A pharmacy lab, two schools and a higher level learning block in Londonderry paid for on the never-never through lengthy private finance contracts contribute to over £52billion in long term public liabilities in Northern Ireland, according to an institute for public sector accountants.
The Chartered Institute of Public Finance and Accountancy (CIFPA) has launched what it bills the “first ever comprehensive study of the net financial position of devolved public sector services in Northern Ireland public sector.”
CIPFA’s Northern Ireland Balance Sheet, compiled using the financial statements of devolved public sector bodies, estimates that the country currently owns £51.8bn of assets and owes £51.3bn in liabilities.
Whilst public pension liabilities account for 85 per cent of this £51.3billion, at least £5billion of the total relates to Private Finance Initiative (PFI) projects, which involved private companies stumping cash up front for public infrastructure projects in return for annual payments for terms as long as 30 years. These included the Western Trust pharmacy lab at Altnagelvin, the North West Regional College (NWRC) Northland Building and the St Cecilia’s and St Mary’s rebuilds in Londonderry.
The report explains: “Other long term liabilities amount to just over £5bn which include commitments for PFI projects.
“The Northern Ireland Audit Office has previously reported that there is scope to take a more strategic approach to existing PFI arrangements and to take opportunities to seek further efficiencies and operational savings. Consequently, this could make some impact on the liabilities position.”
However, by far the most significant portion of the liabilities, an estimated £43.6 billion, relates to public service pensions. And while the Northern Ireland Assembly has passed the Public Service Pensions Act (Northern Ireland) 2014, which paves the way for pension changes in terms of costs to the sector, management of pensions liability will continue to have an impact on available resources in the future.
Rob Whiteman, CEO of CIPFA said: “We’re delighted to publish the first ever Balance Sheet for Northern Ireland.
“A balance sheet is hugely valuable to any enterprise in providing a picture of what is owned and what is owed. Within Government it is a crucial tool for managing public services and for achieving fiscal sustainability.
“We hope that the release of our Balance Sheet for Northern Ireland will help stimulate debate among politicians, policymakers, and public service professionals and encourage them to budget more effectively for the medium term as well as improve the transparency in financial reporting.”