The UK government has tabled an increased financial package of £3.3 billion (€3.8bn) to stabilise Northern Ireland's finances and support the return of the Stormont Executive.

A previous £2.5 billion (€2.9bn) package had been described by political leaders as not high enough.

Northern Ireland Secretary Chris Heaton-Harris outlined the new offer during meetings with parties at Hillsborough Castle.

He said the package addressed the concerns raised by the parties and described it as "a final offer".

The proposals include:

  • Up to £584m for public sector pay claims as a non-repayable reserve claim.
  • A new Welsh-style needs-based funding formula for Northern Ireland.
  • To cover backdating of the funding formula, a £1.125 billion stabilisation fund will be concentrated into two years.
  • A Stormont budget overspend of £559 million will be deferred for two years and then written off when a returning Executive publishes and implements a fiscal sustainability plan.
  • A dedicated fund of more than £600m for a transformation plan, with at least £150 million ringfenced for transformation projects.
  • An extra £34 million to tackle hospital waiting lists in Northern Ireland.
  • Some £15 million to the PSNI to deal with impacts of a major data breach
  • An enhanced investment zone worth £150 million to be created
  • Northern Ireland’s annual capital borrowing limit will be increased over five years, worth an extra £135 million by 2028/29.

Mr Heaton-Harris said: "This morning I have brought forward a new plan which reasonably and generously responds to the parties' concerns and provides Northern Ireland ministers with an offer for a restored Executive worth in excess of £3 billion.

"This package provides solutions to many of the issues the parties have raised.

"The parties have asked for a new formula on how much Northern Ireland receives from the UK government.

"We have agreed to establish such a formula reflecting the different levels of need in Northern Ireland.

"That would see funding uplifted through the Barnett formula by 24%.

"The parties have asked for assistance with public sector pay. This package includes £584 million to address this."

Mr Heaton-Harris said it is now the time for decisions to be made on the restoration of power-sharing in Northern Ireland.

"It is disappointing that there will not be a new Executive up and running to take up this offer and deliver it for the people of Northern Ireland before Christmas.

"However, this package is on the table and will remain there, available on day one of an incoming Northern Ireland Executive to take up. This is a generous package.

"The UK government has also held extensive talks with the Democratic Unionist Party on the Windsor Framework over the last eight months.

"From our perspective, those talks, all the issues of substance have reached a conclusion.

"These financial talks have concluded and there is a financial package worth in excess of £3bn on the table should the Executive be restored.

"From our perspective the Windsor Framework talks, all issues of substance have effectively concluded, but we are always happy to answer concerns and questions on this. It is now the time for decisions to be made," Mr Heaton-Harris added.

No final post-Brexit agreement with govt - DUP

The DUP leader said there had been no final agreement with the UK government over post-Brexit trading arrangements.

Speaking at Hillsborough Castle, Jeffrey Donaldson said: "In relation to the Windsor Framework, the Northern Ireland Protocol and the discussions we’ve been having with the UK government, we are very clear, there is not yet agreement finalised on the issues of substance and we will continue to engage with the government to get to the point where that agreement is reached.

"We are not for giving up, we want to get this right, it is important for the future of Northern Ireland within the United Kingdom that we secure the change that is required to restore our place within the United Kingdom and its internal market."

On the financial package offered to restore Stormont, Mr Donaldson said: "We will study the other aspects of the offer that has been presented by the secretary of state, we will consider that.

"It remains our view that there is not yet a basis within that financial offer to deliver the financial stability that Northern Ireland needs in the years ahead."

He also said the UK government should settle public sector pay disputes in Northern Ireland ahead of any return of the Stormont Executive.