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REPORT ON STRATEGY 2010 INQUIRY

VOLUME 1 REPORT AND PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT

Ordered by The Committee for Enterprise, Trade and Investment to be printed 22 March 2001 Report: 2/00R (Committee for Enterprise, Trade and Investment)

COMMITTEE FOR ENTERPRISE, TRADE AND INVESTMENT: MEMBERSHIP AND POWERS

The Committee for Enterprise, Trade and Investment is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement and under Assembly Standing Order No 46. The Committee has a scrutiny, policy development and consultation role with respect to the Department of Enterprise, Trade and Investment and has a role in the initiation of legislation. The Committee has 11 members including a Chairperson and Deputy Chairperson and a quorum of 5. The Committee has power:

The membership of the Committee since its establishment on 29 November 1999 has been as follows:


Mr Pat Doherty (Chairperson)
Mr Sean Neeson (Deputy Chairperson)
Mr Alex Attwood
Mr David McClarty
Mr Jim Wells*
Dr Alasdair McDonnell
Mr Wilson Clyde
Ms Jane Morrice
Mr Duncan Shipley Dalton
Dr Dara O'Hagan
Mrs Annie Courtney*

*Mr Campbell was replaced by Mr Jim Wells on 3 October 2000.
*Ms Lewsley was replaced by Mrs Annie Courtney on 29 January 2001.

EXECUTIVE SUMMARY

INTRODUCTION

1. The Committee welcomes, in principle, the Strategy 2010 review. The Committee considers it necessary, first of all, to address the context within which Strategy 2010 was drawn up i.e. globalisation. We recognise that it is essential that Northern Ireland has economic development strategies and programmes in place which will enable it to compete in a rapidly changing and global economy. Globalisation has dramatically raised the level of economic performance of which countries are capable. In recent years, as the process of globalisation has gathered pace, spectacularly high, and sustained, rates of growth have become usual. Some rapidly developing countries have been able to sustain a growth rate of 6 - 7% per year over prolonged periods (S. Korea, Republic of Ireland).

2. Improvement in the quality and quantity of the capital stock of these countries - physical, infra-structural and human - that resulted from investments raised their productivity and took them, in the space of a few years, from industrial flab to industrial muscle. The key to this transformation, however, was the creation of the initial conditions that would attract international capital. This offered competitive advantage - typically in the form of skilled, competitive labour at stable labour costs - and encompassing financial incentives, sound economic, political and legal structures and peace. The challenge of globalisation for us, therefore, is that we as a society provide our people with well paid, highly skilled sustainable jobs.

3. There is a negative side to globalisation, as capital restlessly prowls the globe in search of the highest return, development has become much more of a "winner take all" contest: a few countries attract the fevered attention of international investors while large parts of the globe are ignored. A corollary of globalisation is that inequality between countries will increase. Another corollary is that inequality within countries will also increase, with the outsourcing of low-skilled manufacturing to developing countries. In the industrialised world, there is no longer much demand for the services of low skilled people with millions of such people thrown into unemployment (Western Europe) or taking wage reductions of a severity that has left them worse off than they were a quarter of a century ago (USA). Inequality is the Achilles' heel of globalisation. There are enormous tensions between those who have the skills, ability and resources to take advantage of globalisation and those who do not. The world is being knit together by technology, markets and telecommunications while inherently splitting apart socially and economically.

4. Global poverty is not always created by a lack of resources, wealth and technology but by the uneven distribution of resources between countries and within countries. While issues on a global scale - such as the need to regulate the flow of capital and commodities between countries, the need for greater democratisation and accountability of global financial institutions such as the World Bank, the International Monetary Fund, and the World Trade Organisation - are outside our influence, we can ensure that within our sphere of influence and responsibility that resources and wealth are evenly distributed. Because inequality undoubtedly goes hand in hand with globalisation, that does not mean that it is either acceptable or desirable. The onus is on government to ensure that poverty and inequality in our society are not increased by globalisation.

5. In the wake of these developments in the world economy, the broad question that domestic policy makers need to ask themselves is: what role should governments play in helping their economies to reap the benefits of globalisation? The broad answer is that the quality of government intervention is much more important than its quantity. The issue of quality, in turn, fragments into four parts -

COMMITTEE'S APPROACH

6. Against this background of globalisation, the Committee addressed the specific set of problems facing the Northern Ireland economy. The Committee reviewed the substantial volume of evidence presented to it in Section 3 and grouped the evidence under the four key themes identified above - public sector issues; partnership issues; capital formation issues; and analytical issues. The Committee addressed the difficulties and problems highlighted in the evidence presented to it in Section 5 and attempted to point the way ahead for the future. The recommendations were also grouped under the same four themes (capital formation was further subdivided between economic infrastructure and patterns of sectoral development). The Committee made a total of 2 general recommendations and 37 detailed recommendations.

7. In Section 2 the Committee analysed the minutes of the Strategy Steering Group (SSG) meetings that took place between April 1998 and March 1999. This evidence helped to set the context for the discussion and the many important recommendations that are made in this report.

8. In Section 4 the Committee reviewed the progress made on each of the 62 recommendations in the Strategy 2010 report. The Committee found that a number of the recommendations had only been partially implemented and a number still required action. The Committee concluded that there was a much greater need for transparency and clarity in the implementation and monitoring of the Strategy 2010 recommendations.

STRATEGY 2010 PROCESS

9. There were a number of criticisms made in the early debate on Strategy 2010 and during the course of the Committee's inquiry in relation to the Strategy 2010 process. These criticisms can be summarised as follows - there were simply too many unstructured and un-prioritised recommendations; there appeared to be little or no analysis of how, and the extent to which, implementation of the recommendations would be likely to lead to the achievement of the ten targets; there were missing targets that would have provided intermediate mechanisms through which convergence in standards of living might come about (e.g. productivity growth); there was confusion in the report between targets and policy instruments; there was no analysis of the efficacy of existing or past economic development policies, making it difficult to measure the likely impacts of new policies; and there was a lack of any economic modelling which would have enabled baseline forecasts to be prepared and alternative scenarios to be analysed.

10. Another important point that emerged from the evidence presented was in relation to consultation, or the lack of it. Many organisations made the point that no formal process of evaluation and review had been set up in Strategy 2010 along the lines of the DoE's "Shaping Our Future". A series of presentational events were held where information was conveyed to an audience. But there was a distinct lack of any structured process where constructive comments and criticisms could have been made and taken account of. This lack of proper consultation, in the Committee's view, led to confusion and misunderstanding about the status of the Strategy 2010 report itself. Was it a document for implementation or was it a first draft to be revised and modified in the light of debate? The Committee considers that the report of the SSG should have been prepared in a context where the initial draft strategy report was always clearly intended for subsequent open discussion by groups that were representative of all areas of society as well as for subsequent review by government departments with responsibility for implementation. It is the Committee's firm belief that in any major strategic initiative the policy maker should only proceed to implementation after the most exhaustive consultation has taken place.

GENERAL FINDINGS

11. While clearly mistakes were made in producing Strategy 2010 the Committee believes the process needs to be quickly moved forward to the implementation stage. The urgency of the economic challenges facing Northern Ireland simply does not allow further delays and procrastination. This view was strongly expressed by many of the organisations and individuals who gave evidence to the Committee's inquiry. It is essential that the most appropriate economic policies be adopted now and that, furthermore, such policies be widely understood, and generally accepted, by the people of Northern Ireland. The Committee agreed with many of the groups giving evidence that the Economic Development Forum should have a much broader representation. An expanded Economic Development Forum should be responsible for the implementation of Strategy 2010 and it should report on a regular basis to the Enterprise, Trade and Investment Committee. (General Recommendation 1).

