The Sustainability Fund and the
75. We heard criticism of the Government's
proposal to return the revenues through the Sustainability Fund.
The UK-wide Fund has been set initially at a level of £35
76. We understand that money from the Fund will be
allocated to the devolved governments using the Barnett Formula.
Under this formula Northern Ireland would receive between 2.4
- 3 per cent of the fund; in monetary terms, about £1 million.
Witnesses believed that this was unfair, and that the return should
better reflect Northern Ireland's 10 per cent contribution to
UK aggregates production, and consequently to the levy.
Given the compelling evidence we have received about the likely
effect of the levy on local communities and local economies, we
are sympathetic to our witnesses' arguments on regional fiscal
77. We asked the Financial Secretary to consider
a region-by-region allocation of the Fund as an alternative to
distribution through the Barnett Formula. He confirmed that the
levy was intended to be "revenue neutral across the whole
of the United Kingdom"
and told us that he believed it was not "in anyone's best
interests to undermine" the Barnett Formula or take the decisions
on spending the money from the devolved administrations.
78. We pursued the matter further, asking the Minister
if he found it satisfactory that the allocation of the Fund through
the Barnett Formula would, in effect, make Northern Ireland pay
twice in comparison to other regions. His answer was oblique:
"What one says about
the Sustainability Fund is that it is designed or predicated on
the basis the Barnett Formula would be applied in order to distribute
it. If it were to be structured in another way it would have another
effect. I hear what the Committee says ..."
79. The Financial Secretary appeared to us to hold
out some hope for a change in the organisation of the Fund, conceding
that he noted our point and:
"It would be interesting
to look, and I have not, at a theoretical model of the Fund. If
it was designed in such a way as to distribute the Fund in proportion
to the amount that each of the constituent parts of the United
Kingdom contributed to aggregates, I would be interested to see
what the impact would be".
We hope that, now we have prompted the thought, the
Minister will follow this through.
80. We believe that since the rate of the levy was
set on the basis of local environmental costs it is only appropriate
that the return of the revenue should in some meaningful degree
reflect and restore these local contributions. We further believe
that it is particularly necessary for Northern Ireland to receive
a significant proportion of the Fund since, given the presence
of the border, additional incentives will so patently be required
to achieve the levy's original purpose.