Friday, January 21, 2011

Northern Ireland - Subvention City Or Still A Special Case?

Tuesday night's In Conversation With ... Philip McDonagh hosted by Contemporary Christianity took a fast but thorough canter through the state of Northern Ireland's economy.

Philip's an economist and he posed the question:

Northern Ireland - Subvention City Or Still A Special Case?

What mechanisms determine the level of public expenditure here? Are they linked to need? Why is public expenditure so high? What choices does the NI Executive have? Should we do more to pay our way? What is the role of the Voluntary sector? Can the Big Society, Welfare Reforms or even the next generation help us through? What about those in need?

The slides are linked up to the accompanying audio. (At the points in the evening when it turned into a conversation, some of the voices furthest from the front of the room become a little indistinct.)

Some insights I took away from the discussion:

  • The UK Exchequer subsidises £5,300 per head of NI population per annum.
  • NI raises £11bn in taxes, but spends £20bn - though there are some reasons for dependency: duplicate provision (Troubles legacy), small private sector, large families (pressure on education & health).
  • The Barnett Formula (linking devolved spending to England) is not based on need; Scotland would like to move to needs basis, Wales are also reviewing Barnett.
  • NI's "unfunded commitments" means deferred water charges of £200m+, free prescription charges £20m extra, free travel for elderly, domestic rates freeze, PMS £25m - many of those are cynical vote winners.
  • While there's a 2 year inflationary freeze on public sector salaries over £21k, civil servants will still receive their salary scale increments.
  • You’ve got to ask whether those who can afford to should pay more rates, water charges, prescriptions? Should those who can afford not ensure that those in greatest need don't suffer?
  • And how how does voluntary and community sector play a role - Cameron's 'Big Society' - in "subvention city"?
  • Will level of NI young people emigrating rise? Have baby boomers feathered their nests at expense of next generation?

Northern Ireland needs to deal with poverty of education, poverty of aspiration, poverty in family & community, not to mention poverty in people’s pockets.

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