Northern Ireland's funding is parties' number one priority, says O'Neill

Michelle O'Neill
Michelle O'Neill says parties in the Stormont Executive will be turning their attention to how Northern Ireland is funded

All parties in the Stormont Executive agree that Northern Ireland needs a better funding model from Westminster, the new first minister has said.

Michelle O'Neill said Northern Ireland's public services were being "starved" by the government.

She was speaking to the BBC in one of her first broadcast interviews since becoming Northern Ireland's first nationalist first minister.

On Saturday, she described her appointment as "a new dawn".

Power-sharing government returned to Northern Ireland after the Democratic Unionist Party (DUP) ended its boycott over post-Brexit trade rules.

The DUP's Emma Little-Pengelly was appointed deputy first minister. The first and deputy first ministers hold a joint office and have equal power.

However, Ms O'Neill becoming first minister is seen a landmark moment for Irish nationalism.

Ms O'Neill told the BBC that Northern Ireland's funding model is the "number one priority issue that we have collectively" in the Northern Ireland Executive, which is due to meet on Monday for the first time since the restoration of devolved government.

The UK government is due to release a £3.3bn package now that power sharing has been restored, much of which is earmarked to resolve public sector pay disputes and ease strain on public services.

Ms O'Neill said that offer from the Treasury "acknowledged that we're underfunded", adding that it was an issue "we're all going to turn our attention to so that we can then in turn do things better in terms of health, education and public services".

Analysis box by John Campbell, NI economic and business editor
Analysis box by John Campbell, NI economic and business editor

Funding package has strings attached

The £3.3bn funding package which the UK government is providing to help the new executive includes around £580m to settle public-sector pay claims and more than £1bn for "stabilisation" of public services.

However, on Friday the DUP leader warned that the money earmarked for pay would fall short of what is currently required.

A recent leaked letter from the head of the Northern Ireland Civil Service referred to pay pressures of more than £630m across public services.

The funding package also comes with the condition that the Northern Ireland Executive will commit to additional revenue raising - imposing new or higher taxes or charges on households and businesses.

A revenue-raising plan is expected to be published by May, alongside a public service transformation plan.

How is Northern Ireland funded?

The daily operation of Northern Ireland's public services, such as health, education and policing, costs about £13bn a year to run.

Some of that money is raised locally through taxes and other charges but the vast majority - more than 90% - comes from the Treasury.

A new funding model has been offered, which seeks to better reflect the real level of need in Northern Ireland, although some local political leaders have said it does not go far enough.

Meanwhile, Ms O'Neill acknowledged that after two years without devolved government, newly appointed executive ministers have issues to sort out quickly.

"There are things in our inboxes we need to urgently action - affordable childcare, building social and affordable homes," she said.

"Turning our economy around. We have the Windsor Framework, so we have access to both (UK and EU) markets. We need to capitalise on that and create more jobs, better paid jobs.

"There is enormous opportunity ahead of us as well as all the challenges we have to face, but I think the fact we now have the executive up and running gives us the chance to do that."

On Sunday, new Northern Ireland Health Minister Robin Swann said he wanted to prioritise resolving current industrial disputes in the health service.

Mr Swann, who was previously health minister from January 2020 to October 2022, said he wanted to see "pay negotiations being initiated without delay".

"Consequently I have written to the trade unions inviting them to early discussions," he said.

"Staff are the bedrock of the health service and they are entitled to proper remuneration for the vital work they do."

Ulster Unionist Party MLA Mr Swann said there was not a minute to waste given the scale of the issues facing services.

"I am very conscious of the toll the current pressures and service shortfalls are taking on staff and patients. We must take the right decisions that will give citizens more timely access to care and treatment."

'Things are changing in Ireland'

Ms O'Neill said she believes a united Ireland will be achieved in her lifetime, and possibly within the next decade.

"The very fact that a nationalist has been voted in as first minister for the first time speaks volumes to the change that is happening across our island," she said.

"A lot of things are changing in terms of our Ireland."

When asked how she can be a leader for all communities in Northern Ireland, but also pursue constitutional change to NI's position in the UK, Ms O'Neill maintained "it's very doable" and that "we can do more than one thing at once".

"I believe we can have power sharing up and running while pursuing these other conversations alongside it.

"Let's have the courage and confidence to articulate each side of the argument and, remember, the beauty of the Good Friday Agreement, at the heart of it, is: it's only the people who'll decide."

More on the return of power sharing in Northern Ireland