Last week, Sinn Féin’s Stormont Finance Minister Caoimhe Archibald
published the Executive’s draft budget for the fiscal year 2024-2025. It
may have been late in coming but it was every bit as bad as has been
forecast by Militant Left. The draft budget confirms that the Stormont
parties, lead by Sinn Féin, are content to administrate brutal austerity
on public services in the north of Ireland by working within the fiscal
framework set out by the Tory party in London.
The Executive was only re-established in February of this year as a
result of the colossal social pressures generated on the parties by the
wave of strike action taken by public sector workers fighting for a cost
of living pay increase. Given a wider political context, which includes
the current crisis in the DUP resulting from their party leader being
charged with historic allegations of rape and sexual assault, the
imposition of such a brutal budget raises the possibility that the
Executive will be destabilised within months of re-establishment.
The Barnett formula squeeze of public finances
At root, the difficulty facing the Executive parties is driven by the
inadequacy of the money allocated to the north by the Treasury to meet
the costs of public services here. The funding provided is determined
through the ‘Barnett formula’ which is designed to over time reduce per
capita spending in Scotland, Wales and Northern Ireland to the per
capita rate in England. The negotiations which led to the
re-establishment of Stormont saw a commitment from the Westminster
government that in future the Barnett formula would include a minimum
floor for additional funding for Northern Ireland to be provided at a
per-capita rate 24% above that in England. This was provided in order
to reflect the higher objective social need existing in Northern Ireland
and was accepted by all the parties.
The problem for the Stormont Executive is that the application of this
‘needs-based’ funding formula only affects new and additional funds and
the real benefit will only be felt in future years. A second difficulty
is that the floor is not backdated which means that the Executive
inherits a debt of more than half a billion from budget overruns
resulting from being underfunded for the last two years. A third issue
is that the Executive argues – although this is contended by the
Treasury – that the true measure of social need in the region should be
27 cent higher than England. While that 3% difference doesn’t seem much
– if it was adopted, it would make a huge impact to the current budget –
worth more than half a billion pounds a year.
In the meantime however there is a large gap in the budget but as a
further sweetener to return to power-sharing institutions, the Tories
provided an additional funding package worth £3.3 billion to the
Executive. This was one-off money and included money for public sector
pay in 2023-2024 as well as a write-off of outstanding debt on condition
that the Executive parties raise £113 million extra through ‘revenue
raising’ measures i.e. taxes or charges equivalent to a 15% rates increase.
While the parties moved quickly to extend the pay parity increase for
public sector workers, they have refused to introduce ‘revenue raising’
measures either through a rates hike or imposing a distinct water charge
– primarily from fear of a reaction from the public.
Budget pressures
The one-off money provided by the Tories was only enough to provide
public sector workers in the north the same meagre increases received by
workers in England and Wales. Indeed, the need to consolidate these
increases into departmental budgets in the future was a key factor in
determining the budget.
Ahead of the budget the Finance Minister stated that after pre-committed
funding was allocated, there was only £1 billion free whereas the total
‘bids’ for extra money from the departments totalled £3 billion. One
billion extra was sought by the Department of Health – half of that to
cover the cost of consolidating the last year’s pay increase with the
remainder to pay for additional services to meet increasing demand as
well as initiatives to reduce the ballooning waiting lists.
The Ulster Unionist Health Minister Robin Swann indicated that while he
had requested a billion pounds extra, his department could get by if it
received £800 million. In the event health received only £500 million
extra – an outcome that resulted in the Minister voting against the
budget in a public protest – an unprecedented move within the Executive,
which is meant to adopt collective responsibility for administering
neoliberal budgets.
Socialist trade union leaders have called on Minister Swann to run a
‘needs-based’ budget and breach the budget – a course that would bring
to a head the chronic underfunding of health services but it is unclear
whether such advice will be taken. One alternative is that the UUP will
withdraw from the Executive and join the SDLP in opposition.
Overall the bulk of the budget appears to have allocated to consolidate
the cost of the last year’s public sector pay increase for the future.
This is the only course open to avoid legal contractual liabilities but
implies that there is virtually nothing left for a pay increase in the
coming year for public sector workers. The logic of the budget is
therefore that public sector workers will have to accept a pay freeze
and absorb this year’s inflation in the cost of living.
Potential for industrial disputes
It is far from clear that public sector workers – who have only recently
felt their own power in forcing the re-establishment of a functioning
Executive – will meekly accept such a pay freeze.
Indeed, there are still outstanding pay disputes from last year which
have not been resolved in particular in public transport and among
non-teaching education workers.
Recent leaks carried in the bourgeois press signal that the
publicly-owned but arms-length public transport company for Northern
Ireland Translink may be finding ways to resolve the outstanding pay
dispute with public transport workers through using its own reserves to
fund an additional increase. The same certainly does not apply in
education where the prospect is of mounting industrial action.
