4th Report – Economic growth in Northern Ireland: new and emerging sectors

The UK Government’s Industrial Strategy identifies eight sectors that will drive growth, and these map well on to Northern Ireland’s sectoral strengths, as well as the Northern Ireland Department for the Economy’s sectoral plans. There are, however, a multiplicity of central and devolved government missions and strategies, which fail to provide clarity for businesses on what the overall economic strategy is for Northern Ireland, and how it will be interpreted and delivered. (Conclusion, Paragraph 21)

The UK Government and NI Executive need to work together more closely on economic issues, aligning their strategies and co-ordinating their delivery. The NIO should set this out in the “economic vision” referred to in its annual report, and publish this within six months. In this “economic vision”, the NIO should include the steps the UK Government plans to take to deliver economic growth in Northern Ireland, and set objectives that are specific, measurable, achievable, relevant and time-bound (SMART). To that end, the NIO should note (in numbers) the additional economic growth, employment and productivity it expects this economic vision to provide. (Recommendation, Paragraph 22)

There should be a Northern Ireland representative on the Industrial Strategy Advisory Council, to ensure the voice of Northern Ireland’s business community can feed into policy development and ensure that the Strategy appropriately supports economic growth in Northern Ireland. (Recommendation, Paragraph 23) Support for SMEs

SMEs are the dominant business structure in Northern Ireland. If they are to innovate, take risks and build economic growth in NI, they need specific support, particularly in navigating dual market access to the EU and UK internal markets. Currently, the multiple bodies providing support in different areas may be confusing matters rather than helping. We welcome the Government’s commitment to establish the one stop shop 29 recommended in the Murphy Review, but there should be a mechanism that is wider in scope, creating a central hub for business support. (Conclusion, Paragraph 33)

The Government should establish a completely overarching one-stop shop for NI SMEs trading in goods and services. This facility should bring together support on accessing innovation funding, trading East-West, North-South and more widely in the EU, as well as wider business support to enable businesses to invest and grow. The Government must clarify when in the next financial year this one stop shop will be open for business. (Recommendation, Paragraph 34)

Intertrade UK has the potential to be a key source of advice and solutions for the UK Government, but its Board membership needs to be broader to ensure that the east-west trade challenges faced by GB-based businesses are considered. It has taken longer than necessary for the Government to establish Intertrade UK. We expect more agility now it is funded and its work programme is in place. We plan to engage with it and may suggest pieces of work for it to undertake. (Conclusion, Paragraph 39)

The Secretary of State should appoint a GB representative to the Board of Intertrade UK. (Recommendation, Paragraph 40) Unlocking economic growth

We have received no evidence to date that the Executive has a thought through or deliverable plan to address and reform the deficits in planning policy and processes. (Conclusion, Paragraph 55)

City and Growth Deals have the potential to support not only sectoral growth, but growth and increased prosperity across the sub-regions of Northern Ireland. To that end, future deals might include local government to a greater extent. While current deals are focused on much-needed capital investment, there remain concerns that a complementary skills element is not in place to ensure that this investment is sustainable. Northern Ireland’s productivity and skills challenges are long-standing and well known, as are its problems with infrastructure, energy and planning. We have ongoing concerns about the Executive’s effective use of the Skills Barometer 2023–2033 and the ability to maximise the opportunities to deliver policies. Given the UK Government’s economic growth mission and the responsibilities of NIO Ministers for supporting economic growth, they cannot be ignored by Whitehall. Without the facilitating infrastructure and connectivity in place, growth will be slower and concentrated in fewer places. (Conclusion, Paragraph 58) 30

Future City and Growth Deals should include greater powers for local government in Northern Ireland. Deals should also include complementary funding strands on both skills and core infrastructure. (Recommendation, Paragraph 59)

The ‘economic vision’ that the NIO is developing, including time-bound objectives as we recommend earlier in this report, should clearly set out how the Government will address the structural weaknesses associated with the largely devolved but unignorable policy areas of skills, energy, planning and infrastructure. It should align with the infrastructure strategy, on which the NIO has been working with the NI Executive. (Recommendation, Paragraph 60) Local Growth Fund

Tackling economic inactivity is one of the keys to economic growth. In Northern Ireland, this has been carried out largely by the community and voluntary sector using revenue funding. Under the forthcoming Local Growth Fund, the proportion of revenue funding will be severely curtailed due to a new 70–30 capital-revenue split. In our correspondence with the Government and in oral evidence from the NIO, we have not been given a justifiable reason for this new arrangement. We are concerned about the knock-on effect this will have on NI’s justice, social services and health systems. We are frustrated by the Government’s lack of movement on this issue, and believe the NIO has a duty to advocate better for organisations delivering economic activity programmes in NI. We are disappointed at the way the sector has been treated and the position in which organisations and recipients have been placed. This makes us question the effectiveness of the NIO in voicing the concerns of Northern Ireland in Whitehall. (Conclusion, Paragraph 72)

The Government should urgently reverse the capital-revenue split of the new Local Growth Fund in Northern Ireland. Failing this, the NIO should work with the Ministry of Housing, Communities and Local Government, HM Treasury and the NI Executive urgently to identify alternative and comparable sums of money for economic inactivity programming, such as through PEACEPLUS, and ensure the application process is expedited and streamlined. (Recommendation, Paragraph 73) 31