The Northern Ireland Executive overspent its budget by more than £500 million in 2023 and 2024. The UK Treasury previously waived repayment of those amounts. Such waivers will not continue.

The Northern Ireland Fiscal Council forecasts a £450 million overspend for 2025/26. Future transfers from London will reduce to cover this deficit. Northern Ireland relies on UK funding for 25 per cent of its GDP to meet public spending needs.

Public sector employment in Northern Ireland stands at 7.7 per cent of total jobs in administration, including civil service and police. Broader public sector work, covering education and health, makes up a third of employment there. This exceeds levels in England, where public administration is 4.4 per cent of jobs and the broader sector a quarter.

UK fiscal constraints limit resources for public services across the country. Northern Ireland may cut public sector jobs, skip pay increases or raise local taxes to close gaps. Residents do not pay for water, unlike in the rest of the UK.

Transfers from London assume uniform public service employment profiles across regions. Northern Ireland's higher shares mean funding falls short of costs for recent public pay rises.