STANDARDS OF PUBLIC EXPENDITURE IN NORTHERN IRELAND
By PETER ROBSON
THE financial relations between the Exchequers of Northern Ireland and the United Kingdom have been described elsewhere in this book. It has been explained that the principle underlying existing arrangements is that of parity of taxation, parity of services. More precisely, there is to be absolute parity in the cash social services and relative parity in the other services according to Northern Ireland's special needs. In addition it has been agreed that Ulster is to be permitted to incur additional expenditure for the purpose of making up "leeway" in the social services.
The purpose of this section is to present briefly some estimates which show how these principles and their earlier variants have affected, and are affecting, the level and distribution of transferred expenditure. It must be said at this point that the notion of parity is not precise and little is known of the way in which it has been interpreted, except in a few fields. The simplest way to interpret parity is to define it in terms of equality of expenditure per head of population. This is inadequate, however, for it is in some sense parity of standards which underlies existing arrangements, and parity of expenditure will only produce parity of standards if the cost of providing a service and the need for it are the same in the two regions. It seems reasonable therefore, to interpret parity to mean that level of expenditure which will produce equivalent standards of benefit or service. This is, in fact, the way in which parity has been interpreted so far as the cash benefit in social security services is concerned. Here, conditions of eligibility and rates of benefit are identical in the two regions, and parity emerges automatically. Regional levels of expenditure are automatic reflections of differences in need.
In the field of the social services given in kind, such as the Health Service, and in relation to other public services, what is meant by parity of standards is by no means as clear. Here, qualitative comparisons and judgments of need are necessary, and the scope for administrative discretion is considerable. Actual rates of expenditure on these services reflect that discretion, and they must be evaluated in the light of what is known about the special conditions of the province.
It can probably be assumed that, taking into account the special conditions of Northern Ireland (greater sparsity and dispersal of population, geographical position, etc.), the costs of providing particular real services of an equivalent standard to those in Great Britain will be, in general, at least as high as the cost in Great Britain. It may be possible to provide some services of equivalent standard at lower cost, on account of different and more efficient methods of administration, but these cases are likely to be of limited importance.1 In____________________