Summer recess has drawn to a close. Firms had been hoping for clear direction from the Executive after the break, so last we were pleased to hear that the long-awaited draft Programme for Government (PfG) has been agreed by the Assembly as we kick off the new term.
Over the coming weeks, firms will be scouring the document for economic growth initiatives and support for business - particularly when it comes to action on skills, infrastructure and green growth. Companies will also be eager to see how the Executive will prioritise that much needed public sector transformation.
The most recent GDP figures indicate that the UK economy has finally shaken off its slumber of the recent years. It’s likely that the quarterly data overstates the underlying momentum in the economy – but businesses do appear confident that the recovery will largely continue. At the same time, the price pressures that have been weighing heavily on households and businesses are softening.
Nonetheless there are roadblocks in the way of our desire to properly get the economy growing – roadblocks that act as a sobering foil to the careful optimism we’ve been seeing. Here at the CBI, we’ve been speaking to firms across Northern Ireland to hear directly from those on the ground and develop shared solutions to shared problems.
Businesses in Northern Ireland are facing real challenges that are blocking our path to sustainable growth. Firms are struggling to find the right skills in areas like engineering, accounting, finance and more. Equally, we’re seeing low investment levels, alongside escalating investment costs, as high interest rates have been weighing down growth plans even further.
Chief executives often warn that the future of our transition to a low carbon economy seems uncertain – with expected costs towering over ambition and a lack of co-ordinated policy suppressing investment appetite.
To demonstrate that Northern Ireland is moving forward, the Executive must support the new Programme for Government with a long-term sustainable funding model. There is no doubt that if we are to be ambitious around economic growth, investment, infrastructure development and public sector transformation; then private sector funds and partnerships will have an important role to play.
Businesses are looking for a clear vision for the Northern Ireland economy and confirmation that local politicians recognise the vital role that the business community makes. After all, it is business that creates jobs, drives innovation and creates the revenue for public sector spending and therein determines living standards.
As the Programme for Government consultation gets under way, firms are keen to see initiatives that will support long-term growth. For example, we know solving our skills puzzle will be a key ingredient in boosting our economic prospects for decades to come.
So, we must prioritise an adequate funding model for our higher education and further education sectors – providing opportunity and boosting social mobility and economic inclusivity. Action is also required when it comes to our infrastructure. If we want to boost economic growth, we have to follow through on the delivery of key infrastructure projects – that includes upgrading the roads network and essential investment in the water system.
While the CBI welcomes the establishment of the interim Regional Planning Commission, we must make sure that the recommendations of the Public Affairs Committee and the NI Audit Office are implemented in full. Firms have expressed serious concern about the time it takes for applications to be processed, and a lack of consistency across the 11 councils.
Businesses are looking for a planning system that is fit for purpose, with greater alignment and efficiency. This, alongside the publication of a Transport Strategy for Northern Ireland – allowing firms to make informed, strategic decisions about the vehicles they invest in – will ease the burden and uncertainty firms are currently facing.
While there are challenges, there are also economic prizes to be seized: like on green growth, an area that holds immense economic potential. For example, we know that green industry wages are nearly £10k higher when compared to the average UK wage. But we can only seize those opportunities if we act on the essential investment needed now.
Here in Northern Ireland, that includes investment in the electricity grid, socialising connection costs, and collaborating on an all-islands basis when it comes to energy and decarbonisation.
Proactive investment in our grid capacity is key to reducing the current network congestion businesses are struggling with – and for achieving Northern Ireland’s net zero ambitions.
In summary, despite an improving economic picture, firms still face real challenges to growth. But there are also plenty of opportunities up for grabs – unlocked by the right policy action. Let’s start this new political term as we mean to go on.
With the Executive back in situ, and a new Programme for Government out for consultation, there needs to be an ‘all hands-on-deck’ approach to get the economy moving.
The CBI’s members are eager to work with politicians to deliver the best economic results – in the interest of the business community and society as a whole.
- Angela McGowan is director of CBI Northern Ireland.
