To ensure the effective use of the £3.3 billion funding package, address potential risks, and promote long-term fiscal and public service sustainability in Northern Ireland, the following critical action points are recommended. These are prioritized based on urgency, impact, and feasibility, drawing from the analysis of the funding package and broader fiscal context.

1. Develop and Publish a Sustainable Public Finances Plan (Immediate Priority)

• Why: The £559 million debt write-off is conditional on the Northern Ireland Executive publishing and implementing a plan for sustainable public finances. Failure to do so could result in renewed fiscal pressure, undermining the benefits of the funding package.
• Action Points:
  • Draft a Comprehensive Plan: Within the next 3 months, produce a detailed, time-bound plan outlining revenue-raising measures, cost-saving initiatives, and structural reforms to achieve a balanced budget beyond 2025/26.
  • Engage Stakeholders: Consult with public sector leaders, unions, businesses, and civil society to ensure buy-in and feasibility, particularly for contentious areas like revenue generation.
  • Secure UK Government Approval: Submit the plan to the UK Treasury for review by June 2025, ensuring compliance with debt write-off conditions.
• Impact: Secures debt relief, enhances fiscal credibility, and reduces reliance on short-term UK Government funding.

2. Accelerate Public Service Transformation (High Priority)

• Why: The £235 million transformation fund is a cornerstone of the package, but only £129 million has been released as of March 2025. Slow progress risks missing opportunities to modernize services and deliver efficiencies, potentially leading to withheld funds.
• Action Points:
  • Prioritize High-Impact Projects: Within the next 6 months, the Public Service Transformation Board should identify and fund additional projects with clear, measurable outcomes, focusing on health, education, and justice.
  • Enhance Transparency: Publish quarterly progress reports on transformation spending, detailing funds allocated, projects underway, and outcomes achieved, to build public trust and ensure accountability.
  • Build Capacity: Invest in training and digital infrastructure to support transformation, addressing workforce and technological barriers to change.
• Impact: Unlocks remaining transformation funds, improves service delivery, and reduces long-term costs, mitigating the risk of a funding cliff-edge in 2026/27.

3. Address the Funding Cliff-Edge (Medium-Term Priority)

• Why: The £1 billion stabilization funding is concentrated in 2024/25 and 2025/26, creating a risk of significant budgetary shortfalls from 2026/27 onward, particularly if transformation efforts do not deliver anticipated savings.
• Action Points:
  • Model Future Scenarios: By September 2025, conduct a detailed fiscal modeling exercise to project revenue and expenditure trends through 2030, identifying potential shortfalls and mitigation strategies.
  • Negotiate Ongoing Support: Engage with the UK Government to secure a multi-year funding commitment beyond 2025/26, potentially tied to the 24% Barnett uplift, to smooth the transition to self-sustainability.
  • Invest in Efficiency: Prioritize transformation projects that deliver measurable cost savings (e.g., digitalization of health records, centralized procurement) to reduce reliance on external funding.
• Impact: Prevents a sudden drop in service funding, supports long-term planning, and enhances fiscal resilience.

4. Maximize Use of Increased Borrowing Powers (Medium-Term Priority)

• Why: The 10% increase in the annual capital borrowing limit, with further inflation-linked uplifts, provides an opportunity to invest in infrastructure and economic development, but requires strategic planning to avoid unsustainable debt.
• Action Points:
  • Develop a Capital Investment Plan: By December 2025, produce a 5-year capital investment plan prioritizing projects with high economic returns, such as transport, renewable energy, and digital infrastructure.
  • Leverage Private Finance: Explore public-private partnerships to amplify borrowing capacity, ensuring robust value-for-money assessments to protect public finances.
  • Monitor Debt Levels: Establish a debt management framework to ensure borrowing remains within sustainable limits, reporting annually to the Northern Ireland Assembly.
• Impact: Stimulates economic growth, improves public infrastructure, and enhances service delivery without over-reliance on direct UK Government funding.

5. Enhance Revenue-Raising Capacity (Long-Term Priority)

• Why: Northern Ireland’s limited local revenue-raising capacity (e.g., no devolved income tax powers, reliance on rates) restricts fiscal autonomy and sustainability. The funding package does not address this structural weakness, but action is needed to reduce dependence on UK Government support.
• Action Points:
  • Review Revenue Options: By mid-2026, commission an independent review of potential revenue-raising measures, including devolved tax powers, user charges, and property tax reforms, benchmarking against Scotland and Wales.
  • Pilot New Measures: Test pilot schemes for revenue generation, such as environmental levies or tourism taxes, to assess feasibility and public acceptability.
  • Negotiate Fiscal Powers: Engage with the UK Government to devolve additional fiscal powers, building on the precedent of the 24% Barnett uplift, to enhance local control over finances.
• Impact: Increases fiscal autonomy, reduces reliance on UK Government funding, and supports long-term sustainability of public services.

6. Strengthen Oversight and Accountability (Ongoing Priority)

• Why: The funding package’s conditionalities and lack of transparency in some areas (e.g., £708 million repurposed funds) risk undermining public trust and effective delivery. Robust oversight is essential to ensure funds are used efficiently and achieve intended outcomes.
• Action Points:
  • Establish an Independent Oversight Body: By June 2025, create an independent body to monitor spending, evaluate outcomes, and report publicly on the use of the £3.3 billion package, complementing the Public Service Transformation Board.
  • Enhance Reporting: Require the Northern Ireland Executive to publish detailed annual reports on all funding streams, including allocations, expenditures, and progress against targets, starting with the 2024/25 fiscal year.
  • Engage the Public: Hold regular public consultations and Assembly debates on funding priorities and outcomes, ensuring democratic accountability.
• Impact: Builds public trust, ensures funds are used effectively, and mitigates risks of mismanagement or political disputes.

7. Mitigate Political Risks (Ongoing Priority)

• Why: Political instability, a recurring issue in Northern Ireland, could disrupt the implementation of the funding package, particularly given the need for cross-party agreement on contentious issues like revenue-raising and transformation priorities.
• Action Points:
  • Strengthen Executive Cohesion: By March 2025, establish a cross-party working group within the Executive to align on funding priorities and sustainability measures, reducing the risk of collapse over budget disputes.
  • Engage Opposition Parties: Regularly brief opposition parties in the Assembly on funding plans and progress, fostering broader political support and reducing the risk of gridlock.
  • Plan for Contingencies: Develop a contingency plan for funding allocation and project delivery in the event of Executive suspension, ensuring continuity of critical services.
• Impact: Enhances political stability, ensures consistent delivery of funding benefits, and reduces the risk of UK Government intervention.

Implementation Timeline

Conclusion

These critical action points address immediate needs (e.g., securing debt relief), medium-term risks (e.g., funding cliff-edge), and long-term structural challenges (e.g., revenue-raising capacity). By prioritizing sustainability, transparency, and political stability, the Northern Ireland Executive can maximize the benefits of the £3.3 billion package, deliver tangible improvements in public services, and build a more resilient fiscal future. Regular monitoring and adjustment of these actions will be essential to respond to evolving challenges and ensure success.