Tonight, given there’s an election in the making, I wanted to focus on my own patch – Derry. This piece might be a bit technical in nature, and for that I apologise, but nonetheless the contents of it need to be said, for it is something that needs to be put in front of the noses of those parties who sit, and have sat, at the Executive in Stormont for the last decade.
Stormont gets its funding from three sources – the much-maligned ‘block grant’ of about £10bn per year from Westminster, the Regional Rate, which is part of domestic and non-domestic rates we pay, and the third, little known about, Reinvestment and Reform Initiative, hereafter referred to lovingly as the RRI.
Thew RRI is effectively a loan from the UK Treasury specifically for use in infrastructure projects; roads, hospitals etc. It was created in 2003-4 to help modernize public services. The Executive borrow from the Government to build infrastructure, seems fairly transparent. If only.
The RRI allowed us to borrow £125 million in 2003-04 and, from 2014-15, a longer term borrowing facility initially capped a £200 million per year. Bear in mind that the DUP, UUP and SF have all held, or hold, infrastructure portfolio or finance portfolio in the Executive in the last ten years. SDLP held the DSD portfolio a number of times and Alliance held the Justice portfolio. All sat at the Executive table.
Now that I’ve set the scene, the rest of the piece will be broken down into two sections – the ruin of the RRI, and what was actually spent, where.
Wrecked for political convenience
At this point I should remind you that the RRI is a loan mechanism, we pay it back every year to the UK Government – in 2012-13 we had to pay back about £100m per year, so it is something we all pay for – and it is there for infrastructure.
Here’s what is actually happening.
The Stormont House Agreement and Fresh Start Implementation Plan provided flexibility for the Executive to use £700 million of capital borrowing to fund a public sector voluntary exit scheme over a four year period, with £200 million in 2015-16, £200 million in 2016-17, £200 million in 2016-17 and £100 million in 2018-19.
The ‘Fresh Start’ Agreement also provided an additional £350 million of borrowing for infrastructure projects with a profile over four years with £100 million in 2015-16, £100 million in 2016-17, £100 million in 2017-18 and £50 million in 2018-19.
So, in essence, we have borrowed money earmarked for infrastructure in order to make people redundant – and added to that debt by asking for more loans to build the projects the loans were supposed to be for in the first place.
As part of this, I asked the Department of Finance to outline when, in the last five years, RRI money had been used to fund anything other than what it was intended for. Here is their response.
“In 2010-11 RRI borrowing of £36.9 million was used to fund the costs of an NICS Equal Pay claim.
The Stormont House Agreement and Fresh Start Implementation Plan provide flexibility for the Executive to use £700 million of capital borrowing to fund a public sector voluntary exit scheme. In 2015-16 additional borrowing of £183.5 million was undertaken to make funding available for the voluntary exit scheme. The figures for 2016-17 will not be finalised until after the end of the financial year.”
So, more borrowing for a redundancy scheme.
Finally, I asked the Department of Finance a bit of an awkward question to allay any doubts, and deny any politicos out there the opportunity to spin the story. If any reallocations of funds from the RRI have to be signed off by the First and Deputy First Minister. Their response?
The use of RRI borrowing for non-capital purposes would be a matter for the Executive and may only be done with Treasury approval.
So now, for Derry’s share. For the avoidance of doubt, I asked for a list of all projects across NI funded by the RRI, and some of them just don’t fit into constituencies, so any projects that have had any benefit to the City I have included, such as the Derry-Dungiven road, and North West Regional College funding although there is no proof that this was spent in Derry, but could have been spent in other campuses.
5.42% of all infrastructure spending in the North since just 2011-12 has been spent for the direct benefit of the City.
I thought putting this in a small chart might help solidify it in your mind.
The blue, all of RRI spending in NI, with the red, that money spent in Derry.
Let’s get down to brass tacks.
What did Derry get?
In 2011-12, 16 projects were approved at a cost of £375 million. Of these, 1 was primarily Derry-based, Gransha Mental Health unit, which received £6.9 million.
In 2012-13, 15 projects were approved at a cost of £151.8 million. Of these, 3 were identified as being in, or of benefit to Derry – Gransha Mental Health Unit, A5 to Strabane and the Coleraine-Derry rail line, though this is mostly outside of the City. In total, these three projects attracted £32.6 million.
In 2013-14, 13 projects were approved at a cost of £195.9 million. Of these, 2 were Derry-based or of benefit to us. Altnagelvin Redevelopment and the Coleraine-Derry line which both totalled £3.3 million.
In 2014-15, a massive 27 projects were approved at a combined cost of £259 million. Of these, 2 were Derry based, or of benefit – Altnagelvin Redevelopment and the A5 Western Transport Corridor. They totalled £11.35 million.
In 2015-16, 21 projects were approved at a total of £295 million. Of these, only one was Derry based, Altnagelvin Redevelopment costing £4.5 million.
In 2016-17, a whopping 34 projects were approved at a cost of £136.3 million. Of these, Derry had four projects – Altnagelvin Redevelopment, the A6 Derry-Dungiven, Coleraine-Derry line refurbishments and funding allocated to North West Regional College – although as aforementioned it is possible none of this specific funding was spent in Derry. All of these cost £18 million.
Out of a possible £1.4 billion pounds of spending, Derry attracted £60.2 million.
ALL major political parties, who are all running candidates in Foyle, were in the Executive during this time, indeed the Deputy First Minister and Environment Minister were from this City.
When the parties knock your door, perhaps you’ll ask them why 5.24% is good enough for Derry?