Labour ‘shambles’ set to delay new Treasury financial offer to Stormont – O’Dowd

The “shambles” unfolding within the UK Government has derailed expectation of an imminent new Treasury financial offer to Stormont, the Finance Minister has said.

John O’Dowd said he had been hoping negotiations with London would have concluded by next week with the delivery of a “proper funding package” for Northern Ireland.

The minister told the Assembly that timeline was now in doubt over events around the Labour leadership and Sir Keir Starmer’s resignation as Prime Minister.

Devolved ministers in Northern Ireland have yet to agree a budget for the current financial year, insisting they need more financial support from the Treasury to plug an estimated £1 billion hole in their balance sheet and deliver spending plans that avoid dramatic cuts to public services.

Discussions with the Northern Ireland Office and the Treasury have been ongoing and Mr O’Dowd said “intense engagement” on the issue had been scheduled for this week.

“Unfortunately, I have to say that this is part of the shambles of having to deal with Westminster, I expected and indeed was scheduled to have intense engagements with the British Government this week around the very need for the Executive to be funded on a firm and sustainable basis,” the minister told MLAs.

“Unfortunately, we’ve seen the issue of the Prime Minister standing down again in Downing Street, which I suspect is going to delay that engagement, or certainly have an impact on that engagement in some way, or delay it in some way.

“I would have hoped if not by the end of this week, but certainly by next week, we would be reaching some sort of conclusion in relation to an offer from the Government, a proper funding package being put in place, and then me being able to bring a further draft of a budget to the Executive for discussion on future agreement.

“We’re not in that position as a result of antics elsewhere.”

Mr O’Dowd was commenting during a debate on the lack of 2026/27 budget tabled by the SDLP at Stormont.

Opposition leader and SDLP MLA Matthew O’Toole said he agreed that there was a need for ministers to press the Government for more money but he said it was still not acceptable for the Executive to have failed to set a budget for the current financial year.

He highlighted that in the absence of a budget ministers would only able to draw down 95% of the money they had spent the previous year.

He said that would equate to a further £1 billion cut to public services across the year – adding to the £1 billion shortfall ministers were already voicing concern about.

“I do want to state the point firmly and clearly – it is absurd and unacceptable for a devolved government to simply refuse to set a budget,” he said.

Mr O’Toole added: “You can’t say on the one hand that the UK Government isn’t giving us enough money – and the Executive has more than a point when they say that – but on the other hand say our reaction to that is to cut our own budget even further, to cut off our noses to spite our face, to cut our budget by 5% because we don’t like the budget settlement that we have.”

Mr O’Dowd rejected Mr O’Toole’s argument.

He noted that the SDLP agreed that the Executive was right to “push and engage” with the Government on securing more funding.

The minister added: “Then it seems an ill-thought-out concept, or an ill thought-out argument, to come into the chamber with your original motion and call on the Executive to finalise the budget ahead of any conclusions of discussions with the British Government.”