The Northern Ireland Department of Finance commissioned the Fraser of Allander Institute to carry out a lessons learned analysis on the establishment of Fiscal Councils and Commissions.
This has been motivated by two aims:
- To discuss the issues to consider in order to meet the commitment in the New Decade New Approach (NDNA) document to establish a permanent Fiscal Council; and
- To discuss the issues to consider if the NI Executive wished to establish a temporary Commission to consider new fiscal powers for NI, including the role of the permanent Fiscal Council in this, beyond the requirements as set out in the NDNA.
In 2020, the New Decade New Approach (NDNA) agreement restored power sharing in Northern Ireland. It was designed to represent a fair and balanced basis upon which to restore the institutions that had been created by the Belfast (Good Friday) Agreement.
The period since power sharing collapsed has seen significant powers transferred to the Scottish and Welsh Parliaments, following comprehensive reviews of the devolution settlements for each country. No such comprehensive review has been carried out for Northern Ireland, where the purpose is to increase the financial accountability of the parliament.
The Commissions in Scotland and Wales are discussed in this document, with the lessons learned from these processes drawn out in detail. This includes a discussion of what devolution has meant in practice, what the wider infrastructure implications are, and what the impact has been on the budgets of devolved governments when these new powers were exercised.
Enhancing and improving fiscal management, credibility and planning is also a key part of NDNA. An explicit part of the agreement is to establish a Fiscal Council. We discuss the principles which should be considered in setting up such an institution, such as transparency, accountability, independence and look at examples of such bodies in the UK and Ireland.
The Fiscal Council for Northern Ireland can serve the purpose required of it by the Executive and Assembly to increase the confidence in fiscal responsibility. However, while it may have a different remit, there is much to learn from the other bodies in the UK and Ireland, particularly around remit, membership, resourcing, relationship with government and information sharing. We discuss these lessons and what they could mean for the new NI Fiscal Council.
Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.