BY DAVID YOUNG AND MICHAEL MCHUGH – 26 MAY 2015
Northern Ireland's faltering power-sharing Executive has lurched towards another crisis after the Assembly voted down a bid to implement welfare reforms in the region.
The fall of the already long-delayed proposed legislation, prompted by Sinn Fein and SDLP opposition, leaves the stumbling administration facing a budgetary black hole estimated at around £600 million.
Unless political leaders can agree a lasting deal on welfare in the coming days and weeks, there is the very real prospect of a senior civil servant stepping in to take over departmental spends later in the summer, under tight financial constraints.
Such a scenario, where the parties are effectively relieved of spending responsibility, would undoubtedly increase the chances of one of the main partners in the Executive - the DUP and Sinn Fein - walking away and collapsing the institutions.
In the absence of any local accommodation, the Democratic Unionists have suggested another alternative option - namely, the UK Government stepping in to implement welfare legislation over the head of the devolved five-party administration.
But Downing Street has shown no appetite for such a move, which would also likely be a resigning matter for Sinn Fein.
Introducing the last Conservative/Lib Dem government's welfare reforms in Northern Ireland, after a two-year delay, was a key plank of December's Stormont House Agreement - a deal that had been heralded as resolving a range of destabilising disputes at the heart of power-sharing.
The fall of the Welfare Reform Bill has now endangered other elements of the accord struck at Stormont House between the five members of the mandatory coalition and the British and Irish governments, such as the devolution of corporation tax powers and new structures to address the legacy of the Troubles.
But, of more immediate concern, it poses an existential threat to the Stormont Executive, as ministers have failed to remove the burden of Treasury penalties for non-implementation, which are currently running at around £10 million a month.
The DUP has warned the Executive now has to bridge an "unsustainable" £600 million funding gap.
While initially backing the welfare element of the Stormont House Agreement, Sinn Fein baulked three months later, claiming that Executive-funded top-up schemes to protect claimants set to lose out under the new benefits system were not as comprehensive as it believed were envisaged in December's negotiations.
Sinn Fein, the SDLP and the Assembly's sole Green Party representative used a contentious voting mechanism to effectively veto the Bill today.
The "petition of concern" device meant that even though a majority of MLAs voted for the legislation, it fell because it could only be passed with the support of a majority of both nationalists and unionist members in the House.
DUP First Minister Peter Robinson was absent from today's lengthy debate after suffering a suspected heart attack yesterday.
His party colleague, social development minister Mervyn Storey, claimed the SDLP and Sinn Fein had backtracked on the deal.
"They want, like Pontius Pilate, to wring their hands, to almost cleanse their consciences that somehow they had not signed the dotted line," he said.
"It was a five-party agreement. I believe that we have now obtained the balance between what in an ideal world we would like to do and what we can afford to do."
But Sinn Fein Deputy First Minister Martin McGuinness blamed "Tory cuts" for the impasse.
"The current crisis has come about solely through the actions of the British Government, it could only be resolved by the actions of the British Government," he said.
"They have attacked the most vulnerable in society, slashed the budget for public services and undermined the credibility of these institutions.
"There is still time for the parties and the British Government to deliver a new budget that delivers.
"If a choice has to be made to stand side by side with the Tories or stand up for the people here, for our economy or public services, I know what side Sinn Fein will be on."
SDLP deputy leader Dolores Kelly said the party's concerns about the welfare legislation had not been listened to.
She said they would defend those most in need.
"We are fed up with the side deals and the bad grace that often exists between Sinn Fein and the DUP and that we all have to suffer from," she said.
Ulster Unionist Roy Beggs said the old benefits system that had been replaced in the rest of the UK was "costly and complicated".
"Let's be clear - there's no money tree, there's no going back asking for more money, we've been there lots of times over the past three years," he said.
"There were the crunch talks around Christmas last year and we got the offer of a settlement at that stage, so if we do not approve this Bill there will be even less money for health, less money for education and less money for departments and other publicly funded bodies.
"If this Bill is approved, the potential of further penalties and further unplanned departmental cuts will be averted."
