The Northern Ireland assembly today unveiled a £28m funding package aimed at reducing health service deficits of £38m and bridging the shortfall in expected European Union funding.

The department of health, social services and public safety (DHSSPS) has been promised £18m from the cash windfall found from "routine savings".

Describing the move as "clear and decisive action" by the Northern Ireland executive, finance and personnel minister Mark Durkan also announced a joint review - to involve the DHSSPS, the department of finance and personnel, and the economic policy unit - into the causes and consequences of the deficits.

Northern Ireland and border counties of the Republic of Ireland have been promised £366m from the EU as part of Peace II grants, made following the April 1998 Good Friday agreement.

However, delays in accessing the EU cash was threatening job losses and bringing uncertainty to the voluntary and business sectors, ministers were told. The business sector also benefited from a 50% cut in a proposed rate rise to 3.3% - in line with inflation and those in England.

"The executive has recognised the problems that remain, given that it will be some time into 2000-01 before the allocations from Peace II become fully available," said Mr Durkan.

"The approach announced today should resolve the problem of gap funding which has been a difficult issue for the voluntary and community sectors over the last number of months and leave no remaining cause for uncertainty."

The package also includes:

• £3m for free travel for older people from October;

• £2m gap funding to be added to the social inclusion/community regeneration executive programme fund;

• £5m to compensate for a reduced non-domestic regional rate.

The assembly has also set aside a further £2m to provide a safety net.