UK ministers have offered Northern Ireland a financial package that they say is worth £2.5bn on condition that the Stormont executive is revived.
Chris Heaton-Harris, the Northern Ireland secretary, made the offer at a roundtable meeting of party leaders on Monday against a backdrop of political deadlock, budget overruns and crumbling public services.
The move will increase pressure on the Democratic Unionist party (DUP) to abandon a boycott of power-sharing that has paralysed the Stormont executive and assembly amid a mounting fiscal crisis.
The package would include a new funding formula for public services and a lump sum to settle pay claims that have led to industrial action by education, health and transport workers.
Downing Street hopes the package, combined with parallel negotiations with the DUP over post-Brexit trading arrangements, will persuade the DUP leader, Jeffrey Donaldson, to restore Stormont after almost two years of political stasis.
Donaldson welcomed the offer as a “first step” but ruled out any immediate breakthrough. “This is a process and I don’t believe it is a process that is going to be corralled into a few days here,” he told reporters outside Hillsborough Castle, which hosted the talks.
“I think it puts on the table an offer that begins to address some of the issues that are at the heart of the shortfall in our budgetary arrangements,” Donaldson said. “Does it go far enough? No. Is more work required? Yes it is.”
Stormont is expected to overspend by £450m this year, rising to nearly £1bn if pay rises for Northern Ireland’s public sector workers were to match those in other UK regions. Heaton-Harris’s package includes a stabilising fund to give a new executive a fiscal cushion for four years, additional powers for the executive to spend money, and an extension on a payback period for previous overspends to five years.
Party leaders are to return to Hillsborough for additional talks on Tuesday and Wednesday. Donaldson said he did not view that as a deadline.
Earlier, health workers chanted “shame on you” and “get back to work” at the DUP delegation as it entered Hillsborough.
Other party leaders said the financial package was insufficient but that they could lobby for improvements if Stormont was revived.
“You can’t understate the underfunding and what that has meant for public services here,” said Michelle O’Neill, Sinn Féin’s Stormont leader. “All of that is academic with the question of is there going to be an executive restored, are the DUP going to join the rest of us and take this fight right to the heart of the British government. That question remains unanswered.”
Colum Eastwood, the Social Democratic and Labour party leader, urged Donaldson to act. “We’ve had enough now of waiting for Jeffrey, it’s time for him to lead,” he said.
The Ulster Unionist party leader, Doug Beattie, predicted that talks between the government and the DUP would continue into next year, leaving the secretary of state and civil servants to run the region on a form of autopilot.
The Alliance party leader, Naomi Long, said Northern Ireland needed long-term solutions. “For us this is not about a short-term fix, it is not about dangling baubles at us before Christmas and getting everybody to rush back and say that this will be resolved immediately,” she said.
The DUP collapsed Stormont in protest at checks on goods entering Northern Ireland from Great Britain that it said undermined the region’s position in the UK.
There is speculation that Downing Street may offer tweaks such as labelling changes, which could mean marking goods as “for sale in Scotland, England and Wales” rather than “for sale in the UK only”. A senior Sinn Féin figure said the party would have no problem with that.
