#StateofState “The billion pound deal negotiated by the DUP to support the Conservative Government was well designed”

This is the time of year Deloitte release their State of the State report which reviews the performance of the UK government and the devolved administrations. The report in its entirety can be read here. What I will focus in here is the findings from Northern Ireland.

Austerity

The report points out the general public tiredness with austerity by noting the following;

After the June 2017 general election, Chancellor Philip Hammond reflected that voters had become “weary of the long slog” of public spending cuts and as a result, many commentators heralded the end of austerity. The Chancellor’s assessment certainly reflects the sentiment in our citizen survey, which finds that the public’s attitude to austerity has hardened.

It goes on;

While Autumn Statement 2016 committed to greater capital spending, austerity is more concerned with spending on day-to-day administration and public services – and there is no indication that this spending is set to return to the levels of growth seen in the decade before the financial crisis.13 In fact, government departments are expected to come under particular pressure in 2019-20 when their resource budgets face the third steepest fall of any year since this austerity decade began.”

Of course, these spending plans may change. But if the government remains committed to eliminating the remaining £58.3 billion of its annual deficit, a blend of continued austerity and tax adjustments will almost certainly be required. OBR analysis suggests that if deficit elimination continues at the pace it is expected to be falling by 2021-22, the deficit will not be eliminated until 2025-26.

How does this feeling break down by region?

Northern Ireland actually translates (from this perception anyway) with the public feeling least hit by the various budget cuts implemented from Westminster than many other regions. This is probably due to some measures taken by the Executive to mitigate cuts in areas.

Collapse of the Executive

Responses from local interviews

A government without ministers is unprecedented for a major part of the UK, and the absence of executive decision-making could become increasingly apparent. Under legal advice, civil servants have continued to maintain government and press ahead on programmes in accordance with guidance from ministers when they were last in post. But increasingly, that guidance is becoming out of date. Civil servants may well be minded to stretch their mandated powers in the public interest, but could face judicial review for doing so. But many will be aware that as the months go on, policy decisions that require ministerial approval have not been taken. That could come at an opportunity cost for Northern Ireland, especially where public sector reform stagnates and decisions that could save money are not taken.

It goes on;

The next steps remain unclear. Direct rule from Westminster could restore budget mechanisms to the Executive and provide for ministerial decision-making. Several interviewees in our research considered that direct rule could well begin by the start of 2018, though some reflected on whether the existing devolution model may need to be rethought for a future Northern Ireland government.

Tory/DUP Deal

The billion pound deal negotiated by the DUP to support the Conservative government was well designed. Crucially, it splits investment in public services between funding to relieve immediate pressures and investment in transformation to continue reforms of the health and social care system.

Brexit

In Northern Ireland, as in the rest of the UK, the dangers of Brexit are at present more apparent than any benefits that could emerge. But as responsibilities are repatriated to the UK from the EU, there could be potential to strengthen Northern Ireland’s powers.

Economically, Northern Ireland has remained resilient in the face of the uncertainties that are inherent in Brexit. Its economic growth of 0.3 per cent in the first quarter of 2017 was higher than UK-wide growth and would put Northern Ireland’s annual growth at 2.4 per cent compared to the UK rate of 2 per cent.31 However, numerous factors – not least the border, the strong agri-food sector and high levels of EU funding – could make Northern Ireland’s economy particularly exposed to
Brexit uncertainties in the year ahead.

Overall, the report highlights public weariness with tougher economic times, however this is at odds with the governments priority to bring the deficit down. In a Northern Ireland context, what comes across is the uncertainty from no Executive, but there is praise for the DUP deal & how it is structured.

David McCann holds a PhD in North-South relations from University of Ulster. You can follow him on twitter @dmcbfs