Secretary of State James Brokenshire made the following statement outside Stormont House this afternoon.
Speaking after this afternoon’s deadline for the formation of a new Northern Ireland Executive, Mr Brokenshire said "It is extremely disappointing that an Executive has not been formed in Northern Ireland today.
"There will be widespread dismay across the community.
"Over the past three weeks we have been engaged in intensive talks and progress has been made on a number of issues.
"These include work to set a budget, a Programme for Government and ways of improving governance, transparency and accountability for politics here in Northern Ireland.
"We have made further moves forward on agreeing a way to implement the Stormont House legacy bodies to help provide better outcomes for victims and survivors of the troubles.
"In addition there was progress made around how Northern Ireland’s interests would be represented in our negotiations to leave the EU as Article 50 is triggered on Wednesday.
"Yet it is also clear that there remain significant gaps between the parties, particularly over issues surrounding culture and identity.
"Throughout this process the UK Government has been active in making positive proposals to try and bridge these gaps and help the parties to move things forward.
"Despite these efforts, agreement at this stage has not proved possible.
"This will have impacts.
"We are rapidly approaching the point at which Northern Ireland will not have an agreed budget.
"This is not sustainable and will have consequences for public services.
"From Wednesday financial resources to allow Northern Ireland’s Departments to deliver key public services will fall under the control of the Northern Ireland Civil Service.
"I believe that there remains an overwhelming desire among the political parties and the public here for strong and stable devolved government.
"I have spoken to the leaders of each of the main Parties this afternoon and there is no appetite for any alternative.
"I will be making a Statement in Parliament tomorrow on next steps.
"We now have a short window of opportunity to resolve outstanding issues and for an Executive to be formed.
"Everyone owes it to the people of Northern Ireland to grasp that and provide the political leadership and the stability they want."