atlas.media.mit.edu/en/profile/country/irl/

  • murdockp

    The official figures say fraud is low. society knows it is high but is afraid to speak out due to political correctness.

    Come to Newry where most of the local population has a company DLA car.

    Go visit your local car dealership and look at the motability banner advertising. They have literally stopped marketing to normal people who work so highly profitable are the motability sales.

    The place is out of control with welfare fraud.

  • murdockp

    Irish exports to UK are €1bn a week and counting.

    50% of all Irish food exported to UK.

    Our population needs reeducated in economics.

  • Kevin Breslin

    You’re right, if more people used their prejudices like you we could completely ignore any crack down on welfare fraud and error and use our imaginations instead of evidence.

    We could also save loads in healthcare instead of spending lots of money on expensive radiotherapy, let’s imagine someone has something that can be treated with a glass of water like the homeopaths do.

    Someone gets shot in the street, we’ll imagine it’s a straight forward suicide.

    Educational underachievement, we can imagine they’re all great footballers and artists.

    Imagination offers a great alternative to action in every situation imag… well you know what I mean … if you don’t well you can imagine what I’m saying.

  • Kevin Breslin

    They’ve done studies. No fixed line link between Ireland and Britain is financially justifiable, the figures don’t add up they’d provide a better alternative to the ferries and airports we have now.

  • mac tire

    “The official figures say fraud is low. society knows it is high but is afraid to speak out due to political correctness.”

    Nonsense! Provide us with your figures.

    “Come to Newry where most of the local population has a company DLA car.”

    A scurrilous accusation about the people of Newry. You’ll no doubt prove me wrong by providing evidence of this also.

    “normal people who work”

    Only ‘normal people’ work? Those who aren’t or cannot aren’t ‘normal’? C’mon, out with it! What do you REALLY mean here?

    “The place is out of control with welfare fraud.”

    More generalised nonsense, with not a shred of evidence to back up your claims.

    Is this still Slugger or the Daily Mail comments section?

  • Kevin Breslin

    Northern Ireland is a net exporter in food too. It will have to import more if the UK leave EU and CAP.

  • Kevin Breslin

    Those mitigating measures will remove £585m from departmental spending – more than is being gained in this financial package.

    Explain how welfare is non-departmental?

    Should taxpayers be entitled to no social security at all then?

  • Reader

    It would be cheaper for the UK to subsidise Northern Ireland agriculture outside the EU instead of CAPing Northern Ireland and France inside the EU.
    I’ll be voting to stay in the EU. However, it won’t be on the basis of the sort of argument you just made.

  • Kevin Breslin

    I’m not sure about that:

    1, Currently the UK funds one area of agriculture/rural development and that is English Woodlands … agricultural subsidies are completely EU. An equivalent system to administer funds would have to be funded ab initio. It may be a relatively minor cost, but it would be a cost it’s not paying now.

    2. The UK is rebated to make the difference on CAP, it is also the 5th largest claimant despite agriculture accounting for only something like 2% of its GDP . The higher claimants of CAP subsidy such as France and Italy pay more towards the rebate.

    3. Outside the EU, the rebate would return to their own governments or to CAP. So while the UK would get some return on its net contribution, the agricultural nations of Europe competing against them would get returns on the rebate. The Republic of Ireland would get twice more in a “rebate on the UK rebate” than Northern Ireland would’ve got through CAP.

    4. The Swiss and Norwegians fund over half the income of their farmers as part of the European Free Trade Association, in the UK EU CAP subsidies produce a mere third of the income. The UK will adopt a similar position to these countries should it leave the EU or CAP, but there is no evidence of making savings to the government in a European agricultural market outside of a big bloc arrangement such as the EU or Russia simply by any competitive advantage acquired by the absence of EU trade tariffs. Russia would still block UK imports unless the UK ends sanctions against it, which would not only go against the EU, but NATO allies Norway (a possible non EU FTA partner) and the US who are also sanctioned by Russia.

    5. The highest costs of EU subvention are in Western Europe, not in Eastern Europe with a lower cost of supply, yet even these Eastern European countries pay towards the UK rebate, the argument that UK is over-subsidizing the East given this and given 2) as well seems not to take account of this. Nor any competitive advantages from trade such as the ease of importing cheap grain from Romania for cattle farms in England.

    6. No one has been more determined to cut the CAP budget more than the GB political parties and they’ve been successful to some extent. Farmers represent a low percentage of the electorate and the economy of the UK than they do in Europe, their democratic clout as an industry would be substantially reduced.

  • Skibo

    £300m over 5 years is £60m per year. £51.9m in the last year does not need a 100% increase but an increase of 16%.

  • OneNI

    Statistically you are probably right! But how will it FEEL in working class (loyalist and republican) areas?

  • Greenflag 2

    Second biggest after the USA and just ahead of Belgium & Luxembourg -then Germany & France etc