29th September 2009

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The Independent Review of Economic Policy (IREP), chaired by the Vice-Chancellor, Professor Richard Barnett, today put forward a series of significant policy recommendations it believes will assist the Executive realise its goal of strengthening productivity and raising living standards in NI.

The Review was commissioned by Enterprise, Trade and Investment Minister Arlene Foster in December 2008 to advise on the extent to which existing policies are helping to meet this objective, as stated in the Programme for Government (PfG), and to put forward new policies if needed.

The Review Panel was asked to determine whether existing DETI and Invest NI policies, programmes and resources will sufficiently contribute to the economic goals of the PfG and to make recommendations designed to strengthen the NI economy.

Key recommendations put forward by the report include:

• Core economic functions (covering DETI and DEL areas of responsibility) should be brought under a single ‘Department of the Economy’

• The Executive should establish a permanent sub-committee, chaired by the ETI Minister, to prioritise action on the economy. The committee should oversee the development and implementation of an economic strategy, building on the findings of the IREP, as a matter of urgency

• More emphasis needs to be placed on developing a portfolio of policies to promote Innovation and R&D, and there are a number of specific recommendations in this regard

• Invest NI should have a more focused, dedicated and professional approach to strengthening export performance in both manufacturing and tradable services

• Invest NI should be allowed more freedom to operate, enabling the organisation to be more responsive to business needs

• A small business unit to be created within Invest NI, and the approach of working only with ‘clients’ should cease

Speaking at the launch, the Vice-Chancellor said:

 “We recognise that the Northern Ireland Executive has made a significant step in making the economy the top priority in the Programme for Government (PfG).  The Review Panel welcomes this move and our recommendations are designed to enable the Executive to make better progress in meeting their economic goals.

“However, the chief concern of the Panel is that, despite the high level of Invest NI support historically, the current portfolio of policies delivered by Invest NI has not made significant progress towards achieving the goal of improving productivity, which, as the report recognises, is the single most important measure to raise wages and living standards in NI.

“In acknowledging the positive impact that DETI and Invest NI have had in developing the economy, the Panel believes that there should have been a much greater emphasis on supporting value added investment during a period when the local economy was much stronger than it is currently.

 “The report calls for a significant realignment of the Invest NI budget to provide greater support for Innovation, R&D and Exports throughout the local business base.  This should also become the central plank in enabling the region to attract potential inward investors and integrate them more fully with local supply chains”

The Vice-Chancellor highlighted the importance of ensuring that Northern Ireland maximises its potential to deliver support to business in a faster and more co-ordinated way than our competitors nationally and internationally. 

He added: “In the report, we have emphasised not only the need to improve the focus of DETI / Invest NI policies and programmes, but also the importance of delivery of economic policy.  In making our recommendations, the Panel has consulted widely and conducted an in-depth analysis of performance.  Furthermore, we have carried out a review of global best practice in economic development to inform our recommendations for change.”

The Review report was welcomed by Enterprise Minister Arlene Foster , who said:  “I welcome the publication of the report. It has been prepared at a time when we are facing immediate economic challenges as well as looking to the future.

“The report contains a series of recommendations on policy issues relating to my department and Invest NI. It also refers to wider economic policy formulation across the Northern Ireland Executive.

“I will now give the report my full and urgent consideration and will work closely with my Executive colleagues, listening to their views and seeking a consensus on the way forward.

“Given the importance and complexity of the matters addressed, I also intend to carry out a short period of consultation on the report. Many organisations, companies and individuals will have an interest and will wish to comment on its analysis and findings. I will, of course, be seeking the views of the Assembly’s Enterprise, Trade and Investment Committee.

“I want to reach timely conclusions and to initiate purposeful actions, as soon as possible.”

And the Minister thanked the Vice-Chancellor and the Review Panel for their work.

 “I want to thank Professor Barnett and his colleagues on the Review Panel for providing such a substantial report. It is clear that they have worked extremely hard in addressing a wide range of highly important and complex issues.

“This Report is a major contribution to the debate on how we can achieve the economic goals outlined in the Programme for Government. I and my Executive colleagues are committed using all the tools available to us to raise living standards across Northern Ireland.”

ENDS

The IREP Report is available for download on www.irep.org.uk.

NOTES TO EDITORS:

1. Membership of the IREP Panel included Professor Richard Barnett, Chair, Professor Brian Ashcroft from the University of Strathclyde Business School and Board Member of the Economic Research Institute of Northern Ireland (ERINI); Dr Graham Gudgin, Centre for Business Research at the University of Cambridge; Professor Michael Moore from Queen’s University Belfast and John Wright, former international banking director and current Chairman and non-executive director of a number of companies in the UK and overseas.

2. The Review Panel also established a consultative group comprising practitioners with experience in deploying economic development policies in the UK and elsewhere. The group, which was used to discuss the key findings from the Review and the viability of the emerging recommendations, comprised Robert Crawford, South East England Development Agency; Sean Dorgan, Ulster Bank Group and former CEO of the IDA; Bob Downes, Openreach Scotland; Bro McFerran CBE, Allstate Northern Ireland and Paul Rooney, PriceWaterhouse Coopers.

3. *The NI Executive set the following goal as part of its Programme for Government ‘to halve the private sector productivity gap with the UK average excluding the Greater South East of England by 2015’. The Greater South East of England (GSE) has been excluded from the productivity benchmark because it is markedly different from the NI economy.

4. The Report takes into account important imminent changes with respect to Government support to businesses. The existing Regional Aid ceilings will decline significantly from January 2011, and they will be removed entirely from January 2014 onwards.

5. The Review Panel was not asked to bring forward recommendations to address the current downturn. 

6. The Review took account of recent research and evaluations of economic development policy in NI (e.g. the evaluations of Selective Financial Assistance, Accelerating Entrepreneurship; the Regional Innovation Strategy and the draft Regional Economic Strategy). It also took account of DETI and Invest NI’s Corporate Plans and Invest NI’s Performance Reports.

 7. As part of the review, the Panel sought views from as many stakeholders as possible to inform their report and subsequent recommendations. A call for evidence was launched on 30 January 2009 and closed on 27 February 2009. Details of submissions are available at www.irep.org.uk

8. Further details, including full Terms of Reference and biographies of Panel members are available at www.irep.org.uk

 

For further information, please contact:

David Young
Telephone: 028 90366074
Email: David Young