Committee publication · Correspondence · 3 June 2026

Correspondence with the Secretary of State relating to the Northern Ireland Executive budget and the Public Sector Transformation Fund, dated 22 May and 01 June 2026.

From: Northern Ireland Affairs Committee

Summary

Correspondence between the Northern Ireland Affairs Committee and the Secretary of State for Northern Ireland regarding the 2026-27 budget impasse and Public Sector Transformation Fund. The Committee expresses concern about the Executive's failure to agree a budget nearly two months into the financial year. The Secretary of State outlines UK Government support efforts, defends the funding settlement (£19.3bn annually, 124% needs-based), and announces £102.6m in approved transformation projects across health, communities, finance and agriculture.

Key findings

Northern Ireland Executive has failed to agree a budget as of June 2026, creating uncertainty for public service delivery and departmental planning.
Secretary of State confirms four meetings with Minister of Finance (13, 16, 29 April and 21 May) and engagement with all party leaders to resolve the impasse.
UK Government funding settlement: £19.3bn annually over Spending Review period, above independently assessed need level of 124% (worth £1.4bn additional over 2024/25-2028/29).
Second tranche of Public Sector Transformation Fund: £102.6m allocated to six projects, including £42m for ePharmacy (Department of Health), £29.2m for Together for Families (partnership with National Lottery Community Fund), £16m for Pathway to Work programme.
Executive has recommended five further transformation projects pending agreement of multi-year budget; first tranche projects show design-phase progress with expectations of improved delivery and outcomes in next phase.

Tone

Procedural

Topics

public-financedevolved-governmentbudget-processpublic-servicestransformation-funding

Key actors

Hilary Benn MP, Tonia Antoniazzi MP, John O'Dowd MLA, Northern Ireland Executive, National Lottery Community Fund, UK Government, Department of Health

Notable line

“This is creating a significant degree of uncertainty for Northern Ireland departments and their ability to deliver effective public services.”

Key Quotes

“… now nearly two months into the new financial year, Northern Ireland remains without an agreed budget. This continued delay creates significant uncertainty for the delivery of public services”
— Tonia Antoniazzi MP · Opening the Committee's concern about the budget impasse

“… it is very concerning that this far into the financial year the Executive has failed to agree a Budget. This is creating a significant degree of uncertainty for Northern Ireland departments and their ability to deliver effective public services.”
— Hilary Benn MP · Acknowledging the severity of the budget situation

“I have been speaking regularly with the Minister of Finance John O'Dowd MLA about the challenges facing the Executive in agreeing a Budget. I met with him on 13 April, 16 April, 29 April and 21 May”
— Hilary Benn MP · Detailing engagement efforts to resolve the impasse

“Northern Ireland is receiving £19.3bn in funding per year on average over the Spending Review period. This is the largest funding total in real terms in the history of devolution”
— Hilary Benn MP · Defending the adequacy of the UK funding settlement

“… the Executive needs to come forward with a detailed, strategic plan for how they will move towards fiscal sustainability and live within their budget”
— Hilary Benn MP · Setting conditions for UK Government support

“The Government's £102.6 million investment is a clear signal of this Government's commitment to supporting the Executive to deliver better public services”
— Hilary Benn MP · Highlighting the second tranche of transformation funding

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Source · parliament.uk record ↗