Stormont funding: Michelle O'Neill rules out 15% regional rate increase

The first minister Michelle O'Neill has ruled out increasing the regional rate by 15% as a means of revenue raising.

It comes amid a dispute between the UK government and the executive over the terms of a £3.3bn financial package for restoring devolution.

The government has asked local ministers to raise a minimum of £113m.

But Stormont parties want more funding from the Treasury and said they did not commit to revenue-raising as part of the deal agreed with the government.

Rates are a property tax which help fund public services in Northern Ireland.

Speaking at a joint engagement at a women's centre on the Shankill Road in west Belfast, Michelle O'Neill ruled out the rise.

"I am ruling out a 15% rates increase," the first minister said.

The Sinn Féin deputy leader said Northern Ireland currently "isn't funded properly" and that they hoped to meet with the Treasury to discuss the issue in the coming days.

"We need proper funding if we're going to be able to turn that around and deliver good public services and tackle things like childcare," Michelle O'Neill said.

"So we're in the middle of that discussion. There was an offer put on the table before Christmas. There was some conditionality presented in that paper - we haven't signed up to that.

"But what we are in the middle of is an ongoing discussion. We hope to be at the Treasury's door in the coming days."

Deputy First Minister Emma Little-Pengelly, of the Democratic Unionist Party (DUP) said it was the "wrong time" to be proposing revenue-raising.

"We'll be making the case very strongly that hard-pressed families in Northern Ireland are under enough financial pressure at the moment, and therefore this is the wrong time for this sort of proposal," she said.

"Of course we will look at reform, look at sustainability in the long term.

"What we're saying to the UK government is help support us to stabilise the Northern Ireland Executive, the assembly and our public services here.

"That requires support. It doesn't require those conditions to be put on to make life even more difficult the big challenges that we are going to be facing together."

The firm stance by Michelle O'Neill against increasing the regional rate came as the permanent secretary of Stormont's Department of Finance began giving evidence before a Northern Ireland Assembly scrutiny committee.

Neil Gibson told Stormont's finance committee that his department has not been asked to begin work on revenue raising.

He added that he was "not surprised" at the content of the letter from the Treasury, but said certain elements only came out on Tuesday.

He said that revenue raising was always mentioned as one element in the conversation.

The Department of Finance has just completed a consultation on revenue raising through rates.

Rates are the property taxes paid by households and businesses in Northern Ireland.

The measures being consulted on included ending rates discounts for manufacturing businesses and increasing the rates paid on the most valuable houses.

In theory these could bring in as much as an extra £128m a year.

However, none of these measures could be in place for the start of the new financial year in April.

If, as the UK government wants, Stormont is to raise more money from the start of the new financial year, the only realistic option is an across the board increase in rates.

In recent days ministers have ruled out any dramatic increase, however an inflation-only increase would still mean adding at least 4% to bills.

When asked by the committee chair Matthew O'Toole if at any point he had been instructed to begin work on revenue raising, Mr Gibson replied that he had not.

Questions were also asked around the financial package and when figures and details first emerged.

Mr Gibson said the department only got official confirmation of the financial package figures on Tuesday, and while many figures were discussed in December, those details were only confirmed yesterday.

On Tuesday, the finance minister wrote to the Treasury saying she had "serious concerns" with its letter detailing the £3.3bn financial package.

Caoimhe Archibald said the current offer does not provide a "sustainable solution" to public sector pay demands.

She said the requirement to raise £113m of additional funds within 12 months would "only serve to cause more harm to hard-pressed families, households and businesses".

The minister added it was "not acceptable" to make a £559m debt write-off from previous years conditional on the implementation of a sustainability plan.

It is understood the government wants this plan to be published by May.