NI Govt 'In Real Trouble' Over Budget Row

Northern Ireland's devolved government is facing suspension or possible collapse amid a row over welfare reforms that has left the faltering administration facing an estimated £600m funding gap.

The crisis has been sparked by the failure of the assembly to pass a welfare reform bill agreed in Westminster in 2013.

The nationalist parties at Stormont introduced a petition of concern, effectively a veto, which requires any bill to have sufficient support from both unionist and nationalist parties to go through.

Sky's Ireland Correspondent David Blevins said the fall of the legislation means the devolved government is in "very real trouble".

He explained: "In short, the devolved government never implemented the welfare cuts agreed in Westminster in 2013.

"The parties finally reached agreement on a way forward last Christmas, the Stormont House agreement.

"But Sinn Fein had a change of heart in March of this year and withdrew its support for the bill.

"The problem is that Sinn Fein finds itself in a difficult position. It cannot be anti-austerity in the Republic of Ireland but push through an austerity budget in Northern Ireland."

Blevins added: "David Cameron will now have to decide whether he triggers a suspension for the first time in eight years or allows the devolved government to fall and move to an election."

Unless leaders can agree a lasting deal on welfare in the coming days, a senior civil servant could be forced to step in to take over departmental spends later in the summer.

This would likely increase the chances of one of the main parties in the Executive - the DUP and Sinn Fein - walking away.

In the absence of any deal, the Democratic Unionists have suggested another option - the UK Government stepping in to implement the welfare reforms over the head of the devolved administration.

However, Downing Street has shown no appetite for this, and such a move would likely be a resigning matter for Sinn Fein.

DUP social development minister Mervyn Storey claimed the SDLP and Sinn Fein had backtracked on the Stormont House agreement.

He said: "They want, like Pontius Pilate, to wring their hands, to almost cleanse their consciences that somehow they had not signed the dotted line."

But Sinn Fein Deputy First Minister Martin McGuinness said "Tory cuts" were to blame for the deadlock.

He said: "The current crisis has come about solely through the actions of the British Government, it could only be resolved by the actions of the British Government."

The fall of the bill has also endangered other elements of the Stormont House accord struck between the five members of the coalition and the British and Irish governments, such as the devolution of corporation tax powers and new structures to tackle the legacy of the Troubles.