O’Neill and Little-Pengelly press new Prime Minister for urgent action on NI funding crisis

The First Minister Michelle O’Neill and deputy First Minister Emma Little-Pengelly are pictured with Prime Minister Andy Burnham. 

Northern Ireland’s First and deputy First Ministers have pressed new Prime Minister Andy Burnham for urgent action on Stormont’s finances, warning that the current funding settlement is leaving the Executive struggling to properly plan, invest in and reform public services.

Michelle O’Neill and Emma Little-Pengelly raised the issue directly with Mr Burnham during his first official visit to Northern Ireland since entering Downing Street, with the Executive seeking a longer-term funding deal which it argues would put Northern Ireland on a fairer footing with Scotland and Wales.

The meeting comes at a particularly difficult point for Stormont. Ministers have still not agreed a Budget for the current financial year and departments have been operating on contingency arrangements since April. Mr Burnham, however, dampened expectations of an immediate injection of additional money earlier on Thursday, saying he was in “listening mode” and wanted to help move discussions forward.

Public services at heart of funding dispute

For households across Northern Ireland, the argument ultimately centres on how much money is available for services including health, education, infrastructure and other areas of public spending — and whether Stormont has sufficient certainty to plan improvements over several years.

First Minister Michelle O’Neill said the challenges facing those services were now too significant to allow further delay.

“The challenges facing our public services are too serious for any further delays and we raised these issues with the Prime Minister directly. We are not funded on the same basis as Scotland and Wales, and that cannot continue. People here should not be expected to accept poorer public services because of a funding system that fails to recognise our needs.

“We need a fair funding settlement that allows us to invest in and transform public services, while decisions on British Government funding streams must respect devolution and provide the flexibility needed to deliver what works best for people here.

“What matters now is action, and we will continue to engage with the Prime Minister, the Chancellor and the Treasury until we secure the fair funding settlement that the people here deserve.”

The Executive’s argument over comparative funding requires some qualification. Northern Ireland currently benefits from a 24% needs-based factor in the Barnett formula, designed to reflect its higher assessed spending needs.

The UK Treasury has previously maintained that the latest Spending Review funds the Executive above 124% of comparable UK Government spending in England in every year, describing the needs-based adjustment as worth an additional £1.4 billion between 2024/25 and 2028/29.

However, the dispute is not simply about whether Northern Ireland is funded at its assessed level of need. Executive ministers argue that Scotland and Wales receive funding further above their respective assessed needs and that Northern Ireland should receive comparable treatment.

Department of Finance calculations cited at Stormont have suggested that funding Northern Ireland at the equivalent Welsh level could mean around £1 billion more each year, while matching the Scottish position could mean around £3 billion more.

‘Sustainable financial settlement’ needed

Deputy First Minister Emma Little-Pengelly described Thursday’s talks with Mr Burnham as constructive, but also stressed the need for urgency.

“We had a constructive meeting with the Prime Minister and welcome the positive discussion around how best to work together to deal with these issues and to do so urgently.

“We have been very clear that the Executive needs a sustainable financial settlement which allows us to properly plan and invest in public services for the people of Northern Ireland.

“It was also useful to raise a number of other issues with the PM such as the need for a clear plan for economic growth across the UK, how there can be no further delay in resolving outstanding issues around Housing Executive borrowing powers, access to the National Wealth Fund and finding a resolution to the Funding of Victims’ payments.

“We will continue to work constructively with the Prime Minister, Chancellor and Treasury and remain committed to securing a sustainable funding position for Northern Ireland so that we can deliver the real change we want to see.”

Stormont facing its own difficult decisions

The financial pressure comes against a backdrop of continuing disagreement within the Executive over its own Budget.

The independent Northern Ireland Fiscal Council has warned that the 2026-27 financial year presents particularly difficult pressures. Its assessment highlighted the loss of £520 million in temporary UK Government support which benefited 2025-26, alongside the recovery of previous overspending and new spending commitments.

The Fiscal Council has also pointed to Northern Ireland’s comparatively limited fiscal flexibility, including tighter constraints than Scotland and Wales over carrying money between financial years and borrowing.

That means the funding dispute has two dimensions: the Executive is seeking more sustainable support and flexibility from Westminster, while Stormont ministers must themselves reach agreement on how the money available to them should be divided and confront pressures including overspending and public-sector pay.

Burnham promises to take concerns back to London

During his visit on Thursday, Mr Burnham said he wanted to help “move things forward” on the Stormont Budget difficulties and would take what he heard during meetings with Northern Ireland’s political parties back to London.

The Prime Minister also praised the working relationship between Ms O’Neill and Ms Little-Pengelly, describing their ability to work together despite significant political differences as a potential “model” for politicians elsewhere in the UK.

Downing Street has presented Mr Burnham’s visit as part of a wider effort to establish a more collaborative relationship with the devolved administrations. He has also announced plans to bring the leaders of Northern Ireland, Scotland and Wales together in October as part of a National Economic Council focused on economic growth.

For Stormont, however, Thursday’s meeting produced engagement rather than a new financial settlement. The immediate test will be whether those talks translate into movement between the Executive and Treasury — and whether Northern Ireland’s ministers can in turn reach agreement on their own Budget.

Until both happen, the uncertainty hanging over the funding and long-term planning of Northern Ireland’s public services remains unresolved.