To ask the Minister of Finance for an update on the planned open book exercise with Treasury.

Mr O'Dowd

To strengthen our case for fair funding for public services, the Executive will work with Treasury to review the Executive's spending and pressures through an open-book review of departmental spending. That will support a fuller understanding of the significant challenges that we are facing. Locally, the demands being placed on public services are growing significantly while, at the same time, the cost of providing them is increasing. As such, that is an opportunity for the Treasury to gain a fuller understanding of the significant financial pressures that we, as an Executive, face in delivering public services. Each Department will have a crucial role in that work, as they are best placed to articulate the challenges in their areas. The process will be firmly grounded in the principles of devolution and will respect Executive autonomy in making funding decisions. It is intended that the exercise will be completed by mid-March, with the outcome of the process supporting the Executive in their efforts to agree a multi-year Budget. The review will inform wider discussions on Budget sustainability and negotiations on the fiscal framework.

Mr O'Dowd

While the reserve claim is very welcome and allows us some breathing space, the reality is that we have to pay it back: £80 million in 2026-27, then £120 million in each of the subsequent two years. That places further pressure on future-year Budgets, and when the Executive come to finalise those Budgets, that will have to be built into our calculations. It is vital that Departments balance their books. However, I accept that there is growing demand in the delivery of front-line public services. Ministers face significant challenges in delivering those services — in some cases to deliver the bare minimum — and balancing their books, so the balance has to be right. The open-book process is an opportunity for the Treasury to better understand the challenges that we face. The Treasury will have its views. We need to go through the open-book process, working together and with Departments, get to the point where we have an informed document, and then enter the necessary political negotiations, ensuring that this place is funded properly by the British Government.

Miss Hargey

Minister, you said that the open-book process could show how the Executive have been underfunded. Will you assure the Assembly that the exercise will not impinge on the Good Friday Agreement and the architecture around it?

Mr O'Dowd

I can give that assurance. I have been clear in my responses to the Treasury and others on this matter that that is non-negotiable. There will be no undermining of the institutions, the authority of Ministers or the authority of the Executive in relation to how we govern this place. That is how the process will be conducted.

Mr Harvey

Minister, during your ongoing work with the UK Treasury, have you called for a further assessment of and increase in the Northern Ireland level of need and our funding model?

Mr O'Dowd

There is already an agreement with the Government, as part of ongoing discussions in relation to the full fiscal framework, that the Holtham report will remain on the table and that further investigation into its findings will continue in relation to our level of need.

Mr Durkan

Can the Minister give any other example since 1998 in which the Treasury was brought in, or came in, to conduct a line-by-line examination of a devolved Government's Budget? What does this process mean for his stated ambition of securing greater fiscal devolution?

Mr O'Dowd

The open-book process is not a formal process. There is not a document sitting on a shelf in Treasury or in the Department of Finance that says, "This is an open-book process". The exact nature of the process is open to interpretation, and we, with the Treasury, will set the terms of reference. There may have been similar projects in the past under different titles or frameworks. I am not overly concerned about the title of the programme. Obviously, the terms of reference will be vital, but, as I said to Miss Hargey, there will be no undermining of Executive or ministerial roles. As for future and ongoing discussions around fiscal devolution, this strengthens our hand, because the Treasury and the British Government are going to have to understand the uniqueness of this place. They will have to understand that it has been underfunded for many years. Even the successful work that was done around the Holtham report brought us to a level of funding need. However, there was no recognition from the Treasury that we were still playing catch-up and that achieving the level of need of 124% for one year would not allow the Executive to fund services and have transformation. We have a very strong case in a number of areas, and the ending of the stabilisation fund is a very strong argument. The £520 million stabilisation fund came to an end abruptly. If you are going to have a stabilisation fund, it has to give the Executive time to stabilise public services and have a transformation programme in place.

Mr Speaker

We move on to topical questions.