I cannot promise to be quite as brief as my colleague, the hon. Member for Belfast East (Gavin Robinson), but I will try. Essentially, I want to speak to those amendments that stand in my name: amendments 2, 3 and 4, which are all focused on the issue of financial sustainability. We recognise the line that the Government have put into the Bill, and I seek to encourage the Minister to take it forward in a substantive way.
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We are making three suggestions in that regard, the most significant of which relates to a potential financial package for Northern Ireland. Such a package needs to be on an invest-to-save basis, and directly linked to a very select number of areas: health, education, the economy, skills, infrastructure, and climate change mitigation would be our proposals in that regard. I acknowledge that we have to learn lessons from previous interventions from the Government through financial packages, and that the package will have to come with conditions. It will need to be linked to a very clear plan from an Executive about how reform will be taken forward—it would need to be over several years—but we do need to have transformation in Northern Ireland, as many people have acknowledged in this debate. Of course, before we can do transformation, we need to have a stabilisation of the finances, and we cannot do any of that in the context of a burning platform where we are in a spiral of cut after cut and decline after decline.
We have the Bengoa report as the template for health transformation. It will take investment to make it happen, but through investment we will have much better outcomes for the people of Northern Ireland, and it will be on a more cost-effective basis. There is a real incentive for
the Government to buy into this; if we do not invest, we will see waiting lists in Northern Ireland getting even longer. I would make the point that our waiting lists are already the longest in the UK, not by a small margin but by a very significant gap.
The same applies to education. We have a massive problem of educational under-attainment in Northern Ireland. That is a major drag on our economy, as well as a blight on some people’s long-term economic and life opportunities, and the education funding gap between Great Britain and Northern Ireland is widening ever further. The Minister’s colleague, the hon. Member for Worcester (Mr Walker)—who was one of his predecessors in the Northern Ireland Office, and currently chairs the Education Committee—has particularly reinforced that point about the growing gap in funding.
We have to grow our economy, which means investment in skills, and also investing in the right skills. The Government themselves are being very clear about the need to tackle Northern Ireland’s disproportionate level of economic inactivity—again, as part of the wider mission across the UK. If we can address those issues, the productivity gap between Northern Ireland and Great Britain will narrow; if we do not, it will widen, with all the attendant consequences that will flow from that. We have to take full advantage of the opportunities we have, including dual market access, the potential trade mission, and the trade conference that the Government are doing. I understand the reluctance and scepticism around this issue, but frankly, I do not see any alternative if we are to break that vicious cycle.
I would use the analogy of a business that is struggling, where the business model is out of date and is not functioning. One of two things will happen: the business will die, or it will restructure. Often, if a business wants to restructure, it has to seek external finance to do so, but again, that finance will come with conditions around how that restructuring is taken forward. We have proposals in with the Government, and we welcome further engagement in that regard. I appreciate that such engagement is probably best done on a structured basis with the Northern Ireland parties; it should be done as quickly as possible, but there does need to be some sort of structure to that.
Amendment 2 relates to the costs of a divided society, which have already been mentioned by my colleague, the hon. Member for Belfast South (Claire Hanna). Our amendment seeks the commissioning of a revised, updated report from a Northern Ireland Department—importantly, as a prelude to action finally being taken in this area. There are some very significant costs arising from duplication and, indeed, distortion in Northern Ireland’s public expenditure profile, which is linked to the legacy of division and violence, and ongoing patterns in how services are provided. It is apparent in four particular ways. One is direct costs. For example, our policing costs and public order costs are higher than the rest of the UK. Secondly, we have some degree of parallel provision, done either implicitly or in some cases explicitly by Government, for different parts of the community. It is not just at Assembly level; it happens with councils, too. Education would be the most clear-cut example in that regard, but it is far from the only one.
Thirdly, there are contextual issues, such as the environment in which public agencies are operating. A clear example is the provision of housing in Northern
Ireland, where trying to navigate around patterns of segregation makes it slightly more difficult—perhaps much more difficult—to provide new social housing. There are issues of territoriality of land for redevelopment. We need to get past that if we are to deliver housing more efficiently and effectively. Like elsewhere, there are real pressures on housing for people. Finally, there are opportunity costs from division and lack of political stability for tourism, inward investment and wider economic opportunities.
I reinforce that there have been a series of reports in this area already, notably by Deloitte in 2007 and the Ulster University Economic Policy Centre in 2016. We have had some recent commentary from Ulster University’s “Transforming Education” project, but the work is fundamentally now seven years out of date, and it needs to be re-done if we are to use it as a genuine platform to take forward further reform and transformation.
Finally, I reiterate the point that a number of people have made today about the need for a reassessment of the Barnett formula and how it works for Northern Ireland, with potentially a move to a much more needs-based assessment. The estimate for the shortfall in our finances, if I have my figures are correct, was £362 million for the outgoing financial year. That will rise to £485 million in this financial year. That is a significant element of the differential and the pressures that Northern Ireland Departments are facing.
I will not seek to push any of the amendments to a vote today, but I certainly would like to use this platform to encourage the Government to take seriously those three particular angles around financial sustainability. Work can be done now in preparing for a return to devolution in the near future, but time is not on our side if we are to make the best use of the scarce resources available to us.