Written Ministerial Statement

The content of this written ministerial statement is as received at the time from the Minister. It has not been subject to the official reporting (Hansard) process.

Department of Finance - Interim Fiscal Framework

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Published on Tuesday 21 May 2024

Dr Archibald (The Minister of Finance): This statement updates Members on the Interim Fiscal Framework which has been signed today on behalf of the Executive securing a commitment from Treasury to review how the Executive is funded going forward.

The signing of the Interim Fiscal Framework is a significant and important early milestone as we work towards putting our finances onto a more sustainable footing.

Following intensive and constructive negotiations with the Treasury and approval from the Executive, this agreement marks substantial progress on the position within the financial package, with a firm commitment to review the Executive’s funding before the cliff edge in 2026-27.

Importantly it also recognises the Executive will continue to plan on the assumption that it will be funded at or above the 124% level of relative need in future financial years.

In addition, Treasury has agreed to the 124% needs-based adjustment factor being applied from the date of restoration of the Executive. This means some £24 million from the Spring Budget Barnett consequentials will now be available for allocation as part of the upcoming June monitoring round. Any future Barnett in 2024-25 will be at this increased level meaning additional funding for public services.

The Treasury has also agreed to consider a review of the Executive’s relative need if multiple independent and credible sources provide evidence that relative need is different to 124%.

The publication of the Interim Fiscal Framework includes the scope and structure of the Sustainability Plan which will be published by August 2024.

Also included is the scope of a Strategic Infrastructure Plan which was also a condition in the financial package. The development of these plans will be an important step towards sustainable finances.

This framework which has been secured at pace is a step towards a full fiscal framework which exists in the other Devolved Administrations and is critical for long term sustainability.

Work will now commence towards on a final Fiscal Framework to ensures the Executive has the financial tools and necessary taxation levers to deliver sustainable public finances and public services.

I have been clear since taking up the role of Finance Minister of my determination to have our finances put on a sustainable footing.This job of work is far from over.

The budgetary position facing the Executive remains incredibly challenging. I have been and will continue making the case for increased levels of funding in public services.

The Interim Fiscal Framework also sees the establishment of a Joint Exchequer Committee which formalises the arrangements for discussions on the wider final Fiscal Framework.

A copy of the Interim Fiscal Framework is attached at Annex A for information.