The bulk of public money is spent in greater Belfast area, leading to serious variations in economical and social outcomes. Surely the purpose of government is to improve the wellbeing of the population as a whole, not just a part.
Investment is needed to produce returns that can be measured in economic, social or environmental terms — sometimes all three. That can be true for businesses, but also for governments. All of which makes public sector investment choices important and politically contentious.
There have been criticisms for decades the UK Government prioritised investment in the most wealthy areas at the expense of deprived regions. HM Treasury uses its ‘Green Book’ as part of its assessment of investment proposals. The government recently completed a review of the Green Book and its use.
The review states: “There have been long-standing concerns about the extent to which the Green Book and the way it is used unfairly limits government investment in areas outside of London and the south-east of England.”
For London and the south-east of England, read in Northern Ireland terms Belfast and greater Belfast.
One reason for the south-east England bias is that statistics may be interpreted to suggest continued growth in an area already doing well will generate a greater and more reliable return than new investment in a deprived area.
In an effort to reverse the trend of supporting the strongest at the expense of the weakest, the Boris Johnson-led Conservative government introduced its ‘levelling-up’ agenda. In practice, this only touched the margins of the economy. It was sidelined first by Covid, and then by Johnson’s fall.
Now the UK has a different government, which shares some of the same ambitions, but with a different way of doing things. Labour has prioritised reform of the Green Book. As part of this it intends to work more closely with local and regional government to achieve ‘place-based’ strategies that improve specific places.
This should enable individual projects to work in a more aligned way as part of a clear strategic objective. While this probably sounds obvious, in terms of Whitehall (and I suggest Stormont) this is revolutionary.
In essence, it is saying senior officials should view towns and cities from close quarters, as if walking round them, rather than flying over them in a drone. If this revised approach is to work it needs robust data, research and analysis.
This requires a different skill set than is often evident in the Civil Service and local government. The analysis will be backed by a UK-wide assessment of infrastructure needs, which will consider how existing infrastructure meets the needs of its communities and helps deliver essential local services.
The government’s review concludes the Green Book is particularly poor in addressing transformational change: it is essentially reactionary, rather than anticipatory. This undermines UK-wide capacity to adjust and lead economic and social change. Officials will need in future to make risk-based judgments, including whether a place has sufficient resilience to economic shocks.
The government concedes the Green Book often has a disproportionately large influence on final investment decisions, with limited process transparency. There can be poor public and Parliamentary oversight of major investment decisions.
The expensive farce that is HS2 demonstrates the need for a major overhaul of large government investment decisions. The railway was to have run from London to Manchester, but will instead now end halfway, at Birmingham. It was projected to cost up to £38bn for the original route: it’s now feared the shorter route will cost £100bn, with trains not even able to travel at full speed along the entire length.
For civil servants here and Stormont politicians, the question that needs to be asked is whether our investment processes mirror those of Whitehall and Westminster. We certainly have, in the A5 road, our own version of the HS2 absurdity.
And we also have very serious variations in economic and social outcomes across Northern Ireland. The public in Derry loudly complains at Belfast being better treated, as do people in Fermanagh. Yet west and north Belfast also suffer very high levels of deprivation. Divisions here go far beyond the traditional religious differences.
The employment rate is 10% lower and disposable income per person 25% less in Derry and Strabane than in Lisburn and Castlereagh. Yet the majority of public investment is in the greater Belfast area.
(There is a shortage of collated, reliable data on this, but AI programme Grok concluded 60% to 70% of public investment is located within greater Belfast. Detailed statistics on deprivation in Derry and Strabane are included in my report on the north west economy, published on holywelltrust.com.)
The purpose of government is surely to improve the wellbeing of the population as a whole.
Improving the conditions of those in greatest hardship is not merely a matter of seeking equality and being benevolent: getting people into work increases tax revenues and reduces the cost of welfare benefits, while potentially creating a more harmonious society.
It therefore makes sense for investment decisions to include a focus on improving social and economic conditions in the most marginalised parts of our society, ensuring that those places function as well as they can.
That seems to be the purpose of the UK Government’s reforms to HM Treasury’s Green Book. Over now to Stormont and the Northern Ireland Civil Service for their response.