12. The Committee considers that another key step is the establishment of a partnership structure within which policy formation in Northern Ireland can be embedded. The establishment of a truly inclusive partnership between the different groups in Northern Ireland is central to any successful growth process. There needs to be, among all sections of society, a sense of ownership of the process of economic growth and its outcomes in order to minimise the social friction which the process of economic growth inevitably generates. It is clear that when policies are not supported by a sense of shared ownership, they lead to the social exclusion of those whom they leave behind. (General Recommendation 2).

DETAILED FINDINGS

13. The Committee made a total of 37 detailed recommendations for implementation by the expanded Economic Development Forum. These recommendations are all listed in the next section. It should be made clear that these recommendations are not a substitute for the recommendations in the Strategy 2010 report. They are recommendations based, to a large extent, on the evidence presented to the Committee by the many organisations and individuals. The Committee also wish to make the point that a number of the recommendations relate to studies. The Committee is conscious of the need to avoid undue delay, however, it is essential, in certain areas, that more detailed studies are carried out before any conclusive findings can be made. The recommendations, in the Committee's view, will help Northern Ireland tackle the challenges and opportunities presented by increased globalisation. The recommendations have been grouped under the following key themes -

The Public Sector and Industrial Development Policy Instruments

14. The Committee considers it is essential to ensure that the direct instruments of policy are appropriate. The key elements in any development aid process are the fiscal environment, the availability of financial assistance (the amount and form it takes), the operation of industrial promotion (the agency structure and mandate) and the evaluation of the system.

Fiscal Environment

15. There was much debate on the recommendation that Northern Ireland should have a special rate of corporation tax in order to compete with the Republic of Ireland and on whether the recommendation was feasible or not. The Committee believes that, at this stage of the devolution process, it is essential that Northern Ireland establish the extent to which it has control over fiscal policy and how that control may be used to create new and essential financial incentives. A detailed study should be carried out by independent experts on the advantages and disadvantages of having greater fiscal flexibility within the regions of the United Kingdom, with particular focus on the special needs of Northern Ireland.

16. The Committee was concerned about the number of issues which were outside the control of the Assembly but which were having a serious impact on business and the economy in Northern Ireland, such as the lower rate of corporation tax in the Republic of Ireland, the higher road fuel duty in Northern Ireland, the proposed aggregates tax (due in April 2002), and the currency differentials with the Republic of Ireland. The Committee believes that a much fairer system of determining Northern Ireland's block grant is needed to help alleviate the impact for the economy of certain fiscal disadvantages. The Committee concluded that the Barnett formula, which determines Northern Ireland's block grant from the Treasury, should be reviewed.

17. The Committee made other recommendations on how fiscal measures could improve business growth, including a tax exemption for the creative industries sector; changes to the role of banks; and a study on the impact on businesses in Northern Ireland of the Single European Currency in the Republic of Ireland.

Financial Assistance

18. Many organisations giving evidence acknowledged that the existing system of industrial grants in Northern Ireland (Selective Financial Assistance (SFA)) was inefficient and had some undesirable side effects. Many felt there should be a move away from SFA towards softer forms of assistance and loan guarantees. The Committee concluded that a review should be carried out by independent experts of the existing system of grant assistance and the conclusions of this review should be used to make specific policy proposals for the reform of the present system. The Committee was impressed with the system in the US, operated by the Small Business Administration, where loans guaranteed by Government were used to help small business and encourage more women into business.

19. The Committee recognises the enormous opportunities for industry through the "Green Industrial Revolution". The Committee believes that more focussed R&D strategies are needed to support the development of new technology industries designed to enhance environmental protection and reduce global warming. The Committee also feels that incentives should be introduced to encourage greater movement towards clean, green, production methods, including increased use of alternative and renewable energy.

Industrial Promotion

20. Many groups commented on whether or not there should be a single development agency incorporating IDB, LEDU and IRTU. The Committee was most persuaded by those who favoured a single agency. The Committee believes the new agency should be an arms length agency modelled on LEDU rather than an agency located fully inside government. This will provide the new agency with greater freedom, flexibility, speedier decision making and a much more business like culture. The new agency should be fully accountable to the Minister and the Assembly. (See appendix 1 of this report).

Partnership and Cohesion

21. The Committee believes that partnership is very important particularly with regard to its significance in minimising any sense of exclusion that the process of growth would inevitably generate among those whom it did not touch, or touched only lightly. Social exclusion has three important aspects: poverty, or exclusion from income; long-term unemployment or exclusion from the labour market; and exclusion from essential services. In pursuing any economic development strategy the Department must adhere to PAFT and TSN obligations, and equality must be placed at the centre of such a strategy.

22. The evidence presented to the Committee highlighted that long-term unemployment was still a major problem and that little impact had been made in this area. The Committee believes that detailed studies are required on issues of poverty and on why rates of long-term unemployment are substantially higher in Northern Ireland than in Great Britain. The Committee was also particularly concerned about the exclusion of women and vulnerable groups from the labour market and believes measures need to be taken to address these matters. Greater support is needed for the rapidly developing social economy sector and the important social role this sector has to play in local communities.

23. The Committee believes that businesses should play a more active role in local communities, which would have benefits not only for local communities but also for the businesses themselves. Incentives are needed to encourage greater social responsibility in business and industry with regard to its employment practices, its contribution to the local community and the environment and its approach to trade with newly industrialised and developing countries.

24. Partnership issues also arose in connection with Northern Ireland's external relationships. It is important that economic and social links are forged both across the two parts of the island of Ireland, and throughout the British Isles and Europe, as well as internationally. There is a need, in the Committee's view, to examine the whole range of issues that arise for Northern Ireland as a result of its proximity to, and economic interaction with, the Republic of Ireland. There is also a need to promote stronger links with Europe through the new Brussels office, with particular focus on accessing the emerging markets of Eastern and Central Europe.

Capital Formation: the economic infrastructure

25. Raising the rate of productivity growth in Northern Ireland, with a view to narrowing the differential in productivity with the EU, lies at the heart of efforts to secure for Northern Ireland a better standard of living. In turn, improvements in the "economic infrastructure" of Northern Ireland are central to boosting its productivity growth rate. The concept of economic infrastructure encompasses three elements - the broad physical infrastructure of Northern Ireland; the physical capital available to its industry; and the human capital embodied in the skills and educational levels of its labour force.

26. A number of groups giving evidence raised the problem of serious deficiencies in the physical infrastructure in Northern Ireland. The Committee considers that a massive injection of funding over the next 10 years is needed to develop a world class transport infrastructure within all regions of Northern Ireland to bring it into line with the needs of a modern world class economy. The Committee also believes that a strategic approach should be adopted to transport policy on the island of Ireland and within these islands.

27. There was considerable evidence, from educational bodies and others, on skill and educational requirements and its importance to the economy. The Committee agrees with the evidence from witnesses that there was a need for greater linkages between the Further Education sector and industry, particularly in relation to preparing students for the knowledge-based economy. In addition, greater support is needed, in the Committee's view, for in-company training. The Committee also believes that at secondary level more needs to be done to improve the employability of students, particularly through career guidance, a greater recognition for vocational studies and greater use of work placement in industry. The Committee notes that these issues are within the remit of the Department of Higher and Further Education, Training and Employment.

28. Concerns were raised in the evidence about the development of new technology ideas, and the difficulty in developing such ideas to the point where the product is ready for the market place. Ways of speeding up the process of commercialisation of new technology concepts need to be urgently addressed, particularly in the e-commerce and bio-technology fields.

Capital Formation: patterns of sectoral development

29. The main challenge facing the Northern Ireland economy is the need for a fundamental restructuring of its industrial base. The economy is currently much too dependent on industries which produce low quality, low technology goods, which have relatively low levels of productivity, and low wage levels. The poor performance of industry has been, and continues to be, masked by the high level of public subsidy and assistance it receives.

