Stormont Ministers allocate almost £700m to address Northern Ireland public sector pay dispute

Almost £700 million (€818 million) has been allocated by Stormont Ministers to address the public sector pay dispute in Northern Ireland.

Negotiations will now take place between individual departments and the relevant trade unions aimed at agreeing pay rises and ending strike action, which has brought widespread disruption to public services in the North.

The money is part of the £3.3 billion financial package awarded by the UK government to support the restoration of the powersharing institutions.

However, it is not clear if the funding will be enough to settle the public sector pay dispute, as it only covers the current 2023-24 financial year.

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The assistant general secretary of the trade union body Ictu, Gerry Murphy, said whether it was sufficient to settle all industrial disputes “will become clear as negotiations between individual unions and relevant departments commence”.

“While we welcome the prospect of settling disputes for this year, we are clear that public sector pay is not a one-off issue,” he said.

In total, more than £1 billion was allocated to Stormont departments on Thursday, with £380 million earmarked for overspends and immediate pressures. An additional £80 million was awarded for capital spending.

The Department of Health received £550 million to cover general pressures and pay costs, and the Department of Education £300 million.

Minister for Finance Caoimhe Archibald said each department had been provided with an allocation “based on current forecast of overspend and pay costs” and Ministers “will have the flexibility to make decisions to manage their own budgets, within this fixed funding envelope”.

Negotiations are continuing between Belfast and London over the terms of the £3.3 billion package and a new needs-based funding model for Northern Ireland.

Northern Ministers argue there needs to be sufficient and sustainable funding for public services and say they did not commit to revenue-raising measures as part of the deal, while the UK government insists Stormont must raise a minimum of £113 million.

In a report published on Thursday, the spending watchdog, the Northern Ireland Fiscal Council, warned Stormont faces a financial “cliff edge” in 2026-27 when the level of UK government support drops sharply.

The chair of the council, Robert Chote, said this was “presumably there to encourage the Executive to take decisive action on revenue-raising, budget savings and public service reforms – of which there is no immediate evidence as Stormont Ministers take their posts”.

He said “if the deal is to deliver sustainability, the Executive will need to take and implement tough decisions on revenue, spending and public service reform and some may question whether this is realistic to expect in the time available”.

Speaking to reporters following the announcement of the funding allocation on Thursday, First Minister Michelle O’Neill said: “We are united as an Executive in terms of the challenges that we have in advance of us, but also the need to ensure that we have a properly funded public service model.”

Deputy First Minister Emma Little-Pengelly said: “The people of Northern Ireland deserve public services that work for them and “the people who deliver those public services, our public servants, deserve fair pay.”

The Minister for Finance said the funding allocation would enable negotiations on a pay settlement to begin with trade unions “immediately” and she wanted to see them conclude as quickly as possible.

“I think it’s also a good signal coming from this Executive that we are working together to deliver for people in the most challenging of circumstances,” she said.

Additional reporting: – PA

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