Less spotted deal provisions – ‘Fiscal Council’

Lesser spotted deal provisions can be interesting when picking apart a new political settlement, especially as the underlying funds threaten to pick it apart anyway. It has been commented upon that this is a good deal, indeed Newton Emerson used more colourful language in describing the “identitarians” who would turn down this deal. Possibly extra cash, difficult issues ‘oven ready’ to be dealt with and significant changes to the cultural policy of our public institutions here. I would have liked to have seen more in the way of PoC reform, there is no legal mechanism to deal with its use but for it to actually be compromise then it should please none of us.

Brian Walker expertly picked apart the entire deal here. What I picked up on as a win for responsible governance here was the commitment to establishing a “fiscal council”, which is mentioned scantly in the agreement text. First under the auspices of ‘Transparency, accountability and the functioning of the Executive:’

  1. establishment of a fiscal council which would assess and report on the sustainability of the Executive’s finances and spending proposals.

Read in conjunction with the other proposals in this section of the agreement it is clear that the UK and Irish governments were not comfortable with the competence of how our institutions were run in the last administration (see RHI). What other state in the world (moreover the western world) would require basic ethical principles such as ministerial gifts being included in a government deal?

But there it was, along with what you would expect to be the bread and butter of every civil servant time immemorial; taking minutes and recording meetings. The whole section is as follows:

  1. Ministers and civil servants, including special advisers, each have a part to play in rebuilding the trust of citizens in the operation of a future administration. The parties reaffirm their commitment to greater transparency and improved governance arrangements that are aimed at securing and maintaining public confidence. This is particularly important in light of the public inquiry into the RHI scheme.
  2. The parties have therefore agreed to an ambitious package of measures to strengthen transparency and governance arrangements in the Assembly and Executive in line with international best practice. The Executive will, as a matter of urgency, produce strengthened drafts of the ministerial, civil service and special adviser codes, to be implemented immediately. 5. The measures agreed here include:
  3. making clear the accountability of Ministers to the Assembly;
  4. strengthening Ministers’ responsibility for their special advisers;
  5. publishing details of Ministers’ meetings with external organisations;
  6. publishing details of gifts and hospitality received by special advisers,

meetings with external organisations, and pay;

  1. strengthening requirements for record-keeping and the protections for

whistleblowers;

I for one would like to see this new fiscal council become a commission for public finances. To achieve this status and make a lasting impact, it would need to fiercely and independently report on the ongoing state of our public finances (including the hot potatoes, i.e. water rates). Accurate figures on the costs of segregation, the cost of underinvestment and its longer term cost expectations, and the adoption of a statutory procedure that each policy would be benchmarked against as part of a government wide 10 to 20 year plan on reducing fiscal dependence. For such a business case to be approved it should have a full cost/benefit analysis and get points for being a revenue raising initiative.

The proposal has been included in the Stormont House and Fresh Start agreements but not fulfilled by previous administrations. In 2015, then finance minister, Arlene Foster explained to the assembly that the planned Fiscal Council would be:

“…set up with probably a small membership. I imagine that it will be made up of around three or four people with expertise in the area.

…its terms of reference have to be agreed with Her Majesty’s Treasury, but that will be done in conjunction with my Department.”

It will be interesting to see if it is set up by the HM government deadline (July 2020) whether it will have this consultative role with the Department and wider executive or whether it will sit as more of an ombudsman style body. The Office for Budget Responsibility comparisons were not endorsed by the minster at the time of the above assembly questions, but after RHI the Treasury might be keener to see it set up in the OBR format.

With all the wrangling and horse trading over a financial injection from the Treasury, fiscal policy has crept quickly up the agenda. Sadly, unlike other places, it never creeps up the agenda before election time which is a collective failure of all parties. But the message of this week which has resounded loud and clear is thus; NI must pay its way and take some fiscal responsibility!


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