30. If we are to compete more effectively in global markets and exploit the substantial benefits that could flow from closer integration with the Republic of Ireland economy in particular, then the economic base has to fundamentally change. This is a huge challenge. Foreign investment has an important role to play in this economic reconstruction, but more important is the need to build strong, dynamic and competitive indigenous industries. The Committee considers it is important that studies are carried out on how the Northern Ireland economy can be transformed to an economy which is based on high-tech, high value goods, and to one which is based on production and innovation in the context of a peaceful environment.

31. Policy should not unduly concentrate on manufacturing. Among consumer services, growth in tourism is one of the real successes of globalisation - and the economy of Northern Ireland in particular has a major opportunity to exploit an almost untapped tourist industry if it can generate a suitable commercial environment. The Committee believes that the new strategic development plan for the tourism sector should address key issues in the sector such as hospitality training, marketing, and recruitment challenges, with a view to its developing on a par with the tourist industry in the Republic of Ireland and Scotland. The Committee agrees with the concerns expressed by witnesses about the possible effects on standards if the bed and breakfast sector is deregulated. High quality accommodation is vital if the potential for growth in the tourism sector is to be realised.

The Information Infrastructure

32. We cannot start to re-build the economy without a plan. If Northern Ireland is to develop into a serious participant in the global economy it must, in addition to putting in place appropriate economic policies, adopt plans to ensure it has the necessary information system in place to manage itself rigorously as an economy. A dearth of information may require an excess of research or investigation in the short-term until adequate benchmarks and baselines are established. But it is essential for the Northern Ireland economy, that the type of information infrastructure one would expect to find in a modern economy is quickly developed.

33. Such an information system includes the preparation of databases for Northern Ireland which will allow comparisons with other countries and with regions within Europe. These databases will also enable economists within the public sector to generate short-term forecasts and to develop medium-term models which can be used to examine the effects of different policy scenarios. It is also important that frameworks of analysis are developed which match the special features of the economy. Finally, the Committee fully supports NIEC's independent role in carrying out research and believes that its role should be increased; this increased role should include the preparation of detailed forecasts for the Northern Ireland economy.

RECOMMENDATIONS

GENERAL RECOMMENDATIONS

General Recommendation 1 - An Expanded Economic Development Forum

An expanded Economic Development Forum should be responsible for the implementation of Strategy 2010 (stage 5 (see Section 5 of report)) and should report on a regular basis to the Enterprise, Trade and Investment Committee. Representation on the Forum should be more broadly based than at present. It should include representatives from all relevant government departments, District Councils, the Higher and Further education sector, and an enhanced representation from the community and voluntary sector. Its role should be to advise on how Strategy 2010 should be revised, prioritised, made consistent with other policies and strategies, and implemented effectively in the context of globalisation, the evolving island economy and the demands of the Good Friday Agreement.

General Recommendation 2 - Partnership Issues

The Committee recommends that the making of economic policy in Northern Ireland should extend well beyond the confines of industrial development to embrace issues of economic development, sustainable growth, and social cohesion. Economic policy should be grounded in a sense of partnership between the stakeholders in society because when policies are not buttressed by a sense of shared ownership in them, they lead to the social exclusion of those whom they leave behind.

The Committee recommends that issues of partnership should encompass four aspects -

Finally, the principle of partnership needs to be extended so that it is fully inclusive, including representatives of the community and voluntary sectors. Effective social inclusion with teeth needs to be at the heart of policy formulation and implementation.

DETAILED RECOMMENDATIONS

The Public Sector and Industrial Development Policy Instruments

Recommendation 1 - Fiscal Flexibility

The Committee recommends, as part of the Implementation phase of the Strategy 2010 process, that a detailed study be carried out by independent experts on the advantages and disadvantages, costs and benefits, of having greater fiscal flexibility within the regions of the United Kingdom, with particular focus on the special needs of Northern Ireland (and making comparisons with Scotland and Wales) in the context of what is possible under devolution. (See Paragraph 3.12 of this report).

Recommendation 2 - The Barnett Formula

The Committee recommends that the Barnett Formula, which determines Northern Ireland's block grants from the treasury, should be reviewed. Lord Barnett stated that the formula was only introduced as a short-term measure in the late 1970's and that a new way of allocating public resources should be found based on a more objective measure of relative need. This would help Northern Ireland alleviate the problems that arise from having a land border with another European country. The Committee recommends that a joint delegation of members from the Enterprise, Trade and Investment and Finance and Personnel Committees should meet the Chancellor of the Exchequer. This meeting should be held to discuss progressive alternatives to the Barnett Formula and the implications of the problems raised.

Recommendation 3 - Tax Rules

The Committee recommends that the tax rules should be explored with a view to creating further tax relief incentives for re-investment.

Recommendation 4 - Banks

The Committee recommends that banks in Northern Ireland should take a proactive approach towards encouraging local enterprise and provide a clear, open and transparent charging structure and reasonable rates of interest.

Recommendation 5 - Single European Currency

The Committee recommends a detailed study of the impact on Northern Ireland business of the arrival of the Single European Currency in the Republic of Ireland, including recommendations to help local traders overcome any detrimental effects arising from their proximity to, and location outside, the Euro-zone.

Recommendation 6 - Tax Exemption for the Creative Industries

The Committee recognises the enormous potential of the creative industries to the new knowledge-based economy. The Committee recommends a tax exemption for artists, craftspeople and the creative industries in Northern Ireland as a means of fostering the economic, social and cultural benefits of these activities.

Recommendation 7 - Selective Financial Assistance

The Committee recommends that all areas of Strategy 2010, where reference is made to reform of grant assistance to industry (SFA), be examined by independent experts who should draw on the wide range of existing research within Northern Ireland and further afield. The conclusions of the expert review should be used to make specific policy proposals for the reform of the present system.

Recommendation 8 - Loan Guarantees

The Committee recommends that small businesses should be assisted, where appropriate, by loans guaranteed by Government similar to the scheme operated by the Small Business Administration in the US.

Recommendation 9 - Innovation, Design, Marketing and Export

The Committee recommends support for innovation, design, marketing and export in all areas of production as a means of adding value to local industry.

Recommendation 10 - Clean, Green Production

The Committee recommends that measures are taken to encourage greater movement towards clean, green production methods, including increased use of alternative and renewable energy, energy efficiency, the polluter pays policy for industrial development, and incentives for waste management and recycling.

Recommendation 11 - Environmental Protection

The Committee recommends focussed R&D strategies to support the development of new technology industries designed to enhance environmental protection and reduce global warming.

Recommendation 12 - Single Development Agency

The Committee recommends the establishment of a single development agency which should incorporate IDB, LEDU and IRTU. It should be an arms length agency modelled on LEDU rather than an agency located fully inside government, but with full accountability to the Minister and the Assembly (see appendix 1 of this report).

Recommendation 13 - Regional Disparities

The Committee recommends that the Economic Development Forum needs to address the regional disparities within the Northern Ireland economy and promote distinctive measures to redress the geographical imbalances.

Recommendation 14 - Targets

The Committee recommends that targets be set in a number of areas including public sector investment in R&D, tourism, productivity and the achievement of equality.

Partnership and Cohesion

Recommendation 15 - Poverty

The Committee recommends that there should be a detailed study on issues of poverty in Northern Ireland both on the basis of low income and on the basis of deprivation of necessities, taking account of New TSN and Promoting Social Inclusion policies. The success of all government departments in tackling deprivation should be monitored.

Recommendation 16 - Long-term Unemployment

The Committee recommends that there should be a study on why rates of long-term unemployment in Northern Ireland are substantially higher than those in Britain, with particular emphasis on -

The Committee would urge the Department to consider the FIT (Fastrack to IT) scheme which has been introduced in the Republic of Ireland.

