Select Committee on Northern Ireland Affairs Fifth Report


14. It is a responsibility of the Secretary of State to secure Northern Ireland's share of public expenditure.[17] Northern Ireland Office witnesses told us that the Northern Ireland Block which existed during direct rule was split in preparation for devolution. Mrs Doreen Brown, Director of Resources, described the position in the following terms:[18]

"A decision was made on the quantum of resources which should go to the devolved administration as opposed with staying at the Northern Ireland Office and that took account of the needs which Northern Ireland departments were projecting and the views of the Government as to how that money might best be used to serve Northern Ireland as a whole. So the split between security funding and non-security funding was made on the basis of a very conscious decision about trying to get the right balance."

15. Whereas during the period of direct rule, the size of the whole of the Northern Ireland block had been determined through the Barnett formula,[19] on which we comment further below, the budget of the Northern Ireland Office itself for expenditure previously included in Vote 1, and now included in Requests for Resources 1 to 4, is a matter of negotiation with the Treasury;[20] the requirement is based on assessed needs. The Barnett formula continues to be the principal determinant of the public expenditure bids of the devolved Northern Ireland administration, and the Secretary of State is, in principle, not involved in the process.[21] The Northern Ireland Office is therefore in the position of being unable to provide details of what the relevant Estimates provision is intended to cover, beyond that included in the published Estimate, even though it accounts for the relevant expenditure.[22]

16. The Northern Ireland Office continues to account to the House for both sets of funds. In practice, the bulk of the expenditure is the grant to the Northern Ireland Consolidated Fund, as the table below shows:

  Provision for
Northern Ireland
Office (£ million)
Provision for
Northern Ireland
Departments (£ million)
2000-01 (Cash basis) :[23]
 Class XV, Vote 1
 Class XV, Vote 2
TOTAL CASH VOTE FOR 2000-01 8,557.7
2001-02 (Resource basis):[24]
 Requests for Resources 1-4
 Request for Resources 5

17. Under section 58 of the Northern Ireland Act, the Secretary of State is responsible for making payments into the Consolidated Fund for Northern Ireland. In practice, this process is a mechanical one, and no funds are received into, or withdrawn from, bank accounts of the Northern Ireland Office.[26] Mrs Brown described the role of the Northern Ireland Office in relation to the control of this expenditure as "very limited".[27]

18. From our point of view, the present position is somewhat unsatisfactory. The Secretary of State is responsible for securing Northern Ireland's share of public expenditure but, in respect of over 85 per cent of the total, his direct involvement is minimal, and only very limited information is available to this House. Likewise, we can in practice only exercise our own responsibilities to examine the expenditure of the Northern Ireland Office in respect of less than 15 per cent of the expenditure for which it is accountable to the House.

19. Decisions on expenditure from the Northern Ireland Consolidated Fund are properly a matter for the Northern Ireland Assembly and Northern Ireland Ministers and we have no desire to involve ourselves in these. However, on the information presently available to us, it is not possible for us to make a meaningful assessment of the overall success of the Secretary of State in securing the public expenditure resources which Northern Ireland needs. Neither do we have sufficient information on which to form a soundly based judgement on the proposed level of Supply to be granted to the Northern Ireland Consolidated Fund. Either the amount of available information needs to increase, or our responsibilities in relation to examination of Northern Ireland expenditure need to be modified to reflect the current realities. We shall be giving further consideration to this matter.

17  Ev. p. 5. Back

18  Q 48. Back

19  Q 50. Back

20  Q 48. Back

21  Ev. p. 6. See also Q 82 to 91. Back

22  Ev. p. 6. Back

23  Source: Spring Supplementary Estimates 2000-01, HC 256 (2000-01). Back

24  Source: Central Government Supply Estimates 2001-02, HC 348 (2000-01). Back

25  From 2001-02, Parliament authorises both the amount of resources which may be consumed as well as the associated amount of cash which may be spent. Accruals to cash adjustments mean that the overall net cash provision to be voted for this Estimate is £8,776.2 million. Back

26  Ev. p. 6. See also Q 74 to 78. Back

27  Q 73. Back

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