Barnett Review long overdue
Sinn Féin Chair of the Assembly Finance Committee Daithí McKay commenting on the Institute for Fiscal Studies (IFS) report on calculation of the Block grant said a Barnett review is long overdue.
Daithí McKay said:
“Sinn Féin has for some time been advocating a review of the Barnett formula and a full exploration of the relationship between revenue generation and public expenditure. Contrary to the findings of the IFS report that the formula advantages the North in certain aspects, I believe that an overall analysis would show that Barnett is bad for the North of Ireland.
“The report suggests that we have been protected against additional cuts due to the fact that we raise rates, and that local government spend is dealt with outside of the Barnett formula.
“It is important that we consider the functionality of the Barnett formula in full, particularly around the issues of infrastructure spend and democratic control.
"The review of Barnett being undertaken by the Department of Finance and Personnel Committee is therefore to be welcomed.
“For instance Infrastructure spend which is what drives economic growth and job creation is much higher in Britain than it is here because of the constraints under Barnett on our ability to raise revenue. We also have the added challenges of being at the bottom of every economic indicator of poverty and disadvantage.
“It should be remembered that rates is our only major form of revenue and that Barnett removes our ability to formulate our own fiscal policies to match our specific economic needs.
“Barnett diminishes our capacity to negotiate a proper budget and was designed to protect the treasury from having to consult on the level of the block grants. It negates democratic control over fiscal matters which disadvantages the Executive efforts to stimulate economic recovery.
“The fact that our block grant has been unilaterally cut by the British Treasury year on year over the last five years is evidence of the lack of local democratic control of our economy.
“This is the reason Sinn Féin is advocating transfer of fiscal responsibility and accountability for our own affairs to the Executive and the Assembly, we want to balance the books.
“But we cannot achieve this at present as the British Treasury refuses to disclose accurate figures for revenue generated here against the level of the Block grant calculated through the Barnett formula.
“Sinn Féin would welcome a comprehensive review of Barnett as a step towards achieving democratic control of our own economic future.”