Northern Ireland Office

Jim Shannon Excerpts

Monday 29th June 2026 Commons Chamber

[Tonia Antoniazzi]

I recognise that we do find ourselves in a rather ridiculous situation, which impacts directly on the lives of people in Northern Ireland.

This precarious financial situation has serious implications beyond Northern Ireland, and the consequences for the Northern Ireland Office and the Treasury should be of concern to Members across the House. The vast majority of Northern Ireland’s funding comes from the UK Government through the block grant. Executive Ministers have raised concerns about the adequacy of the settlement and are calling for further funding. They cite the current financial year as being particularly challenging for Departments, with the block grant set to drop by 2.7%, before only modest increases in the following years.

We know that the Secretary of State has met the Finance Minister on a number of occasions in recent weeks, and I would be most grateful if he updated us on his discussions with Executive Ministers on urgently finding a resolution to agree a budget, and on the support the Government are providing to enable such a resolution to be found.

[Jim Shannon (Strangford) (DUP)]

I commend the Chair of the Northern Ireland Affairs Committee for all that she does, but this issue of course goes beyond what she is setting out. The Northern Ireland Office is tasked with co-ordinating the local growth fund across the Province, yet my local community and voluntary sector are expressing deep concerns about its flawed programme design. They say that the funding structure is inaccessible and unresponsive to local realities on the ground. Does the hon. Lady not agree that, when the Secretary of State gets to his feet, he must explain why the Northern Ireland Office has failed to properly engage with our community sector? Does she agree that urgent steps must be taken by his Department to reform this programme to ensure that these vital funds actually reach the groups who need them most?

[Tonia Antoniazzi]

I thank the hon. Member for his intervention about the local growth fund. In our Committee session today, we grilled the Parliamentary Under-Secretary of State for Northern Ireland, who is sitting on the Front Bench, about this funding. On numerous occasions, we have noted our disappointment that the relevant Department has been able to shift the spending, but I am sure that the Secretary of State will give the hon. Member an explanation later.

Given the potential impact of having no agreed budget on the delivery of public services if the situation continues into the autumn, does the Secretary of State foresee a circumstance in which he would step up and step in to set a budget for Northern Ireland, should the Executive remain unable or unwilling to do so?

Linked to this are concerns about the Executive’s overspending and budget sustainability. At the end of the last financial year, the Government provided the Executive with a £400 million reserve claim loan to cover departmental overspends in health and education. That follows the £559 million Executive debt write-off by the Government in 2024 as part of the financial package accompanying the restoration of power sharing.

The Northern Ireland Fiscal Council warns that overspending is now becoming normalised, and it describes how repeated bail-outs

“could dull the Executive’s incentive to take difficult fiscal decisions”.

Overspending against available budgets by devolved Governments amounts to serious financial mismanagement, according to Treasury policy. Would the Secretary of State describe the Executive’s actions in the same terms?

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[Tonia Antoniazzi]

I think there are further discussions to be had about need, the Barnett formula and all those things. I am sure those discussions are happening and that those things are being continually reviewed, but I do agree about the need.

The Executive will repay this £400 million loan over three years—£80 million this year and £160 million next year, with £160 million due in 2028-29. Given the Executive’s track record, are the Government confident that these payments will be met? Northern Ireland Ministers have warned of further overspends, given their continued constrained financial position. The two Departments responsible for the reserve claim are likely to see a drop in their resource funding this year. How will the Government respond to further overspends?

Granting the reserve loan was on the condition that the Treasury conducted an open book exercise on the spending of Northern Ireland Departments. This found that spending per head on policing in Northern Ireland is 166% of what it is in England, spending per head on health, excluding social care, is 152% and spending per head on schools is 140%. On the other hand, spending per head on prisons and probation services is only 79% of that spent in England and Wales. The report presents a number of policy options, and says that the Executive could make savings of up to £3 billion. However, Northern Ireland Ministers contest many of its findings. In his response, will the Secretary of State address the Government’s expectations of the Executive taking forward these options, and tell us what steps the Government are taking to help put Northern Ireland’s finances on a more sustainable footing?

[Jim Shannon]

I thank the hon. Lady for giving way again. As she will know, one reason for that 152% health spending figure is the level of disability and poverty across Northern Ireland. The 152% figure reflects the actual need on the ground, and meeting that need must be the major goal for the Secretary of State to achieve.

[Tonia Antoniazzi]

I agree that our Committee has seen that the need is greater, and we are working to represent Northern Ireland and the people who live there as best we can.

My Committee has recently conducted inquiries on policing and security and on legacy, which the Government directly fund. The Police Service of Northern Ireland currently receives £37.8 million a year directly from the Government as additional security funding. This ringfenced funding was introduced in 2011, and until last year it was specifically used to address the threat from Northern Ireland-related terrorism, but this ASF has now been broadened to cover all national security threats. The increase we have seen over the current spending review period may be to cover the broadened remit, but no information is publicly available about how the level of funding is determined by the Government. While we know that publishing some information may not be possible due to security considerations, my Committee has called for greater transparency, and I would be grateful for the Secretary of State’s response to our recommendations.

The recent riots in Northern Ireland are of great concern, and they will be of serious concern to Members across this House. I take this opportunity to commend the PSNI and the emergency services for their response to the disorder. The PSNI was already facing a constrained financial position, so I welcome the additional £4 million provided by the NIO to meet some of the costs it incurred. Could the Secretary of State provide more detail on, and has he had any correspondence about, the funding that I have heard has been provided by the Irish Government for community cohesion following the riots.

Finally, I turn to the issue of legacy and the work of the Independent Commission for Reconciliation and Information Recovery, which I will refer to as the ICRIR. This body was set up under the previous Government’s Northern Ireland Troubles (Legacy and Reconciliation) Act 2023. It is responsible for investigations of legacy cases to provide information to victims, survivors and their families about troubles-related deaths and serious injury. For the present financial year, the ICRIR is receiving £232 million over the whole spending review period. However, Peter May’s recent review of the ICRIR raises some serious concerns about its capacity and governance. According to the review, cases are being paused due to a lack of resource which, in a recent Committee session, the ICRIR disputes. It says that the current funding levels “are not sufficient” to support its view of what is required under the legislation, with

“real concern that they will not have the means to deliver case outcomes within any reasonable timeframe”.

The ICRIR has also seen three finance directors in the past year, with the review describing

“a low level of maturity in terms of its financial and corporate governance.”

The review notes that the ICRIR is submitting to the Treasury a new business case seeking additional funding. Will the Secretary of State update us on the status of that? The Secretary of State told us that confidence in the ICRIR will be gained

“if it provides answers to families who have been looking for them for so long”.

Does he share my fears about the impact that pausing cases will have on victims and families who have already been made to wait decades for answers about their loved ones? Can he also assure the House that confidence in the commission’s financial management and governance arrangements has improved since the review?