Recommendation 17 - Vulnerable Groups

The Committee recommends increased aid for specialised training packages to give minority groups, such as the disabled and ethnic minorities, and vulnerable groups, such as the long-term unemployed and marginalised youth, greater access to job skills and employment.

Recommendation 18 - Women in the Workplace

The Committee recommends an increased focus on the recruitment and promotion of women in the workplace, including targeted training for women, workplace creche facilities, increased access to job share and greater use of family friendly and flexible working hours.

Recommendation 19 - Economic interaction with the Republic of Ireland

The Committee recommends that an expert group be appointed to examine the whole range of issues that arise for Northern Ireland as a result of its proximity to, as well as its economic interaction with, the Republic of Ireland. The Committee recommends that the relevant policy implications arising from this research be incorporated into Strategy 2010 and that the role of InterTradeIreland be acknowledged.

Recommendation 20 - Stronger links with Europe

The Committee recommends promoting stronger links with continental Europe, through the new Brussels office, with particular focus on accessing the emerging markets of Eastern and Central Europe in preparation for EU enlargement.

Recommendation 21 - Studies on the Social Economy

The Committee recommends that detailed studies be carried out on -

Recommendation 22 - Support for the Social Economy and Local Economic Development

The Committee recommends greater support for the social economy as a tool for promoting social inclusion, through local capacity building, community education and the not-for-profit business sector. The Committee also recommends greater focus on the importance of support structures for maximising the potential of local economic development and the skills and expertise which exist therein.

Recommendation 23 - Social Responsibility

The Committee recommends incentives to encourage greater social responsibility in business and industry with regard to its employment practices, its contribution to the local community and the environment and its approach to trade with newly industrialised and developing countries.

Capital Formation Issues: the economic infrastructure

Recommendation 24 - Transport Infrastructure

The Committee recommends a massive injection of funding over the next 10 years to develop a world class transport infrastructure within all regions of Northern Ireland to bring it into line with the needs of a modern world class economy, taking into account the legal equality duties and policies.

Recommendation 25 - Strategic Approach to Transport Policy

The Committee recommends a strategic approach to transport policy on the island of Ireland and within these islands with regular meetings of the regional/national transport Ministers of the relevant authorities to provide for increased co-operation.

Recommendation 26 - Education

The Committee recommends a system of education which increases the potential of all children, reduces the failure culture, improves access to employment through career guidance, enhances links with business and industry, gives more recognition for vocational studies and makes greater use of work placement in industry.

Recommendation 27 - Further Education and Training

The Committee recommends much greater links between the Further Education sector and industry, particularly with a view to preparing students for new skills to accommodate the knowledge based economy; and increased support for in-house training at all levels as well as re-skilling courses, particularly for those sectors such as textiles which are particularly vulnerable to change.

Recommendation 28 - Commercialisation of New Technologies

The Committee recommends that the Department urgently ascertain how to significantly improve the rapid commercialisation of new technology concepts, particularly those in the e-commerce and bio-technology (life/health sciences) fields.

Capital Formation Issues: patterns of sectoral development

Recommendation 29 - Small and Medium Sized Businesses

The Committee recommends that a highly selective policy be adopted by the new industrial development agency to foster the development of small and medium-sized enterprises in the manufacturing sector; such a policy should operate with the intention of cultivating an entrepreneurial culture within society, and should focus on those businesses which can engage from an early stage in global sub-supply, using e-commerce to maximum advantage.

Recommendation 30 - Local Service Sector

The Committee recommends that the role of the local service sector in assisting companies in the manufacturing sector to achieve international competitiveness should be addressed formally. Anti-competitive practices should be investigated where these raise costs unduly and the potential for internationalising local services should be considered, with companies expanding outside Northern Ireland being possibly considered eligible for financial support.

Recommendation 31 - Tourism Sector - Strategic Development Plan

The Committee recommends that the new strategic development plan for the tourism sector should address key issues in the sector such as hospitality training, marketing, and recruitment challenges, with a view to its developing on a par with the tourist industry in the Republic of Ireland and Scotland.

Recommendation 32 - Tourism Sector - Market Focused Approach

The Committee recommends that the tourism sector should be encouraged and supported with grants and financial incentives in developing a market focused approach. This approach should centre on the establishment of a brand image for Northern Ireland and should encourage demand for shoulder and off-peak seasons.

Recommendation 33 - Bed and Breakfast Sector

The Committee considers that issues of quality and standards are vital and accordingly recommends that the bed and breakfast sector should not be deregulated.

Recommendation 34 - Studies on how the Economy can be Transformed

The Committee recommends that studies should be carried out on -

The Information Infrastructure

Recommendation 35 - Data Sources

The Committee acknowledges the existing review being carried out by NISRA and recommends that - all economic data currently collected on Northern Ireland should be published locally within Northern Ireland by a single local agency in addition to later (or simultaneous) publication in the United Kingdom by the Office for National Statistics (ONS). Where data "gaps" are identified, steps should be taken to collect and publish new data series. Where sample size (e.g. Labour Force Survey) requires a larger sample than currently undertaken, plans should be put in place to prepare to make this additional investment in data collections, so that the full impact of policies can be monitored.

Recommendation 36 - Research Agenda

The Committee recommends that a research agenda for Northern Ireland should include the investigation and testing of how existing frameworks of development might apply to the economy, so that appropriate concepts of development will be used in partnership and policy discussions.

Recommendation 37 - Independent Research Group

The Committee recognises the important contribution NIEC has made over the years and fully supports its independence in carrying out research. Accordingly, the Committee recommends increasing the role of NIEC and its task should include the regular preparation of detailed and authoritative quarterly forecasts for the Northern Ireland economy as well as the preparation of medium-term (5-year) forecasts every two years. The Committee believes this to be essential if the best possible independent guidance is to be provided to policy makers in the public and private sectors.

SECTION 1: BACKGROUND

1.1. In January 2000 the Northern Ireland Assembly Committee for Enterprise, Trade and Investment announced that the subject of its first major inquiry would be Strategy 2010.

1.2. Strategy 2010 - a review of Northern Ireland's economic development strategy for the next 10 years - was published by the then Department of Economic Development (DED) in March 1999. There were a total of 10 targets and 62 recommendations listed in the Strategy 2010 report.

1.3. After publication of the Strategy 2010 report a number of commentators were highly critical of Strategy 2010. A major point of contention that arose out of the post publication debate was whether Strategy 2010 should be regarded as a document for implementation or whether it should be viewed as a consultative document to be revised and modified in the light of the unfolding debate and discussion. This basic misunderstanding appears to have arisen because the internal process of consultation by DED and the Strategy Steering Group (SSG), carried out while preparing the report, was believed to be an acceptable substitute for unrestricted, open public debate and revision.

1.4. Notwithstanding this confusion, given the importance of Strategy 2010 for economic policy in Northern Ireland, it is significant that the Northern Ireland Economic Council (NIEC), which has extensive experience of policy evaluation, should have concluded -

"In sum it appears, based on the discussion, analysis and recommendations in Strategy 2010, that due to the lack of clear qualitative and quantitative links, lines of causation and channels of impact, the targets of the desired scenario are unlikely to be reached by 2010".

1.5. It was in the light of these criticisms that the Committee decided Strategy 2010 should be the subject of its first major inquiry. The Terms of Reference for the inquiry were as follows -

1.6. A total of 58 organisations and individuals made written submissions to the Committee. Submissions were made by a wide range of organisations and individuals including the Department, other public sector bodies, business associations, trade unions, government executive agencies, District Councils, educational bodies, consumer groups and community groups. The deadline for the written submissions was initially 23 February 2000. However, the inquiry was suspended on 11 February because of the suspension of the Assembly. The deadline for written submissions was extended to 21 June following restoration of the Assembly on 30 May.