While teaching workers in education voted to accept a 12.4% increase
after three years of a pay freeze – no money was provided in either the
February Stormont pay settlement or in the latest budget for the
six-year overdue pay and grading review for school support staff. The
four trade unions representing those workers responded to the latest
failure with indignation and a number signalled industrial action was
back on the cards.
While there are already moves within the Stormont Executive to seek
Treasury authorisation to reprofile the extra £3.3 billion to address
this outstanding claim unless this is forthcoming, industrial action in
schools and on school transport appears unavoidable.
Any industrial action would have to occur before the end of the current
school term to be effective but that would mean it coincides with the
politically sensitive exam period; a timing guaranteed to result in
considerable anger among students and parents, anger which is just as
likely to be directed the Stormont political parties as the low-paid
school support workers fighting for basic pay and respect.
There is considerable potential for industrial disputes involving other
groups of public sector workers seeking increased pay – not least of
which are the low paid Housing Executive workers in Unite who took an
unsuccessful nine-month strike in the absence of Stormont. In all cases,
the budget includes next to nothing to resolve such disputes.
Cuts to public services
If the budget primarily went to consolidate last year’s pay increases,
it left virtually nothing to expand desperately overstretched public
services. Given that virtually every public service is at or beyond
breaking point, it is inevitable that the north will suffer continued
public service crisis.
Nowhere is this more true that in health; the Health Minister responded
to his inadequate budget allocation by immediately ending the waiting
list initiative which saw his department spending millions on private
sector providers to reduce waiting times. The ending of such a
scandalous waste of public funds pump-priming the private medicine
sector is to be welcomed but in the context of failing NHS services,
will mean that waiting lists in the north – already the worst in the UK
– will extend even further.
In Education, the situation is the same; budgets for schools, school
services and childcare are already woefully inadequate – partially as a
result of the huge costs of sustaining the north’s sectarian and
class-divided education system but also reflecting decades of
underinvestment. On childcare where costs are so high that increasing
numbers of workers are leaving employment to look after children, the
extra £25 million committed is nowhere near what is needed to deliver a
comprehensive strategy; and there is certainly no money to restore the
holiday hunger programme or the primary school counselling programme
(both of which were cut last year).
The same story applies across all public services – including even the
state’s police and justice system. The cross-community,
bourgeois-liberal Alliance party Justice Minister Naomi Long stated that
the £95 million extra her department received (she sought £446 million)
was not even enough to cover courts or prison costs or the civil claims
arising from cases including PSNI data leaks. It is not surprising given
the potential for instability and opposition to brutal austerity, it has
been suggested that what little extra money has been provided to the
Justice department will largely go to police recruitment!
It goes without saying that the savage budget allows nothing for
environmental measures needed, for example to upgrade Victorian era
waste water infrastructure or the ongoing pollution of Lough Neagh.
The workers’ challenge
Stormont faces a daunting prospect of a direct confrontation with
workers – with the parties caught implementing a budget on behalf of an
anti-worker Tory government in Westminster.
The political parties appear very alive to this danger and are seeking
to use any influence they have in the trade unions to cut across
potential industrial action while at the same time using its prospect as
a threat to better secure money from the Treasury. It is unclear whether
this will generate anything extra from a Tory government with other
priorities – including looming decimation in a general election. That
said, if the British state considers that mounting industrial disputes
or even social or environmental campaigns risk destabilising the
power-sharing institutions in the north – something might be provided.
In the meantime, the risk that that the political parties may seek to
divert attention away from the pressing social, economic and
environmental disaster that will result from continued austerity by a
turn to the politics of division. This would amount to a volte-face from
the initial ‘gesture politics’ of both Sinn Féin and the DUP who were
seeking to win the centre ground.
In particular, there is a strong likelihood that Sinn Féin – who face
particular pressures as they seek to position themselves as a genuine,
albeit reformist, political alternative in the south ahead of an
election there. There is an obvious opportunity for them to use Tory
austerity as a foil to raise the need for Irish reunification as a
solution with a narrative that the north is an economic basket case.
This poses particular challenges to socialists who seek to build class
unity in struggle. Such a narrative partially reflects the true
imperialist relationship of the north with Britain but Sinn Féin will
have no interest in developing a working-class or socialist politics in
challenge to that. Instead they will seek to raise illusions as to the
benefits of a capitalist united Ireland a politics which offers nothing
to workers – and particularly Protestant workers – but which will act to
deflect criticism from their own working-class support base.
Furthermore, such a narrative is capable of securing at least the tacit
support of nationalist trade union leaders – and play into the logic of
cutting across strike action by public sector workers.
It is more necessary than ever that socialists provide a working-class
political alternative to austerity policies – regardless of whether they
are implemented directly by Tories in Westminster or indirectly by the
Stormont parties. Only such a policy can unite working class people and
build momentum for a new type of politics which will cut across both
sectarian division and offer a road away from neoliberal economics and
to defeat imperialism.