Business chiefs exasperated as stalemate continues and fresh spending cuts to come
THE business community wholeheartedly agrees that restoration of the local Executive is the best way forward for Northern Ireland and will continue to support efforts to deliver that, regardless of the many bumps along the road.
That was among the key messages when a group of local CBI members gathered in the Europa Hotel to meet with Secretary of State Karen Bradley. And as one member pointed out, right now she is the only person who can shape Northern Ireland's economic fortunes, so for that reason local industry leaders are keen to engage with her.
The issues for the business community are well documented. Brexit has exposed more questions than answers in terms of market access, future access to workers at all levels (from the shop-floor to the board-room), tariffs and of course the border question. For decades companies have not faced such uncertainty and for this reason the foundations of our economic growth – skills, infrastructure, R&D and competitiveness need to be strengthened. Sadly however, that is currently far from the case.
Last month the devolved government in Wales set up a £50m fund to help their businesses prepare for Brexit. In Ireland too, a €300 million loan fund has been made available to give Irish businesses that are vulnerable to Brexit the support they need to remain competitive, innovate and look for new trade opportunities.
But in Northern Ireland the picture is very different for the business community. Support for enterprise, trade and investment is a devolved issue and therefore all funding is predicated on the health of the local budget and fiscal position.
The Department of Finance's briefing document on the NI Budget outlook for the next two years was published in December and made for grim reading. With local public funds under severe strain, proposed cuts include a 40 per cent reduction in the budget available for Invest NI to support new business. It is highly probable that no funding what-so-ever being will be made available to support local companies to adapt to any post-Brexit business environment that might emerge over the next two or three years.
This lack of support for business at a very uncertain time is clearly a worry. But CBI members told Mrs Bradley that the impact of other spending cuts in areas such as skills, education and infrastructure are even more disturbing as they are undermining the very foundations of our economic growth.
The business community relies heavily on the skills and talent of the local population, yet sustained cuts in funding for higher and further education in Northern Ireland have been on-going since 2011. This has left local universities and FE colleges at a severe disadvantage relative to their counterparts in Britain as student numbers and teaching staff in local colleges and universities are reduced, while simultaneously these institutions are now unable to attract the best of international staff due to Brexit.
Chief executives discussed the fact that while Northern Ireland continues to export a large proportion of our brightest and best young people, companies in all sectors are desperately seeking staff at all skill levels. Vacancy rates have risen and firms are highly anxious about further investment in Northern Ireland as they fail to see where the supply of labour will come from. It was noted that any further complications from Brexit regarding the introduction of a EU visa scheme or the imposition of labour thresholds will undoubtedly drive companies to locate elsewhere. Essentially, any attempt to impose a uniform approach to migration across the UK will do untold damage to this economy – particularly in rural areas where unemployment rates have fallen below two per cent.
The quality of local infrastructure also plays a key role in a company's competitive position. Without adequate investment in basic infrastructure and funding for adequate maintenance of our roads, railways, water and energy, Northern Ireland will be unable to function or indeed attract foreign companies to locate here.
A key worry for CEOs is the commitment to ring-fence an ever-expanding local health budget at the expense of everything else. With health costs expected to continue soaring and revenue raising measures largely absent, expenditure on enterprise, innovation and skills is now rapidly diminishing. This myopic approach will undoubtedly leave Northern at a severe disadvantage in the medium to longer term.
One chief executive noted that the Irish government has just announced a €116 billion investment in the country's National Development Plan (NDP). It sets out Ireland's strategic approach and commitment to public capital investment for the next 10 years. Key parts of the plan include expansion of third-level colleges, investment in transport and significant growth and connectivity for other cities and towns across the country. Essentially, the Republic of Ireland is planning and investing for the long-term while Northern Ireland is divesting.
CBI members also advised the Secretary of State that a step-change is now urgently needed if the north's economy is to avoid becoming even more dependent on HM Treasury hand-outs. We desperately need support for enterprise and innovation, significant investment in higher and further education, we need to address the skills gap through a regional migration policy and we need to invest in our towns, cities and our connectivity.
Companies in Northern Ireland are resilient. I believe the Secretary of State got a real sense of the business community's desire to play their part in building a better future. So much has been gained since the Good Friday Agreement 20 years ago and the establishment of the peace. Business just wants to be given a sound platform that allows them to get on with building prosperity, creating more jobs and providing opportunities for all citizens.
:: Angela McGowan is director of CBI Northern Ireland. Follow her at @angela_mcgowan