1.7. Given the criticisms about the lack of consultation in the Strategy 2010 review, the Committee was keen to ensure that as many organisations and individuals as possible were given the opportunity to present oral evidence. The Committee heard oral evidence from a total of 45 organisations and individuals. The oral evidence sessions commenced on 14 June 2000 and were completed on 18 October 2000.

1.8. In addition, the Committee was anxious to be as accessible as possible and consequently three of the public evidence sessions were held outside Parliament Buildings - at Queen's University, at Moyle District Council and at Strabane District Council, with evidence being heard from a total of 8 organisations at the three sessions. The meeting at Queen's University was the first Committee meeting held outside Parliament Buildings. The Committee is grateful to the hosts for their hospitality at these meetings.

1.9. The transcripts of all the oral evidence sessions are included in Volumes 2 and 3 of the report under Minutes of Evidence. The written submissions made by those organisations and individuals who gave oral evidence are included in Volumes 4 and 5 of the report as Annexes to the Minutes of Evidence. Because of the number of written submissions made it was not possible to publish all the submissions in this report. Copies of all the written submissions are available to the public for inspection by prior arrangement with the Committee Clerk.

1.10. This was a lengthy inquiry and the Committee is most grateful to the many individuals and organisations who gave evidence both in writing and orally.

SECTION 2: THE STRATEGY 2010 PROCESS

INTRODUCTION

2.1. The minutes of the Strategy Steering Group (SSG) meetings that took place between April 1998 and March 1999 were an important part of the evidence submitted to the Committee. In this section the Committee has provided an analysis of this evidence to help set the context for the later discussion and the many important recommendations made in the report.

2.2. The Strategy 2010 process was set in motion immediately prior to the signing of the Good Friday Agreement and its remit was written into the Agreement as requiring -

"a new economic development strategy for Northern Ireland, for consideration in due course by the Assembly, which would provide for short and medium-term economic planning linked as appropriate to the regional development strategy".

CONSULTATION

2.3. The first meeting of the SSG took place on 30 April 1998. The minutes of the first meeting noted that -

"it had been a deliberate choice not to try to have a representative group";

2.4. Although the actual criteria used for selection of the members of the SSG are not described in the minutes, the Committee feel that a small group like the SSG was appropriate for the task of drawing up a new strategy. However, the Committee considers that the report of the SSG should have been prepared in a context where that initial draft strategy report was always clearly intended for subsequent open discussion by groups that were representative of all areas of society as well as for subsequent review by government departments with responsibility for implementation.

2.5. Almost inevitably, a major difficulty arose in the debate that followed the eventual publication of Strategy 2010 a year later, between those who held the view that the discussion should focus mainly on "implementation" issues (a viewpoint supported albeit ambivalently by the SSG and DED), and the views of those like the Northern Ireland Economic Council (NIEC) who believed that Strategy 2010 was a first draft, to be put out for consultation, that was intended for revision and modification in the light of the debate. This misunderstanding appears to have arisen because the internal process of consultation by DED and the SSG, while the report was being drawn up, was believed to be an acceptable substitute for unrestricted, open public debate and revision. However, as the Committee shows below, consultation even within the Strategy 2010 process itself was not free of tensions, so it is perhaps not surprising that the public debate was characterised by similar tensions and misunderstandings.

2.6. From the beginning, it was recognised that there might be an issue about the legitimacy of the SSG. The minutes record that -

"while the Assembly would undoubtedly come to the civil servants for advice, it would in fact challenge the SSG - its role, its composition, its very existence".

2.7. From its inception, it was also recognised that the review was to deal with -

"economic development" matters, and not restrict itself to "industrial development".

SINGLE DEVELOPMENT AGENCY

2.8. At the first meeting, Professor McKie's report on the restructuring of the DED family of agencies was presented to the SSG, it having been commissioned prior to the Strategy 2010 process. The Committee did not find it possible from the SSG minutes to establish how the final recommendation for a single development agency was arrived at, nor to understand if alternative proposals had been examined, costed and ranked.

MODELS

2.9. As subsequent meetings were held, there were a series of major decisions that influenced the evolution of the Strategy 2010 report. From an economic point of view, one of the most important issues concerned the use of a regional economic model of Northern Ireland in order to be in a position to prepare baseline forecasts and analyse alternative scenarios. This was first mentioned at the second SSG meeting on 14 May 1998, and the issue returned for consideration at almost all subsequent meetings.

2.10. The existing UK regional models were reviewed by the Strategy Review Unit (SRU) of DED at the SSG meeting of 10 June 1998 and all appear to have been found wanting. However, it appears that the SRU may not have fully understood quite how important it was to have a comprehensive understanding of the functioning of the Northern Ireland economy, drawing on appropriate professional advice as well as economic models and other analytical tools and frameworks. So, the SSG appears to have embarked on a major review of economic strategy without having tools of analysis adequate for the job. The Committee believes that many of the subsequent critiques of Strategy 2010, particularly the analysis published by the NIEC in its Occasional Paper 12 (A Step-Change in Economic Performance? A Response to Strategy 2010) might have been unnecessary and avoidable if the proper professional advice, as well as the appropriate analytical and statistical tools, had been available from the early and formative stages of the review process.

NI GROWTH CHALLENGE

2.11. The next development in the Strategy 2010 process that influenced the eventual outcome was the insertion of the Northern Ireland Growth Challenge (NIGC) into the centre of the SSG's deliberations. It is difficult to evaluate the actual extent of the contribution of the NIGC since so little of its activities are properly documented in the public domain. Consequently, it is also difficult to establish the quantity and quality of the research and expertise that the NIGC may have brought to bear on the strategy process. The Committee considers it might have been better if DED had drawn up and issued formal calls for tender for any substantial research or consultancy activities that were to be associated with the review. Based on examination of the minutes of the SSG meetings, this does not appear to have been done, in contrast with common practice in the European Commission and in many other countries of the EU.

INTER-DEPARTMENTAL RELATIONS

2.12. Another aspect of the Strategy 2010 process was the fact that crucial inter-Departmental aspects appear to have been handled internally within DED, or on an ad-hoc basis. For example, at the 10 June 1998 SSG meeting, it was recorded that the Permanent Secretary of DoE presented material on his Department's evolving regional plan, but the fact that economic and physical/regional planning were inseparably related appears not to have been appreciated. After the publication of Strategy 2010, the subsequent debates drew attention to incompatibilities between it and "Shaping Our Future". This was unfortunate and, in the Committee's opinion, could easily have been avoided.

SELECTIVE FINANCIAL ASSISTANCE (SFA)

2.13. When it came to the analysis of the role of grants (SFA), it would appear that the SSG relied on work prepared within DED (SSG minutes, 9 July 1998). It is not clear if the Department's advice drew on the extensive range of research studies in this area, and this may have contributed to the uncertainty and ambivalence with which the matter was treated in the published Strategy 2010 report.

CORPORATION TAX

2.14. The issue of "fiscal flexibility" in Northern Ireland was first discussed at the SSG meeting held on 12 November 1998. A summary of the SSG discussion was minuted by the Chairman, who stated inter alia that -

"there was little prospect of a unique corporation tax rate for Northern Ireland, but this was not to say that there were no prospects for a UK rate change".

2.15. This would appear to be inconsistent with the strong recommendation on corporation tax (i.e. creating a special rate of corporation tax in Northern Ireland for new inward investments over a period of 5 years) that subsequently surfaced in Strategy 2010 (paragraph 9.11.3). In addition, the recommendation on corporation tax was made in the report without placing it in a context where the advantages over, as well as complementarity with, the existing SFA system of grants was explored, and without addressing the serious political consequences within the United Kingdom. One outcome of this decision was to deflect discussion of future strategy away from feasible and likely scenarios into the realms of futile policy speculation. At the SSG meeting of 10 February 1999, it was further noted that -

"Following discussion on the prospects of tax raising powers being devolved to the new Assembly, it was agreed that the recommendations in this area should be strengthened albeit with the realisation that they may not ultimately be deliverable".

