Northern Secretary Theresa Villiers has refused to rule out the British government taking over responsibility for welfare from the Northern Executive following the collapse of the welfare Bill in the Stormont Assembly on Tuesday.
As parties took stock of what would be the implications of the rejection of the welfare Bill, Ms Villiers said there was still some time to try to break the political deadlock while indicating that ultimately she may take control of welfare.
There was general agreement with the remarks of former DUP minister for finance Sammy Wilson that Northern Ireland is now entering "uncharted waters", with neither Ms Villiers nor the Northern Executive indicating any clear way forward.
And while the collapse of the Bill means the Stormont House Agreement, with its promise of £2 billion in grants and loan-raising measures, is put on hold, the British government nonetheless has included the “historic agreement” in its planned Westminster legislative programme.
The Northern Executive is facing an impending budget crisis after Sinn Féin and the SDLP used its vetoing power in the Assembly to block the final passage of the welfare Bill.
The Minister for Finance, Arlene Foster (DUP) warned this year's budget has an "unsustainable" deficit of £600 million. She said services such as health and education will face swingeing cuts.
Extra burden
Moreover, the Executive is also burdened with British government penalties of about £10 million a month for failing to bring in welfare change.
The planned devolution of corporation tax-raising powers to the Executive and a major public service redundancy scheme are also jeopardised because of the impasse over welfare.
The North faces a number of options. One is that Ms Villiers takes control of welfare, which the DUP has already requested. Another is that such will be the scale of the budgetary crisis that the permanent secretary of the Department of Finance will be compelled to take control from the politicians and impose a much-reduced budget.
And such is the degree of uncertainty that several politicians including First Minister Peter Robinson, currently being treated for a heart condition, have previously warned that the Northern Executive and Assembly may face collapse in the coming three to eight weeks.
Deputy First Minister Martin McGuinness has warned Ms Villiers it would be a “huge mistake” for her to take over welfare. He didn’t spell it out, but any such move could trigger Sinn Féin walking out of the Executive.
This in turn could precipitate Assembly elections. However, in such a scenario, Ms Villiers would have to weigh up whether elections would lead to a resolution of the welfare crisis or just create more stalemate and confusion.
Ms Villiers, who is meeting the five main parties separately to try to negotiate a way out of the current logjam, said she had to "reluctantly" consider the possibility of taking over welfare powers from the DUP Minister for Social Development, Mervyn Storey.
‘Current difficulties’
Mr McGuinness complained that the British prime minister David Cameron was refusing to meet him or to "engage in any attempt to resolve the current difficulties".
“The current crisis at Stormont has been created by the Tory government at Westminster and its dogmatic adherence to an agenda of austerity cuts,” he added.
Ulster Unionist Party leader Mike Nesbitt blamed Sinn Féin for the crisis and accused the party of putting its interests in the South above the interests of people in Northern Ireland.
