Stormont is trapped in a permanent financial crisis. In the last year alone, it overspent by more than £450 million, and on current projections this could rise to £1 billion within the next financial cycle.
On paper, the explanation given by the mouthpieces of British imperialism on this island is simple. Stormont doesn’t raise enough to cover its public spending, leaving a shortfall equivalent to 25 percent of regional GDP. This is then plugged by supposedly ‘generous’ UK subsidies via the Block Grant, which allocates money to the Six Counties based on spending patterns in England. But this ‘simple’ fact conceals the real issue.
Nearly from its foundation, the artificial statelet carved out of Ulster for Britain’s imperialist benefit has depended on external support. Faced with its own crisis, the British Treasury is now stepping back and demanding savage cuts from the North.
In the words of the NI Fiscal Council, this is now threatening a “cliff-edge reduction in real funding for public services in 2026-27.”
The effects in a region already dilapidated by years of austerity will be nothing short of devastating.
British capitalism in crisis
British capitalism is stagnating. Lloyds Bank expects growth for the year to record at a measly 0.5 percent. With UK government debt currently sitting at 93 percent of GDP, Britain’s bondholders are becoming jittery, and are demanding greater cuts from Starmer’s Labour to soothe their nerves.
For the North, the message from the Treasury is clear: Stormont must “live within its means.” In a particularly cynical move, in place of a lump sum to cover the deficit of Stormont, this year the Executive was handed a loan of £400 million from Westminster.
In effect, Stormont is spared from having to implement the worst of the austerity before the next Assembly election – but only at the cost of having to add loan repayments amounting to £80 million in 2026, and £160 million in both 2027 and 2028 to their future overspends. This represents nearly a quarter of the budget increase of the Block Grant heading into future years. And all of this is just to cover this year’s overspend.
With the Restoration Sum granted to the Executive in 2023/24 set to expire, added debt could not come at a worse time. Westminster covered Stormont to the tune of £584 million to fund public sector pay deals following the 2023 public sector strike that saw over 150,000 workers take to the streets.
But these pay deals are themselves set to expire within the next year, and officials are worried about Stormont’s ability to continue funding such settlements.
The pressures driving the current deficit are themselves revealing. The primary cause of overspending has been the effort to maintain pay parity for public sector workers. This is because per capita, the North has a relatively larger public sector than England.
And now conditions threaten to go from very bad to much, much worse. The Fiscal Council outlined the decisions facing Stormont with remarkable bluntness:
“Do we want to match parity with the pay levels elsewhere? Do we want to continue to have as large a public sector workforce as we have relative to elsewhere? Do we feel the need to raise more revenue… Are there savings you can make elsewhere?”
Translated into plain language, this amounts to a single question: are ‘we’ prepared to sacrifice the living standards of workers and youth?
Already, public services and infrastructure are in a state of decay. 26.4 percent of the population of the North are on a healthcare waiting list, and over 50,000 families are awaiting social housing. Already, the living standards of workers and youth in the Six Counties are below those across the rest of Ireland and Britain.
And now, Westminster is strangling the region’s finances even more. Significant austerity measures are getting prepared.
Sinn Féin
In all of this, it is important to examine the role that Sinn Féin – which holds both the First Minister position and the Finance Ministry – is now playing.
The party points to Westminster and argues that the problem is insufficient funding, plus the sectarian, obstructionist politics of their partner in Stormont – the DUP. This is all undoubtedly true. First and foremost it is the British and Unionists establishment that are to blame for the crisis in the North.
But while complaining, Sinn Féin’s political strategy in practice has been to dutifully carry out British austerity all the same. Not only this, but in their latest budget proposal, they have placed the greatest burden not on the wealthy or big business, but on workers. Household rates, for instance, are set to rise by 5 percent, compared to a smaller 3 percent increase for businesses.
The point is that the party is constrained by its acceptance of capitalism and, in effect, of the existing setup in the North – within which it hopes to achieve a United Ireland – all while courting the votes of the middle classes. Its broader strategy is to demonstrate to the ruling class that it can responsibly manage capitalism. Therefore, when cuts need to be implemented Sinn Féin will implement them in a ‘responsible’ way.
But after years of this strategy, many working-class nationalists will undoubtedly be left wondering, what has it all been for? Casement Park remains derelict, justice for victims of British state violence continues to be denied, and the prospect of a border poll – dependent on the discretion of the Secretary of State – remains as distant as ever.
With Stormont elections scheduled for May 2027, and all parties in electoral mode, this is unlikely to change. The DUP is as intransigent as ever. Sinn Féin has no plan B. All this while the world is on the brink of a new recession. As long as this rotten political setup remains, conditions for workers in the North will continue to deteriorate. The only path forward – is to build a socialist alternative – to fight for a Socialist United Ireland.
