A fresh funding row is brewing between Stormont and the British government with the two at odds over who foots the multi-million pound bill for settling a historic holiday pay claim.
Tens of thousands of public sector workers across Northern Ireland, including thousands of police officers, are in line for a substantial windfall that is expected to put further pressure on the already cash-strapped executive.
The settlement of a holiday pay dispute dating back decades has been forecast to cost up to £200m over the coming years.
But the Department of Finance has signalled that minister Caoimhe Archibald plans to “negotiate a reserve claim” with the UK Treasury to meet what it terms “exceptional costs”.
However, a British government spokesperson told The Irish News: “It is for the Northern Ireland Executive to live within their settlement and manage their pressures.”
The dispute at the centre of the row seemingly developing between regional and central government relates to the underpayment of holiday pay, where historically overtime and other allowances were not factored in.
In 2018, an industrial tribunal ruled that unlawful deductions made from PSNI officers and civilian support staff’s holiday entitlements were in breach of European law rights.
The case prompted a deluge of claims by workers across the public sector, some dating back to 1998. Claims from private sector workers are less common, though their entitlement is the same.
A two-year limit on miscalculated pay claims was imposed in England and Wales in 2014 but the then former Stormont employment and learning minister Stephen Farry declined to do likewise, later claiming a cap would’ve been “counter-productive” and led to an “artificial cliff-edge”.
The magnitude of the claims over recent years has created a huge backlog in the north’s industrial tribunals system.
At the end of last year, there were some 285,000 claims involving 65,000 claimants lodged in the tribunal system, most of which are thought to relate to the historic holiday pay claim.
It has emerged that in 2023, with no minister in place, senior Department of Finance (DoF) officials made an offer to all civil service staff who’d submitted a tribunal claim, yet it failed to resolve the matter.
The body representing rank and file police officers has already won what is widely seen as a ‘test case’ for retrospective payments against the PSNI chief constable. However, the two parties have yet to agree on the quantum of the settlement and a formula for reimbursement.
Following the Supreme Court judgment on the PSNI case in 2023, negotiations between civil service officials and trade unions intensified.
But neither party will discuss the highly sensitive discussions ahead of a resolution – or speculate about how many tens of millions of pounds the settlement will cost.
Union representatives have previously claimed that any public or private sector employee who works overtime may be entitled to backdated holiday pay.
Who ultimate pays for the settlement is an increased area of contention between Stormont and Whitehall, with Finance Minister Caoimhe Archibald’s department insisting she will “be seeking to negotiate a reserve claim with Treasury given the existing pressures facing departments and the exceptional nature of the costs”.
“The NI Civil Service has had a holiday pay policy in place since 2020 and has been seeking to resolve retrospective claims through engagement with the trade unions,” the DoF spokesperson said.
After contacting the Treasury and the Northern Ireland Office for a response, a British government spokesperson told The Irish News that funding for the Stormont executive would grow in real terms in the next financial year, making it “the largest in real terms of any settlements since devolution”.
The Labour administration claims that when the “2024 restoration financial package” is factored in, the executive is “funded above their independently assessed level of relative need in 2025-26″.
“It is for the Northern Ireland Executive to live within their settlement and manage their pressures,” the spokesperson said.
“The UK Reserve 2025-26 will be used for unforeseen, unavoidable and unabsorbable pressures, as set out clearly in the consolidated budgeting guidance.”
