Watchdog supports claim that NI underfunded compared to other nations

An independent watchdog has supported the claim by Stormont ministers that Northern Ireland is currently underfunded compared to Scotland and Wales.

However, the NI Fiscal Council has warned that the Treasury is unlikely to be persuaded to release more money.

The council found that Scotland and Wales are currently funded above their levels of assessed need while NI is at or slightly below its assessed funding need.

It said it is "mathematically possible" that Stormont could get between £1bn and £3.5bn extra per year if it was funded like the other devolved administrations.

"This is only one of the options available to Treasury, and it does not seem the most likely," it added.

The council has also assessed the Treasury's "open book" review of Stormont's finances.

The controversial review suggested ministers would have £3bn a year extra to spend on public services if they increased rates, introduced water charges and made thousands of workers redundant.

It also found that the health service in Northern Ireland was dramatically less efficient compared to England.

The Fiscal Council said it "broadly agrees" with the direction of the review but questioned some of the specific conclusions.

It said: "Some of the estimates - particularly regarding the scale and pace of achievable savings in health - appear to contrast with the work of other experts."

The council made the comments in its annual review of the sustainability of Stormont's finances.

It has warned that the continuing failure to bring forward a budget "weakens the normal mechanisms of scrutiny and carries increasing risk of overspending as the year progresses."

The Executive has failed to reach agreement on a draft budget which the Finance Minister published in January.

Stormont departments have been operating under emergency budgeting processes since the start of the financial year in April.

Ministers have been attempting to persuade the Treasury to come up with more money before they will pass the budget.

The council has warned that even if a budget is agreed Stormont will continue to experience structural financial problems.

Sir Robert Chote, Chair of the Council, said: "There is nothing especially mysterious about the challenge here.

"Spending pressures are rising, funding is not keeping pace, and the gap between the two will need to be closed one way or another

"The longer-term pressures will not resolve themselves, and the sooner they are addressed in a systematic way, the better the prospects for putting NI's public finances on a more sustainable footing."