2.16. Indeed, a crucial aspect of the corporation tax recommendation (a five year limit) was only inserted at the last moment before publication (SSG minutes, 19 March 1999). In the Committee's view this approach to tax policy only served to generate considerable confusion and probably seriously damaged the credibility of Strategy 2010 as a workable policy programme capable of full implementation.

SOCIAL PARTNERSHIP

2.17. Strategy 2010 contained a recommendation with respect to Social Partnership. This had two elements: first, the creation of an Economic Development Forum (EDF) with a wide-ranging role; and second, the transformation of the existing NIEC into a "high-powered, high quality, research body". This recommendation appears to have been based on a paper discussed at the SSG meeting of 25 November 1998. However, the paper itself made no such proposal, and it is impossible from the SSG minutes to trace the origin of the eventual strong recommendation that appeared as paragraphs 9.4.1 and 9.4.2 in Strategy 2010. The role of the present NIEC in providing high quality - if sometimes rather critical - evaluations and studies of public policy in Northern Ireland is well known. At present the NIEC has a membership that - with the exception of government participation - represents a social partnership akin to the NESC in the Republic of Ireland. The Committee believes that, in the light of these facts, a proposal to change fundamentally the role of the NIEC should only have been made in the context of clear and persuasive justification of the benefits that would accrue to the policy-making community and to society at large.

PUBLIC SECTOR

2.18. For any economic analyst looking at the driving forces of the Northern economy, the role and size of the public sector, as well as the extent of public sector financial subvention of private sector activities, would rank as very important. It is somewhat surprising, therefore, that the SSG minutes of 2/3 December 1998 record a decision taken that -

"the report should flag the size of the public sector but should not attempt to review its role".

Since such a review would, necessarily, have included examination of the performance of the DED family of agencies at the centre of policy delivery (such as the IDB, LEDU and IRTU), and could easily have drawn on extensive existing research findings, the final report, in the Committee's view, suffered a serious loss of credibility as a result of this decision.

SECTOR WORKING GROUPS

2.19. A crucial element in the Strategy 2010 process was that the SSG would also be able to draw on the inputs from a series of sectoral and other Working Groups, but that -

"this consultation should be directly driven by the Department (DED) with autonomous facilitation by other suitable bodies, such as sectoral groups".

The selection of participants in these Working Groups was from a short-list of names drawn up by the SRU of DED after approval by a sub-group of the SSG (minutes, 14 May 1998).

2.20. With respect to the liaison between the SSG and the Sectoral and Cross-Sectoral Working Groups, the SSG minutes of 10 February 1999 (i.e. one month before the launch of Strategy 2010) record that the Chairman (of the SSG) reported -

"that there had been discontent at the consultation meetings particularly among Working Group Chairmen who felt they should be consulted on the content of the draft report. They were concerned that their work would not adequately be reflected in the draft document".

2.21. It apparently had been intended to have summary material on the output of the Working Groups in an appendix, but a decision was made at the same meeting to include -

"sectoral issues . in a new chapter within the main body of the report and not as an appendix".

2.22. At the last SSG meeting (19 March 1999), there was a discussion with the Chairmen of the Working Groups at which another series of serious points were raised with respect to the manner in which the material from the Working Groups had been treated in the (now finalised) report. For example -

The response of the SSG Chairman to the first point was a proposal to -

"ask Mr Ingram to refer, in the Grand Committee debate, to the probable reaction of local industry to the proposal to restrict the lower Corporate Tax rate to new inward investment".

2.23. The Committee considers that the poor integration of the Sector Working Group reports into the main report was a mistake and meant that the debate on sectoral restructuring issues was less productive than might otherwise have been the case.

SECTOR WORKING GROUP PAPERS

2.24. The issue of the publication of the important Working Group papers was discussed at the 2/3 December 1998 meeting, and it was decided, at the suggestion of the Chairman, that -

"the working groups might have their reports published at some stage and it was agreed that this would have to be brokered through the individual Chairmen".

In the event, the Working Group papers were not placed in the public domain until late 1999, some eight months after the publication of Strategy 2010, and then only made accessible through the Strategy 2010 web-site in un-revised format. The Committee considers that the failure to publish the Working Group reports in a timely and appropriate manner was a mistake, and the credibility of the Strategy 2010 report suffered as a consequence.

HASTE OVER FINAL PUBLICATION OF REPORT

2.25. The minutes of the final two SSG meetings (of 10 March and 19 March 1999) provide evidence of considerable haste and some confusion as the publication deadline approached. The final report was scheduled for delivery to the members of the Northern Ireland Grand Committee on 22 March and issues raised at what was the second last meeting of the SSG included such major points as -

2.26. Finally, the actual date of publication appears to have been driven by the need to submit the report to the Northern Ireland Grand Committee meeting on 25 March for discussion and examination. There may have been cogent reasons for this haste, but they were not described in the SSG minutes. The couple of days that elapsed between the members of the Grand Committee receiving the report and the debate itself on 25 March is unlikely to have permitted the MPs much opportunity for detailed study. Indeed, the Rev Martin Smyth, MP, who led off the debate on Strategy 2010, commented -

"We could have had a better debate if we had received the review earlier. Despite speed reading, it has not been possible, given all the other demands on our time, to do it justice".

SECTION 3: REVIEW OF THE EVIDENCE

INTRODUCTION

3.1. The Committee's review has two elements -

THE EARLY DEBATE ON STRATEGY 2010

3.2. A number of critiques on Strategy 2010 were published by economists prior to the setting up of the Committee's inquiry. The main points emanating from these critiques can usefully be summarised as follows -

3.3. There were also other criticisms made, such as the narrow representation on the Strategy Steering Group (SSG) and the lack of any economic modelling in Strategy 2010. The Committee has already addressed these points in Section 2 of this report.

REVIEW OF EVIDENCE PRESENTED TO THE COMMITTEE

3.4. Many of the points made above were borne out during the course of the Committee's inquiry, most notably the points made about the lack of any analysis of past or current economic development policies, the missing targets, and the lack of any linkages between the targets and the recommendations. Specifically, the Committee considers that there was no assessment attempted of the past performance of the IDB, which has been found to have been flawed over a long period. The Committee believes that Strategy 2010 would benefit from a clearer evaluation of past economic development policy and an assessment of its successes and failures. This has to be the starting point for the formulation of any future strategy and policy.

3.5. The Committee also feels it is necessary to make the point that the post publication debate on Strategy 2010 was less productive than it might have been - no formal process of evaluation and review had been set up along the lines of the DoE's "Shaping Our Future". What took place before the Committee's present inquiry was more in the nature of a series of presentational events, where information was conveyed by the SSG to an audience but where systematic, constructive and interactive comments and criticism tended not to thrive.

3.6. It is the Committee's strong view that in any major strategic initiative the policy maker should only proceed to implementation after the most exhaustive consultation has taken place. Clearly the appropriate level of consultation did not take place in the Strategy 2010 review. This was confirmed by numerous groups during the course of the Committee's inquiry. The Committee believes that it has now helped to fill that consultation gap through the written and oral evidence sessions.

3.7. The themes suggested by the written and oral evidence can be grouped under four main headings -

3.8. In reviewing what the evidence says about how Strategy 2010 dealt with these themes, it is also useful to group the participants in the inquiry into eight major interest groups: (i) public sector advisory or regulatory bodies (such as the NIEC and the Office for the Regulation of Electricity and Gas (OFREG)); (ii) business associations (such as the Institute of Directors (IOD) and the Northern Ireland Food and Drink Association (NIFDA)); (iii) trades unions; (iv) government executive agencies (such as the Local Enterprise Development Unit (LEDU)); (v) District Councils; (vi) educational bodies; (vii) consumer groups; and (viii) community groups.

