“Sinn Féin achieved a welfare system better than the one in Britain, by an average of £94m per year…” – Redux

Back in February 2015, this was Sinn Féin’s original line on the welfare cuts mitigation schemes agreed at the first Stormont Castle Agreement.

…Sinn Féin from 2011 onwards opposed the proposed welfare cuts and insisted welfare protection was absolutely fundamental for all citizens.

“That is why Sinn Féin politically campaigned against welfare cuts alongside trade unions and grassroots communities.

“This principle guided our strategy during the Stormont House negotiations and why, in December last, when the other four Executive parties agreed to a deal on welfare, Sinn Féin refused to do so and kept negotiating.

“By standing firm against the London-Dublin Tory axis, Sinn Féin achieved a welfare system better than the one in Britain, by an average of £94m per year. [added emphasis]

That agreement would have seen funds diverted from the NI Executive’s Block Grant into the mitigating schemes over 6 years at a total cost of £564million.

When Sinn Féin subsequently reversed ferret, Martin McGuinness claimed that the deal struck at Stormont Castle was to protect payments made to present and future recipients of welfare in several categories – and that a further £200million was needed “to protect the most vulnerable in our society”.

The Irish News’ John Manley identified the problem

The nub of the problem appears to lie in the figures contained in the Stormont Castle Agreement, an agreement within an agreement negotiated between the five parties days before the final accord was signed off on December 23.

In annex A of this sub-agreement, the figures for the planned welfare safety net are outlined.

It earmarks £413million over the next six years for dealing with the transition from Disability Living Allowance to Personal Independence Payment.  A further £125m is allocated over six years for assisting those impacted by changes to other benefits, including the disability premium and the benefits cap – the so-called Supplementary Payment Fund.

However, whereas Sinn Féin appears to have previously accepted that £125m provided adequate protection, revised figures suggest it would actually cost nearly four times that amount if everybody – new and existing claimants included – were to be topped up to current benefit levels. [added emphasis]

This time, the DUP and Sinn Féin have only made financial commitments for the next 4 years – which allows the headline figure to read £585million “to ‘top-up’ the UK welfare arrangements in NI”.  [More than £564million! – Ed]  Indeed.

But the £585million includes a mitigating scheme for an entirely new category of cuts that was implemented elsewhere after Stormont Castle was brought down by Sinn Féin – in-work tax credits.

As the BBC report notes

The last Stormont deal included a mitigation package on welfare reform that amounted to £564m over a six-year period.

The new deal includes a four-year programme, with a value of £585m.

The cash will be split, with £345m for measures designed to mitigate the welfare changes.

The remaining £240m will be spent on measures to help families who will lose out on tax credits.

And £345million over 4 years works out at £86.25million per year on mitigating the same welfare cuts that previously Sinn Féin had, eventually, declared £94million per year was insufficient “to protect the most vulnerable in our society”.

For cover, they have invoked “a small working group under the leadership of Professor Eileen Evason” to handle the detail.

Here’s the relevant section of the latest Fresh Start [pdf file].

Executive Welfare and Tax Credits Enhancements

1.1 The Executive has agreed to allocate a total of £585 million from Executive funds over four years to ‘top-up’ the UK welfare arrangements in NI with a review in 2018- 19. This sum incorporates the present discretionary fund.

Year 2016-17 2017-18 2018-19 2019-20

Agreed Amount £135m £150m £150m £150m

Welfare £75m £90m £90m £90m

Tax Credits £60m £60m £60m £60m

1.2 The Executive will establish a small working group under the leadership of Professor Eileen Evason to bring forward proposals within this financial envelope (including administrative costs) to maximise the use of these additional resources.

1.3 The Executive has agreed to implement the findings of the working group within the financial envelope available.

1.4 Within the welfare funding set out above, it has been agreed that the social sector size criteria – the so called bedroom tax – will not apply, as agreed by the Executive.

Pete Baker