belfasttelegraph

Does Northern Ireland’s Executive really matter?

Posted on March 23, 2018 · Posted in Belfast Telegraph

Apparently it doesn’t much matter whether we have a functioning Executive to govern us – at least as far as the economy is concerned.  Invest NI told the Belfast Telegraph last week that its ability to promote Northern Ireland is not being hindered by the absence of an Executive. “Our international proposition is based on a skilled workforce, competitive cost base, a high quality of life and proximity to markets or customers,” explained its spokeswoman.  Others, such as the Federation of Small Businesses, took a different view, suggesting that the lack of an Executive is a drawback when attracting investment.

 

It is certainly a novel suggestion that investors are not too worried about there not being a government in place.  It also flies in the face of other analysis.  The most recent EY Economic Eye report on Ireland, for instance, suggested that the main economic negative for Northern Ireland is that there is no Executive in place to set budgets and make spending decisions.  Back in April last year all the major business representative bodies here made a united plea.  “Devolved government is the only option for maintaining our precious peace and allowing the people of Northern Ireland to shape their own destiny; a local Executive must be formed for the sake of Northern Ireland’s future,” they said.

 

Clearly any risk to peace is also a threat to business investment.  No one would sensibly deny that the Troubles not only killed thousands of people, it also destroyed investment opportunities, jobs, affluence and optimism.  Hopefully, neither the lack of an Executive nor the uncertainty over the post-Brexit border will lead to violence.  But foreign executives considering investment decisions are likely to at least give this a passing thought.

 

Nor is it just about this.  Devolution works.  At least, that is the assumption behind much of UK government policy.  It recognises that the modern economy is driven by strong city regions.  Those city regions gain strength through local decision-making that responds to local needs.  That is why City Deals are in place for the main conurbations in Great Britain (though not, yet, in Northern Ireland).  And it feels as if that policy is working.

 

Yes, there are cranes dominating the skyline in Belfast – but not on the scale of the construction activity I witnessed recently in Manchester and Cardiff, for example.  Greater Manchester is thriving off the back of its new status at the heart of England’s Northern Powerhouse.  And Cardiff has become a major financial services centre, helped by the city’s status as the capital of Wales.  Local decision-making does drive local economies, by matching skills with demand, understanding what transport investment is needed, giving their citizens pride in their place.

 

Yet Invest NI might have a point.  Perhaps in one sense it doesn’t make much difference whether Northern Ireland has an Executive.  The point of devolution is to enable local decision-making to take place.  And the Executive has been particularly bad when it came to making the most important decisions.

 

Take the NHS for a start.  We have had expert reports, from Donaldson and Bengoa, saying what needs to be done.  We have too many hospitals, not strong enough specialisms, too few doctors.  Yet key decisions were avoided.  It was the same with corporation tax – businesses wanted the cut to match the Republic’s 12.5% rate, the main parties agreed, but it didn’t happen.

 

Cutting the tax rate is not my priority economic policy initiative, but at least it would have been an implemented policy.  My starting point for action would have been to look at education and skills.  We are wasting too much money on our divided and duplicated schools system.  Too many children leave school without basic skills.  Further education colleges need to be more orientated to producing the skills needed in our economy.  We have far too few undergraduate places in our universities.

 

But taking those decisions would have required both a political consensus that appears impossible to achieve, and a political bravery that seems similarly absent.  Instead, political agreement was obtained around a spending programme such as the Social Investment Fund, which many neutral observers believe is not justified on any objective basis related to need or likely outcome.  And very little has been done about creating a truly shared, integrated society.

 

Meanwhile, the economic indicators underline the lack of progress.  Northern Ireland’s employment rate is 68.7%, the worst region in the UK and 6.5% below the UK average.  We have serious problems with poverty, low pay and benefit dependency.  Northern Ireland remains over-reliant on public sector employment.  And far too little has been done about regional imbalances within Northern Ireland – with development and investment over-focused on the East, at the expense of the West.

 

Dealing with these problems is, of course, difficult.  But if the focus in government had been on making Northern Ireland a more successful place, it should have been possible to achieve a consensus on what was necessary.  It is about raising productivity; improving infrastructure; increasing skills; extending high quality broadband connectivity; bringing down energy costs; improving public sector efficiency.

 

Some of these factors have been addressed, but not on the scale required.  We needed an Executive that would manage Northern Ireland out of crisis.  One that restructured the NHS, so that it is no longer struggling (and often failing) to cope.  One that ensured that every school pupil had the opportunity to excel.  We needed ministers that demanded excellence of senior civil servants – not told them not to take notes in case the public found out what was going on.  We needed politicians with the courage to take hard political decisions.

 

In short, the Northern Ireland Executive should have delivered what the people and the economy of Northern Ireland needed – rather than having political parties focused on their own narrow electoral bases.  And that, perhaps, is why Invest NI thinks it is not so important for its work that we don’t have an Executive.