3.9. Public sector advisory or regulatory bodies are both independent of sectoral interest groups and have staff with special expertise in areas of policy design and analysis. The business associations tended to focus on sectoral aspects, where they had special expertise, as well as on more general business matters. Trades unions were able to comment on issues related to employment, education and training, as well as on wider issues that influenced their members' welfare. Government executive agencies had line responsibility for policy delivery, and had experience and expert knowledge in these fields. District Councils understood and represented regional and local interests. Educational bodies at all levels, but particularly at the level of higher technical and of degree-level qualifications, represented an input to economic and business development that was crucial to rapid change and progress. Consumer groups were sensitive to the manner in which public policy could operate, intentionally or unintentionally, to affect the interests of consumers and citizens. Finally, community groups were able to comment on the specific problems of disadvantaged areas. In addition to the above, one political party (Sinn Féin) and three individuals presented evidence.

Public Sector Issues

3.10. The evidence indicated that there was universal acceptance that the state, working together with the private sector, had a crucial role to play in economic development. However, most groups expressed doubts about whether the existing balance between public and private sectors was optimal or desirable and also had serious reservations about the efficacy of existing state policies of aid to the private sector.

3.11. Most groups identified the inability of Northern Ireland to match the low rate of corporation tax in the Republic of Ireland as placing existing businesses under serious competitive disadvantages, as well as making it more difficult to attract inward investment. Many agreed with the recommendation in Strategy 2010 that Northern Ireland should have a special rate of corporation tax for new inward investments over a period of 5 years. Other groups felt this recommendation was too aspirational. The NIEC commented -

"Our view is that the recommendation on corporation tax is a non starter - a red herring. I cannot envisage the UK Government allowing a region to have a differential rate of corporation tax".

Dr Bradley was also critical -

"..Strategy 2010 naively puts forward a low rate of corporation tax as a key policy instrument. As if doing that was not bad enough - how it plans to do that within a fiscal union boggles the mind - it is doing it temporarily. It does not even understand that foreign firms tend to plan on the life cycle of a product of perhaps 10 to 15 years for a modern firm".

John Simpson suggested alternatives -

".instead of thinking about differences in taxation, if companies in a particular region reinvest profits to expand their business, they should not pay any tax on those reinvested profits. That is just a different idea, but it might be the key to making a difference" .

3.12. It was certainly clear that amongst the business community there was a consensus that some form of tax concession could be a major incentive for inward and indigenous investment. The Committee believes that this issue could be more seriously addressed if the Assembly had tax varying powers. The Committee makes specific recommendations in relation to fiscal flexibility in Section 5.

3.13. Most groups agreed with the recommendations in Strategy 2010 that Selective Financial Assistance (SFA) should be less readily available to existing firms and that a larger share of resources should be devoted to softer forms of assistance. However, since the total package of existing state aids and incentives available in Northern Ireland had not been presented clearly in Strategy 2010, there were few operational suggestions as to the best way to re-balance the aid package. The LEDU evidence in this respect was persuasive, since that organisation has systematically moved away from "hard" grants towards "soft" grants, and was able to show that the resulting package was both effective and popular. The Committee makes a specific recommendation in Section 5 on the issue of SFA.

3.14. The Committee was impressed with the set up of the US Small Business Administration where the US government is able to provide loan guarantees to small businesses. Two thirds of those taking up these opportunities were women and there was only a 6% default rate on the loans. The Committee recognises LEDU's point that there are cultural differences regarding attitudes to risk and a need for "banks to take a different view of the risks associated with business". The Committee makes specific recommendations in Section 5 relating to loan guarantees and the role of banks.

3.15. Queen's University, in their evidence, mentioned the University Challenge Fund to stimulate business start-ups, which the Committee welcomes. However, Queen's also pointed out the need for more resources at the very early stages of a business - when somebody has an idea and there is potential for that idea to be developed.

"There is a gap in the support to enable the researcher with an idea to develop it for a year or so, to see whether it is worth the investment of venture capital. It will not always work, but unless the mechanism for doing this exists, then the growth of new ideas and new companies will not be generated..".

3.16. The trade union evidence also pointed to the need for a more concerted focus on building up human capital in Northern Ireland if the strategy was really serious about preparing for the "information society".

3.17. Ofreg presented compelling evidence on difficulties in the area of public-private sector policy making. They drew attention to the implications of the differences that exist between the attitudes of commercial firms and the public sector to risk-taking. Ofreg concluded that Northern Ireland's best interests were not well defended in the crucial area of electricity supply and transmission. The Committee's next major inquiry will be on energy and the Committee will be making recommendations on energy issues on conclusion of that inquiry.

3.18. Finally, the question dealing with the appropriate structure for the economic development agencies was widely debated in the evidence. There was general acceptance that there were problems with the existing arrangements (overlap, discontinuity of service, lack of co-operation, lack of focus, etc.). Most groups favoured a single agency approach. Some favoured a dual agency approach - one agency dealing with inward investment and one agency dealing with indigenous industry. The Committee makes a specific recommendation in Section 5. The Committee has already submitted a detailed report to the Minister on this issue (see appendix 1 of this report).

Partnership Issues

3.19. These issues arose in the evidence of almost all groups, although the term "partnership" tended to be used more narrowly to describe "social inclusion" aspects. Although there had been some non-business and non-government representation on the SSG, in general the process was seen as excluding the views of wider groups in society. The feeling of exclusion was exacerbated by the lack of a formal consultation process intervening between the publication and the process of implementing Strategy 2010.

3.20. However, comments on the failure of a spirit of partnership arose in many other areas of evidence. The District Councils, while generally in favour of the strategy, raised serious objections to the spatial concentration aspects of the strategy. Evidence from service sector groups (hotels and tourism) suggested that their problems had been largely neglected. The traditional manufacturing sectors expressed anxiety that their proposals for radical restructuring and renewal (expressed more in the Sectoral Reports than in Strategy 2010 itself) had been downplayed.

3.21. Problems associated with the more conventional usage of social partnership arose particularly in evidence given by trades unions and community groups. Many pointed to the recent experience of the Republic of Ireland, and expressed anxiety that the Economic Development Forum set up within DETI might be too limited a structure within which to build systemic partnership across all social groups within Northern Ireland. John Simpson said -

"My assessment is that the Forum will not take us very far. Who is it accountable to? How critical are its discussions? If it is simply a small advisory group to the Minister, that is fine. The Minister is allowed to have an advisory group. However, it will then lose its role in communicating with the wider community".

Queen's University was disappointed that there was no role for Higher Education on the Forum. Sinn Fein was disappointed that there were very few representatives on the Forum from the community sector.

The Committee makes specific recommendations on the Economic Development Forum in Section 5.

3.22. Partnership issues arose in connection with the external relationships that are a crucial part of strategy development within Northern Ireland. Here, the evidence expressed more a general sense of "unease" rather than raised specific objections. For example, the Northern Ireland Textiles and Apparel Association (NITAA) was conscious of the importance of island-wide branding, but did not find much assistance within Strategy 2010 in building and implementing these complex relationships.

3.23. Partnership issues also arose in terms of social exclusion, for example, in relation to the problem of long-term unemployment. The T&EA and the Department mentioned that long-term unemployment was still a major problem and that little impact had been made in this area. This is an issue which has a clear equality dimension and one that requires action as a matter of urgency. The Committee has made a specific recommendation in Section 5. The Committee was impressed by the success of the FIT (Fastrack to IT) scheme in the Republic of Ireland - an innovative initiative which addresses the IT skills shortage whilst also creating opportunities for the long-term unemployed. The Committee would urge the Department to consider such a scheme for Northern Ireland.

