To ask the Minister of Finance, further to the Interim Fiscal Framework, how her Department intends to provide independent evidence to Treasury in relation to the needs-based factor.

Dr Archibald

I was pleased to sign an interim fiscal framework on behalf of the Executive last month. That is a significant early milestone towards putting our finances on a more sustainable footing. Following intensive and constructive negotiations, I secured a significant commitment from Treasury that it will review how the Executive are funded. That includes reviewing our relative need if multiple independent and credible sources provide evidence that it is higher than 124%, which I believe it to be. I have established a new team in my Department to take forward the important work to agree a final fiscal framework. One of its first tasks is to consider how to build on the robust independent evidence base that we already have thanks to the work of the Fiscal Council.

Dr Archibald

We have established the team, and we have nominated officials to form it. As the Member will be aware, a certain degree of expertise is required to take forward that work, and it is important that officials with that expertise are part of the team. It is really important for us, as a Department and an Executive, that that work be taken forward. We will ensure that adequate resources are put into it, including for work on how we might provide the additional evidence that may be required in the time ahead.

Ms Á Murphy

How much additional funding will be available to the Executive following the signing of the interim fiscal framework?

Dr Archibald

Following the agreement of the interim fiscal framework on 22 May — luckily, we got it over the line just before the general election was called — the needs-based factor of 24% will apply from 2024-25 to new Barnett consequentials arising since the Executive were restored in February 2024. It will apply when the Executive's relative funding falls below their relative need of 124%. The funding provided in the financial package that accompanied restoration will be exempt from that calculation, which means that the 124% will apply in 2024-25 and 2025-26 even if, by Treasury calculations, the financial package brings the Executive's funding above 124%. The application of the 24% needs-based adjustment factor to the spring Barnett consequentials will, on its own, provide us with an additional £24 million to allocate in June monitoring. It is also anticipated that significant additional funding will arise from the Westminster Main Estimates, but they will not now be confirmed until after the election.

Dr Aiken

Minister, the Fiscal Council gave recent evidence to the Finance Committee indicating that our current level of funding may, indeed, be above the 124% level. Will the Minister give us an assessment of where, she thinks, our level is at the moment and the likely difference between the two?

Dr Archibald

The analysis from the Fiscal Council is based on including the financial package in the calculation, and its calculation put it at around 125% or 126%. Obviously, we argued to the Treasury that it was the financial package and our baseline still sits well below that at in and around 120% or 121%. Therefore, we successfully made the case that we are still below need and that the 124% needs-based adjustment should be applied this year and next year. Thankfully, we got that over the line. However, as the Member will be aware — I have made the point on a number of occasions — that funding is relative to what goes into public services in England. If public services in England are not properly funded, which evidently they are not, we do not have enough money to run our public services either.

Mr O'Toole

The Minister mentioned the fiscal framework. A Joint Exchequer Committee has been set up. That has a precedent in Scotland and Wales, but what does not have a precedent is something that we have not heard very much about: the public sector transformation board. Will that board completely undermine devolution? At the minute, we do not know who will be on the board. Will it be Whitehall officials? What role will it have in making the core decisions on public services and spending here?

Dr Archibald

As the Member will be aware, the public sector transformation board was included in the financial package and is specific to the allocation of the £235 million that has been earmarked for transformation, on the basis of £47 million over each of the next five years. The Executive have agreed to it. My approach to the setting up of a transformation board is that it will do important work that, we all recognise, needs to be taken forward to transform and reform our public services. The basis of the transformation board is to evaluate the bids that come in to ensure that they meet a threshold of being transformational. It is important work. I do not believe that it undermines devolution in any way, because it will be for the Executive to decide what projects are taken forward. We all recognise the importance of ensuring that the parameters of devolution are respected.