Water charges and rates increase could help Stormont 'raise £3bn a year'

Stormont ministers would have £3bn a year extra to spend on public services if they increased rates, introduced water charges and made thousands of workers redundant, a Treasury review has suggested.

The open book review of Stormont's finances was conducted after the Executive overspent by £400m last year.

The review concludes that the Northern Ireland public sector employs relatively many more people than in England.

It draws on analysis by the independent Fiscal Council watchdog to reach that conclusion.

It suggests that if the civil service was cut back to the equivalent size of the service in England it would save almost £400m a year.

However, it adds that this example is "illustrative" and does not account for all caveats.

It also suggests that ending the current policy of "pay parity" could save as much as £2.5bn a year.

The details of the review were first published by the Press Association.

Pay parity is the principle that public sector workers in Northern Ireland, such as teachers and nurses, should get broadly equivalent pay to those in other parts of the UK.

The breaking of parity for some jobs in recent years had led to strikes and other industrial action.

The Treasury review also considers revenue raising options.

It suggests that raising domestic rates, a property tax on houses, to match the level of council tax in England would raise more than £400m a year.

That would see the typical rates bill rise from around £1,200 to almost £1,800.

It suggests that on top of that introducing water charges of around £465 per household would bring in a further £357m.

The review was originally intended to be a joint exercise between the Treasury and the NI Department of Finance.

In the end it was a Treasury only report.

A senior official recently told MLAs that the Department of Finance effectively withdrew because it was not given the time to check the Treasury's assumptions and calculations.