Storey welcomes report on cost of division in society

Finance Minister Mervyn Storey today welcomed the independent report on the ‘Cost of Division’ in Northern Ireland society.

The report, undertaken by the Ulster University Economic Policy Centre, is part of the Stormont House Agreement.  The Department of Finance and Personnel commissioned the independent audit of departmental spending to identify how divisions in society might impact on the delivery of goods, facilities and services.

The Minister said: “The report provides a much needed update on the cost of public service provision in a Northern Ireland context.  Its findings clearly demonstrate the significant complexity in the cost of delivery of services – costs that cannot be merely attributed to the context of a divided society.”

Mervyn Storey continued: “The report identifies an estimated range of additional annual public service costs relative to other comparable regions in the UK.  The conclusion identifies a cost range of approximately £400 million to £800 million per annum, which is only in part caused by the need to provide services in a divided society.”

The report has found that, whilst the cost of public service provision is generally higher in Northern Ireland than in comparative regions in the UK, the costs typically fall within the same range as other regions. The exception to this lies in the area of policing provision, which accounts for over half of the estimated additional cost.

The report found that in general, the cost of public sector service delivery can be higher across regions for a number of reasons, including:

• Higher level of ‘need’
• Local policy decisions and priorities
• Historical lack of decision-making
• Inefficient and / or outdated service delivery models
• Divided society 

The Minister commented: “It’s no surprise to anyone in Northern Ireland that the majority of the cost estimates contained in the report are attributed to the delivery of policing and justice here.

“However the report makes it clear that these additional costs do not necessarily represent potential budget savings which could be realised by the Executive. In some instances that may be the case, but in others the costs identified are unavoidable or would require significant investment to ameliorate.”

Other findings in the report include:

• The cost per prisoner in NI is higher than the rest of the UK
• Average school class sizes in NI lower than in England
• Surplus school places, better than Scotland, same as Wales, much higher than England
• NI spend on health is similar to Scotland but higher than England & Wales
• NI spend on religious and community services is higher than every other region in the UK
• NI spends more on recreation services than any other part of UK

Mervyn Storey said:  “The Ulster University Economic Policy Centre has conducted a meaningful and detailed report which will help to inform the next Programme for Government.  The new Executive will have to consider how best to address these issues as they strive towards a shared future.”

A Cost of Division report carried out by Deloitte in 2007 identified an upper ceiling of £1.5billion. Using updated methodology, UUEPC has benchmarked costs with comparable regions across the UK to identify the range of £400m to £830m per annum.

Notes to editors: 

1. On 22 January 2015 the Executive, as part of the Stormont House Agreement (SHA), agreed that there should be an independent audit of departmental spending to identify how divisions in society might impact on the delivery of goods, facilities and services, and to then consider how best to reconfigure service delivery in a manner consistent with the Shared Future concept. This follows on from a 2007 report by Deloitte (commissioned by OFMDFM) which estimated a £1.5 billion cost of division.
2. The report identifies an estimated range of additional annual public service costs relative to other comparable regions in the UK. It then uses these costs to provide a basis on which to estimate the potential cost of division in Northern Ireland. The conclusion identifies a cost range of approximately £400 million to £800 million per annum, which at least in part is caused by the need to provide services in a divided society.
3. It should be noted that the majority of these cost estimates are attributed to the policing and justice sector.
4. The report states that it should not be concluded from this research that these additional costs identified represent potential savings which could be realised by the Executive. In some instances that may be the case, but in others the costs identified are unavoidable or would require significant investment to ameliorate.The Cost of Division report can be accessed on the DFP website.
5. Further information on the content of the report can be obtained from the Ulster University Economic Policy Centre via: economicpolicycentre@ulster.ac.uk
6. Media enquiries should be addressed to the Department of Finance and Personnel Communications Office on Tel: 028 9081 6724 or Tel: 028 9081 6895. Out of Office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.

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