Ministers reveal 'positive' talks with Treasury as they confirm 4% rates rise

Stormont leaders have said their decision to increase regional rates in line with inflation comes amid "positive" engagement with the Treasury on securing more financial support for Northern Ireland.

Finance Minister Caoimhe Archibald received the agreement of Executive colleagues on Thursday for a 4% uplift in the regional element of the rates bill.

Announcing the move, Ms Archibald also revealed she had "really constructive" initial talks with the Treasury on Wednesday on developing a new fiscal framework funding model for Stormont.

The Executive's decision on the regional rate, which is subject to the approval of the Assembly, comes amid a demand from the UK government for the devolved administration to raise an additional £113 million of its own revenues in the coming financial year.

A 4% increase in the regional rate would only equate to around £30 million extra in revenue.

Furthermore, any rise could also see an increase in payment defaults and more applications for rates relief - so the actual sum generated may be lower.

First Minister Michelle O'Neill and deputy First Minister Emma Little-Pengelly insisted the 4% increase was "responsible" as they made clear they were not prepared to add any more to the burden being shouldered by hard-pressed households in the region.

However, Ms Little-Pengelly said the move gave a signal to Treasury that the Executive was prepared to raise extra revenues.

Overall rates bills are made up of the district rate, which is set by local councils, and the regional rate, set by the Executive.

The Treasury has offered to write off almost £600 million of Stormont debt, conditional on the Executive raising the £113 million and producing a plan to deliver sustainable finances.

The stipulation is a key element of a £3.3 billion financial package drawn up by the Government to support the return of devolution in Northern Ireland.

Ministers in Belfast claim the settlement does not go far enough to put Northern Ireland on a stable financial footing and are pressing the Treasury to make significant changes to enhance how the region is funded.

Ms Archibald was accompanied by Ms O'Neill and Ms Little-Pengelly as they announced the decision on rates to reporters outside Stormont Castle after Thursday's Executive meeting.

"We're very mindful of the pressures that all households are feeling right now and particularly businesses as well and we have therefore decided to keep the regional rates in line with inflation," said Ms O'Neill.

"The Executive has always been very clear that we're up for the challenge of transforming our public services but we only can achieve that if the long term financial package is in place and the right long term financial package is in place."

Ms O'Neill insisted the Executive had struck the right balance.

"It is a very responsible way to go forward, the Executive are doing its part, we want good public services, the public want good public services, but I think what we proposed today in terms of the rates is reasonable in terms of the inflationary pressures that we have," she said.

"We're determined to secure every penny of financial support for our public services and we're determined to achieve everything that was put down in that (Government) deal before Christmas.

"But we're also not prepared to put punitive costs on the householders who are struggling through the cost-of-living crisis.

"So we are engaged in the Treasury negotiation."

She added: "I'm glad to say that the Finance Minister has had a first initial conversation that's been quite constructive and quite positive.

"We intend to further that conversation in terms of how we can get to a juncture where we are actually funded to need and therefore whenever it comes to taking decisions at least the public know that there's a proper funding model in place and whenever we have to make decisions, they understand what the level of funding that we have to deal with."

Ms Little-Pengelly said she hoped further clarity would be offered by the Treasury in the coming days and weeks.

"So this is very much a decision taken in the context of those negotiations that have taken place and the nature and the positive nature of those negotiations thus far," she said.

"This is in our view a very fiscally responsible way forward.

"It's a way that balances the needs of the people of Northern Ireland in terms of the pressures that they're under, but it also sends an indication to Treasury that 'look, we are not sitting here saying that we are going to do nothing, we are indicating that we are prepared to do something'.

"But that 'something' has to be fair, it has to be reasonable.

"It will raise revenue (the rates increase) but of course we are taking this step in the context of constructive discussions with the UK government and the Treasury.

"We're taking the step because we believe that those discussions will continue and will result in a reasonable outcome. So revenue will be raised here.

"But, of course, our primary concern in all of this is to make sure that the people of Northern Ireland are not put under undue pressure."

Ms Archibald said the Treasury had acknowledged the challenges facing the public in Northern Ireland during their meeting.

"I had expressed concerns around the conditionality that had been attached to the financial package, particularly in relation to the timescales attached to that, and I will be continuing to have good engagement with the Treasury in the weeks ahead," she said.

"I did have a constructive engagement with Treasury yesterday and I laid out the challenges that face us as an executive, but also the challenges that face households and businesses here and I think there's a recognition from them in relation to those concerns and the challenges that we face and we will continue to have that engagement in the weeks ahead."

At Thursday's meeting, ministers also heard an update from Health Minister Robin Swann on efforts to tackle Northern Ireland's spiralling waiting lists.

Education Minister Paul Givan briefed colleagues on issues facing the special educational needs sector and on the proposed Strule shared education complex in Omagh, Co Tyrone.

It has also been confirmed that the first meeting of the North South Ministerial Council since powersharing returned will take place on April 8.

Stormont ministers will also participate in their first British Irish Council since restoration in June.

Ms Little-Pengelly said the new East West Council, which was established as part of the DUP's deal with the Government to restore Stormont, will meet for the first time on March 26.