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New Decade, New Approach Agreement Contents

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1Negotiations

Tackling the democratic deficit

3.The Northern Ireland Executive collapsed in January 2017 following the resignation of then deputy First Minister Martin McGuinness due to controversy about the operation of the Renewable Heat Incentive scheme, among other issues.6 An Assembly election was then held on 2 March 2017.7 Following the Assembly election, multiple rounds of negotiations to restore power-sharing took place between 2017 and 2019. However, those talks were unsuccessful, and in each case the then Secretaries of State for Northern Ireland decided to extend the period for Executive formation.8 For three years, this left the Northern Ireland Civil Service with responsibility for the day-to-day running of Northern Ireland without ministerial direction.9 Dr Anthony Soares, Director, Centre for Cross Border Studies, told us that this placed the Northern Ireland Civil Service in an “invidious position…anxious to take decisions in the best interests of the public, but reluctant to do so as unelected officials”.10

4.The Head of the Northern Ireland Civil Service, David Sterling, speaking in early November 2019, warned that the prolonged inability to make new policy decisions meant that public services in Northern Ireland were “suffering from what we have termed ‘strategic decay and stagnation’”.11 Mr Sterling added that the evidence of stagnation could be seen across the public sector landscape:

We see this in our hospital waiting lists, which are unacceptably long. We see this in our schools, which are under immense budgetary pressure. We see this in our social housing, which has a growing maintenance backlog.12

The previous Northern Ireland Affairs Committee also heard evidence of the detrimental effects of stagnation in public service provision during its inquiries on Education funding in Northern Ireland and Health funding in Northern Ireland.1314

5.Following the general election on 12 December 2019, fresh talks to restore the devolved institutions began on 16 December 2019.15 The talks paused over the Christmas holidays and resumed on 2 January 2020.16 Those talks achieved a breakthrough in the negotiations to restore power-sharing. On 9 January 2020, the text of the New Decade, New Approach deal was published by the UK and Irish Governments, because the 13 January 2020 deadline for the formation of an Executive was imminent. The document was published by the UK and Irish Governments before parties in Northern Ireland had confirmed that they would sign up to it.17 After the agreement was published, the five major political parties in Northern Ireland agreed to support it.18 The Northern Ireland Assembly subsequently met to establish a new Executive on Saturday 11 January 2020.19 Since receiving evidence, the fragility of the Executive has been highlighted by recent events.20

6.The former Secretary of State for Northern Ireland, Julian Smith, told us that the political context of a health service in crisis, coupled with the general election, pushed parties in Northern Ireland into finalising an agreement in January 2020:

As we got through last year, I think that the key thing that became apparent was that the waiting lists—over 300,000 people on health waiting lists in Northern Ireland—coupled with the first strike of nurses in over 100 years in the United Kingdom was putting huge pressure on politicians. That came out in the general election in December, when a number of the established parties lost Members of Parliament and new MPs came on board, and I think that to a woman and man candidates were reporting that voters were fed up.21

Dr Esmond Birnie, senior economist, Ulster University Business School, supported that argument. He pointed out that, when considering the negotiations on the deal, it must be “recognised that in the context of the health sector pay parity dispute and strikes public opinion in NI[Northern Ireland] was strongly pushing the NI Parties to agree to restore devolved government.”22

7.Mr Smith highlighted the importance of the Government’s dedicating time to fostering devolution in Northern Ireland and co-operation between the Government and the Northern Ireland Executive:

It does require a huge amount of time in order to make sure that these relationships are continued and looked after on an almost day-to-day basis…it does take time, and it is always going to be difficult for any Government to put the amount of time that is required in an area as tricky as this when there are other things on, but I would encourage that to happen.23

Sir Jonathan Stephens, former Permanent Secretary, Northern Ireland Office, agreed:

I think that the lesson of not just the last few months but the years since 2010 is that Northern Ireland remains a priority for the UK Government … It is important that, now and in the future, UK Governments continue to facilitate and to maintain those links and relationships between the UK Government and the Executive and all the other institutions, to demonstrate the degree of priority that Northern Ireland has for the UK.24

8.The agreement of parties in Northern Ireland, as well as of the UK and Irish Governments, to the New Decade, New Approach deal was welcome, because it restored the devolved institutions in Northern Ireland. The UK and Irish Governments must support the Northern Ireland Executive to implement the commitments in the agreement in full. The UK Government must continue to focus on nurturing devolution in Northern Ireland.

Linking funding for public services to the stability of devolution

9.The Government set out funding to support the New Decade, New Approach deal. That financial package was linked to the maintenance of devolution in Northern Ireland. The agreement provided that the Government’s financial and economic commitments to Northern Ireland will “apply solely in the event that the Executive is restored through this deal”.25 It continued:

If the Executive is not restored, the additional support set out here falls away. In that scenario, the UK Government will need to examine what additional revenue raising and other measures are required to balance the Northern Ireland budget.26

The agreement cautioned that funding will be withdrawn in the event of a future “collapse” of the devolved institutions.27

10.Mr Smith explained why the funding package was conditional:

The most important point is that this was additional funding to support a talks process. Clearly, if there was a failure of the talks, and we reverted back to, essentially, budgets being agreed between the Northern Ireland civil service and Westminster Government, there would have to be discussions around how that was applied, as there were in the three years when the Executive was in abeyance. I think it would also be wrong to say that all this money will be there, although maybe there will be parts of it there in that scenario.28

11.Some witnesses highlighted the demerits of tying Government funding for public services to the restoration and functioning of the devolved institutions. Paul Mac Flynn, Co-Director, Nevin Economic Research Institute, told us that

this is an unnecessary and ill-conceived incentive mechanism. The political leverage that it might exercise will be far outweighed by the disruption and damage it will do to the effective and efficient operation of public services in Northern Ireland.29

Ann Watt, Director, Pivotal Public Policy Forum, agreed that the mechanism was unnecessary:

Previous agreements to re-establish or sustain the institutions in Northern Ireland have often had additional funding attached, although not in such an explicitly conditional way as was used in NDNA [New Decade, New Approach]. Does this mean that future funding for public services in Northern Ireland will be conditional on the Executive being in place? While this might sound like it could provide an incentive against collapse, it is hardly realistic to think that the UK Government would starve public services in Northern Ireland of funding in the event of a future breakdown of the Executive (or indeed that it really would have done in this case if the Executive had not re-formed in January 2020). We would therefore question whether linking funding to the formation of the Executive would ever really be seen as a credible threat.30

Dr Sean Haughey, University of Liverpool, concluded that “the notion of withholding resources from public services so as to encourage political agreement seems inherently unfair to citizens in Northern Ireland”.31

12.Other witnesses argued that the use of such an incentive by the Government was justifiable. Dr Birnie acknowledged that the question whether the incentive was necessary was “difficult” but observed that “perhaps it was necessary in the sense that without it no agreement would have been reached”.32 The sustainable waste management firm, Indaver, commented that Government funding should “absolutely be linked to the functioning of the devolved institutions”.33

13.We received evidence questioning the equity of the decision in the New Decade, New Approach agreement to link funding for public services in Northern Ireland to the restoration and operation of the devolved institutions. Although we understand this argument, we recognise the Government’s rationale of using the incentives available to it to encourage the restoration of, and commitment to, devolved government after a prolonged suspension. The Government’s focus must now be on helping to foster stable devolved government in Northern Ireland, where politicians deliver on their commitments to transform public services, so that such an incentive is rendered redundant in future.

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