Stormont Executive ‘could be £100m short to deal with national insurance rise’

Northern Ireland is set to be around £100 million short to deal with the outworkings of a hike in national insurance contributions, the Stormont Finance Minister has said.

Caoimhe Archibald also announced the appointment of an expert to assess the region’s general level of need ahead of the upcoming Spending Review for 2026/27.

Ms Archibald was speaking as she appeared remotely before the Northern Ireland Affairs Committee, which is examining the funding of public services in the region.

She acknowledged the most recent funding allocation for Northern Ireland, but said “years of underfunding” of public services “was never going to be reversed in one Budget”.

“The Executive fully recognises the need to deliver public services as efficiently and effectively as possible and we are all in agreement that transformation is essential if the Executive is to put our finances on a sustainable footing,” she told MPs.

“But to be able to do that we need to have fair and stable funding.”

Ms Archibald also sounded the alarm around the impact of the increase to national insurance contributions.

She told MPs that the estimated additional cost to departments and their agencies is around £200 million for 2025/26.

“The Executive, like the devolved governments in Scotland and Wales, does not have the financial capacity to compensate for decisions made on reserved taxation matters,” Ms Archibald said.

“While the Chancellor has said that support will be provided for public sector employers, this is likely to fall far short of what is needed for us in the Executive, possibly in the region of £100 million.

“I’ve obviously been engaging with the Chief Secretary to the Treasury in relation to that particular point to ask for urgent clarity on the quantum of funding and to ask for these costs to be met in full, and also to appeal for consideration to be given to support for those outside central government but who support us to deliver vital public services.”

Earlier this month Sir Robert Chote, chairman of the Northern Ireland Fiscal Council, warned that the Stormont Executive faces a financial “cliff-edge” when stabilisation funding provided by the UK Government runs out.

On Wednesday, Ms Archibald told MPs her department is developing the evidence base to demonstrate the need for a higher level of funding to inform the upcoming Spending Review for 2026/27.

As part of this, she announced that Professor Gerry Holtham, who led the Holtham Commission in Wales, has agreed to conduct an independent review on Northern Ireland’s level of need.

Meanwhile Fleur Anderson, under secretary of state in the Northern Ireland Office, told MPs earlier that the Stormont Executive has a mountain of challenges to climb, pointing out waiting times for health services and diagnosis for children with special educational needs.

However she insisted the funding is there as well as the levers for Stormont to tackle the situation.

“Fundamentally transforming public services will require the Executive to own a difficult set of decisions,” she said.

“The money is there, the levers and powers are there for the Northern Ireland Executive to deliver.

“There has been a big settlement … with the largest settlement in real terms since the devolution, the Government providing £18.2 billion for the Northern Ireland Executive with a £1.5 billion top-up.

“There is enough money to transform public services, the discussion now needs to move on from funding to delivery.”

DUP MP Gavin Robinson queried whether the increase to national insurance contributions was factored into Northern Ireland’s budget position.

Ms Anderson responded: “There are always going to be changes within the year.”

She also rejected a suggestion by Mr Robinson of a “blase attitude” to Northern Ireland’s financial position at Westminster, saying she recognises the “enormous mountain that the Northern Ireland Executive have to climb”.

“The main message we’re saying is not ‘you’ve lots of money, get on with it’, the main message is, ‘there are tough decisions to be made, it is a difficult climate but don’t let that stop transformation’,” Ms Anderson added.