Stormont holds out for more London money but any deal will have strings attached, says former top civil servant

Experience over the past 25 years in Northern Ireland has made it clear “there is always money to sweeten” political deals, says David Sterling, former head of the Northern Ireland Civil Service.

Now retired two years ago and looking on at the negotiations to restore the Stormont institutions, there are few who know more about the difficulties facing those in charge of the public purse strings.

For months, Northern Ireland Secretary Chris Heaton-Harris and his deputy, Steve Baker, insisted no more money was possible as part of a deal to restore Stormont.

Few believed them, and, on Monday, the parties were offered a £2.5 billion (€2.9 billion) deal over five years, one that would write off nearly £600 million of past overspending and provide money for public pay rises and guarantees about future budgets.

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For now, the North’s political parties, which disagree on everything else, are united in arguing it is not enough, seeking further concessions before the House of Commons breaks for Christmas on Tuesday, an important deadline in the matter.

Collectively the Stormont parties have an opportunity to secure more, so Sinn Féin, despite its language suggesting otherwise, recognises that the Democratic Unionist Party’s obstinacy has advantages.

[ NI parties to press UK government to increase Stormont financial package ]

Undoubtedly, a London cheque is needed, given the increasingly perilous state of Northern Ireland’s finances. However, money, no matter how much, will not on its own solve the problems that exist, including the longest health waiting lists in the United Kingdom, among other unwelcome rankings. Reform is needed, and lots of it.

Speaking against a background of Christmas music in the Grand Central Hotel in Belfast, Sterling lists past financial crises in 2010, 2014 and one that led to the New Decade, New Approach deal in January 2020 that restored the Northern Ireland Executive after a three-year hiatus.

The current crisis is “worse than at any time in the last 20 years”, he says. Not everything, though, can be laid at London’s door. Civil servants in Cardiff and Edinburgh face similar challenges: “What is worse here is that we have had no ministerial direction for 4½ years out of the last seven.”

“So things that could have been done to ease the pressures haven’t been done,” says Sterling, regretting the lack of “transformative actions” in health, education, justice, and infrastructure.

The roadmaps are already there. In 2016 experts led by Prof Rafael Bengoa, a former Basque Country minister and World Health Organisation veteran, urged the reconfiguration of Northern Ireland’s health services, including the creation of centres of excellence.

Such phrases are nearly always interpreted by local communities, however, as meaning the closure or downgrading of much-loved services.

“So you might have had stroke services in more than 10 locations when the clinicians’ view is that if you reduce to, say, three, four, or a maximum of five, you will provide better service. That means that you need to stop doing [some] things. That is always politically difficult,” says Sterling.

However, the question remains whether Stormont politicians would or could take the hard steps required, even if a pre-Christmas deal were to be agreed.

“That is a really good question. If I am being entirely honest, I haven’t seen a lot of evidence over the last decades that local ministers are prepared to do these difficult things,” says Sterling, who is now a governor of The Irish Times Trust.

History offers little hope that they will be prepared now.

Recalling a conversation with a former education minister, Sterling says: “When I said these sorts of things, he said to me: ‘David, that’s all very well, but when I’ve had to close a school, I haven’t seen many people standing behind me.’

“The people who feel they have lost something will always shout louder rather than others. Quite often, service improvement isn’t immediate. Their voice drowns out everybody else,” he says.

A consultant friend said recently: ‘We don’t have a health service any more. We have an emergency service where if something bad happens to you, you will get good care’

—  David Sterling

Such actions, however, cannot be long delayed. Speaking ahead of the latest Hillsborough talks, Sterling is blunt about the challenges looming in coming years, given that the health budget already consumes just over half of all public spending.

“Just to put this in perspective, 20 years ago, the health budget consumed 40 per cent of the total money available to the Executive. It’s now 51 per cent. That gives a sense of the challenge.

“Just to stand still, it needs to increase somewhere by between 5 and 10 per cent a year,” he says, noting the reduction in average age brought to the Republic by recent immigrants.

“Northern Ireland is ageing more rapidly than the rest of the United Kingdom,” he says. “We wouldn’t have the same level of immigration. That means our population is ageing more quickly.”

He says Northern Ireland has 27 people over 65 for every 100 of working age. By 2042 this will rise to 42 people aged over 65 for every 100 people working.

“Which is the blink of an eye – 2003 seems like yesterday to me. Why is this important? Once people hit 65, their consumption of health services rises. Once they hit 85, it rises exponentially.”

Public faith in the quality of public services has declined rapidly over the past decade, so much so that it often now forms part of comedy routines on local TV stations.

“We have got the longest waiting lists in the UK. One in 10 are waiting longer than a year for a first consultant appointment. It’s very difficult for people to get an appointment with a GP,” he says.

“It’s very difficult to get signed up with a dentist. A consultant friend said recently: ‘We don’t have a health service any more. We have an emergency service where if something bad happens to you, you will get good care.’”

[ Is London’s offer enough to get the DUP back in to Stormont? ]

Elements of the UK government’s Hillsborough offer will help, including a so-called “fiscal floor,” where Northern Ireland will be guaranteed a treasury budget that is proportionally larger than the one enjoyed by people in England.

“We are largely rural. We have got a legacy of the Troubles. We have got an ageing population. There are factors here that create higher demand for public expenditure. That’s always been accepted,” says Sterling.

Having that guaranteed annually, however, would help, but it still would not close the gap facing Stormont Ministers if, and when they return, or British ministers if direct rule were to return.

Household and business rates will increase under the Hillsborough deal, but Northern Ireland still does not levy water charges, unlike elsewhere in the United Kingdom.

“By not collecting a water charge, the Executive is taking £350 million from its budget to give to Northern Ireland Water,” he says, noting also Northern Ireland’s free prescriptions, higher welfare and lower student fee measures costing £650 million.

“The treasury view is: why should English taxpayers pay more when they can point to places like in the northeast of England where levels of deprivation are every bit as bad as here.”

In the past, the treasury had its arm twisted by a Downing Street desperate to agree a succession of deals: “The parties here always agreed that there is a need for more money. They may not agree on anything else.”

Hopeful that a deal can be struck, and that it can work, Sterling argues, however, that the treasury and Downing Street cannot turn their eyes away this time from Stormont if and when the Executive is back up and running.

“Some of the mistakes in the past like, for example, in 2020 when New Decade, New Approach was agreed, you got the sense in Whitehall that they went: “Phew, that’s a relief.’

If a deal is done in coming days, then London, “probably with support from the Irish Government”, will have to pay much more attention to the way Stormont spends its money, says Sterling.

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