Alliance Party leader David Ford said the Stormont House Agreement had seen a balance struck between supporting benefit claimants and maintaining front-line services in a time of constrained public finances.
"It is the job of a responsible government to make those difficult decisions," he said.
"It is great to be in government at a time of expanding finances, at a time of nice opportunities, at a time when ministers can appear in front of cameras and smile at things, but the reality of government is we need to learn to take difficult decisions to deal with difficult hands when we are played them at difficult times and to be realistic and accept those.
"And, in that respect, it does seem to me that Sinn Fein and the SDLP have to prove they can be responsible around budgetary matters in difficult times."
Away from Belfast, the Irish Republic's foreign affairs minister Charlie Flanagan said the development had serious implications for the stability of the political institutions at Stormont and for the implementation of the whole of the Agreement.
"The Government agreed that every possible effort must be made to encourage and support the Northern Ireland Executive parties to reach an agreement on welfare reform that is both politically acceptable and financially viable."
He added: "As well as providing a template for financial stability in Northern Ireland, the Stormont House Agreement represents an agreed way forward for addressing the contentious legacy of the past.
"These are gains worth fighting for and, working with our partners, the Government is determined that the potential represented by the Agreement will be realised."
What happens next?
The latest crisis over the non-implementation of welfare reforms in Northern Ireland has thrown the future of the power-sharing Executive in Belfast into real doubt.
Here are a number of scenarios for the coming days and weeks as the prospect of an Assembly collapse looms.
1. Sinn Fein want the parties in Northern Ireland to come together, along with civic society, to resist what it brands as "Tory cuts".
The republican party insists the case must be made to David Cameron that the region should be treated as a special case to reflect the difficulties still presented by the legacy of 30 years of conflict. It wants more economic levers to enable Stormont to generate income and has urged leaders in Scotland and Wales to join NI parties in an "anti-austerity" coalition.
Sinn Fein has claimed the election of a majority Conservative government in London has made the need for such a stand all the more important, warning that further multi-billion pound welfare cuts are coming in George Osborne's July budget.
However, any demand for a more generously funded welfare system is likely to be rebuffed by the UK Government, which has continually insisted it will not treat benefit claimants in Northern Ireland any differently to those in Great Britain.
2. The Democratic Unionists have suggested that Mr Cameron's government steps in to implement welfare cuts over the head of the devolved administration.
While the Government retains the right to legislate on any matter in the UK, convention dictates it should seek the support of a devolved institution before intervening on an issue under its control. To date, the Government has shown no appetite to take back the reins of any devolved matter.
Taking such a drastic step could well prompt Sinn Fein to withdraw from the Executive, triggering the collapse of the Assembly.
3. The Government convened a talks process last autumn that produced the now under-threat Stormont House Agreement. The Government may consider calling another round of formal negotiations in a bid to resolve the impasse.
With the Treasury insistent no new money will be offered, it is debatable what such a process could achieve.
However, it could provide some breathing space for local politicians to finally reach their own accommodation.
4. In the absence of welfare reform legislation, the chances of securing political agreement on implementing a workable budget for the current financial year are slim to none.
DUP Finance minister Arlene Foster has warned that failure on welfare reform will see the Executive having to absorb an additional £600 million of cuts. If the Executive parties do not agree to implement those cuts, a senior civil servant will be forced to take control of the departmental purse strings.
However, that individual would be subject to severe restrictions, with only a proportion of last year's annual spend able to be allocated. Under such restraints, already reduced public spending would be subject to dramatic further cuts.
5. The resignation of DUP First Minister Peter Robinson or Sinn Fein Deputy First Minister Martin McGuinness at any point in the coming weeks would force the collapse of the Assembly.
Although unlikely, the Government could also pull the plug on the powersharing institutions. If Mr Cameron forced a fall it could lead to another period of direct rule, where London-based ministers could implement welfare measures free from influence by local politicians.
If Mr Robinson or Mr McGuinness resigned, an Assembly election would likely follow soon afterwards. But a reconstituted Assembly would still face the same problems over welfare reform.