Capital Formation Issues: human capital and infrastructure

3.24. The evidence presented by the District Councils pointed clearly to a sense of malaise in the adequacy of physical infrastructure to support an equitable regional distribution of the likely gains from growth. Some groups were concerned that Strategy 2010 referred only to the Belfast-Dublin transportation corridor. Derry City Council mentioned that "Shaping our Future" includes five key transportation corridors. The City Partnership Board was concerned with the statement in Strategy 2010, in the context of East/West links, that access to the main gateways out of the regions is sufficiently developed to meet the forseeable needs of the economy to 2010. The NIEC claimed that there should have been a target in Strategy 2010 for expenditure on public transport, not just roads -

"If jobs are going to be created (and this is an equality issue as well) people need very good public transportation to get to those jobs. We believe that targets should have been included for expenditure on public infrastructure, including roads and railways".

The Committee has made a specific recommendation on physical infrastructure in Section 5.

3.25. The trades unions and educational bodies raised and developed the complementary point that skill and educational requirements did not appear to be incorporated into Strategy 2010 in a sufficiently systematic way. Since Strategy 2010 had eschewed the use of any systematic framework of analysis such as, for example, Michael Porter's "diamond" of competitive advantage, the groups giving evidence had difficulties in identifying elements missing from the strategy (Michael Porter has suggested that four interacting characteristics are essential for competitive success - factor conditions; demand conditions; related and supporting industries; and firm strategy, structure and rivalry).

3.26. Nevertheless some important points were made by those groups giving evidence. The NIEC felt there should have been targets in the report for education and training. The T&EA accepted that the relationship between the Further Education sector and industry, whilst changing, was not good. The Committee was encouraged by evidence from the Association of Northern Ireland Colleges (ANIC) who gave an example of where a particular training course was customised to meet the needs of Nortel Networks. The Committee would support a greater role for Further Education colleges in providing skills that would be attractive to the knowledge-based economy. The Committee also consider that stronger working links should be developed between the Further Education sector and the DETI agencies.

3.27. The Committee was impressed with the evidence given by the Youth Council -

"We are requesting four things: first, there should be opportunities for careers teachers to get more work experience; secondly, more work experience should be made available to students of school age; thirdly, we need more vocational courses in grammar schools; and fourthly, we need more partnership between schools and the world of work, with talks from managers and more practice in interview skills incorporated into school timetables".

3.28. The Committee has made specific recommendations on human capital issues in Section 5.

Capital Formation Issues: sectoral structure and change

3.29. There was widespread acceptance among business groups that the Northern Ireland economy was likely to undergo major sectoral restructuring over the coming decade, driven by the forces of globalisation such as free trade and technology. While all sectoral groups welcomed the strategy in principle, most expressed anxiety about the special needs of their own specific sector.

3.30. Many of the groups giving evidence feared that greater concentration of aid on high-technology modern sectors would leave the more traditional sectors at an even more serious disadvantage. Strabane District Council did not consider that Strategy 2010 properly addressed the problems in the textile industry and stated that the "document has attempted - if not to actually write off the industry - to forsee the demise of the industry as a labour intensive manufacturing base".

3.31. A number of Councils felt there was not sufficient emphasis in the report on tourism, particularly given the potential for growth in this area. Strabane District Council said that many of the tourism sector working group report recommendations were left out of the report completely -

"These include, in particular the human resource and recruitment challenges of the industry, such as conditions of employment, the industry's record as a low wage employer and the lack of career opportunities".

3.32. Some of the Councils were critical of Strategy 2010's recommendations regarding the rural economy. Moyle District Council said that "while the strategy does make some specific recommendations, it falls short in that it does not appear to have any serious regard for the Department of Agriculture and Rural Development's (DARD) agriculture and rural development policies". Moyle District Council was also strongly opposed to the recommendation that the bed and breakfast sector should be deregulated -

".careful thought needs to be given to the effect that this will have on Northern Ireland's reputation for high quality accommodation weighed against the benefit to the rural economy" .

The difficulties that arose in promoting a more synergistic debate on sectoral restructuring appear to be the result of the poor integration of the Sector Working Group material into the main report. The Committee has made specific recommendations on sectoral development in Section 5.

Analytical Issues

3.33. Problems associated with this theme tended to arise indirectly rather than directly in the evidence. For example, the Committee asked a series of searching questions concerning matters such as the impact of the Euro on Northern Ireland, the ability of Northern Ireland businesses to compete successfully within the Single European Market, the future prospects of a range of important traditional areas of industry, the ability to overcome the disadvantages of fiscal inflexibility, the possibility of an island-wide economic development strategy, and the likely impacts of novel methods of industrial aid (such as interest rate subsidies).

3.34. Although all groups had much to say on these topics, there was a general lack of robust, accessible and useful information and research from which to draw firm guidance. The Committee concludes that the debate on these important and complex issues needs to be better informed, and specific recommendations have been made in Section 5.

SECTION 4: REVIEW OF THE IMPLEMENTATION OF THE
RECOMMENDATIONS IN STRATEGY 2010

4.1. There were a total of 62 recommendations in the Strategy 2010 report, grouped under 5 key themes - Equality and Social Cohesion; Knowledge Based; Enterprise; Outward Looking; and Self Help. The report identified timescales, where appropriate, for each of the recommendations. Part of the Committee's Terms of Reference was "to ascertain the extent to which a number of these recommendations have already been implemented or initiated".

4.2. The Committee received information from the Department showing the current position on each of the 62 recommendations (see appendix 2 of this report). This information showed that 49 of the recommendations have been partially implemented, 6 have been implemented in full, and 7 where no action has taken place.

4.3. The Committee has set out below the recommendations and a summary of the progress made on each of the recommendations, based on the information received from the Department. The Committee has also made comments where it was considered necessary.

4.4. Recommendation 1 - that the cities and towns identified in the DoE's "Shaping our Future" should be the main focus for the future location of industry.

Progress - partially implemented. The Department is liasing closely with the Department of Regional Development; the Regional Development Strategy is expected in early 2001.

Committee comment - the progress made only refers to the completion of the Regional Development Strategy. "Partial implementation" of this recommendation is therefore misleading.

4.5. Recommendation 2 - an Economic Development Forum should be established.

Progress - fully implemented.

Committee comment - there are already a number of social partnership bodies and it is not clear what measures are in place to assess the added contribution of the Economic Development Forum.

4.6. Recommendation 3 - a high powered, high quality research body should be established.

Progress - partially implemented. Review of sources of economic advice initiated by OFM/DFM.

4.7. Recommendation 4 - businesses should take every opportunity to minimise their environmental impact through measures which will also enhance their competitiveness.

Progress - partially implemented. IRTU support programmes underway e.g. environmental audit support scheme; environmental management support scheme.

Committee comment - it is not clear what other measures are to be included in the implementation process. The promotion of renewable energy sources should be included.

4.8. Recommendation 5 - the Dearing report should be speedily and comprehensively implemented.

Progress - partially implemented. A series of reforms was to be introduced from September 2000.

Committee comment - the total timescale allocated in Strategy 2010 for the implementation of Dearing is 2 years.

4.9. Recommendation 6 - economic development strategy must inform education and training policy and its funding and delivery mechanisms.

Progress - partially implemented. Action underway on a range of issues.

4.10. Recommendation 7 - collaborative clusters of schools, businesses and colleges should be established.

Progress - partially implemented. NIBEP business plan launched by the Ministers for DE and DHFETE in September 2000.

Committee comment - Strategy 2010 recommends that pilot studies should be established over the next 12 months. It is not clear if any have been established.

4.11. Recommendation 8 - a valued sub-degree level vocational educational programme should be established.

Progress - partially implemented. Further FE places introduced in October 2000.

4.12. Recommendation 9 - a clearer focus is needed for the Further Education sector.

Progress - partially implemented. A range of measures is underway.

Committee comment - Strategy 2010 recommended that the FE sector should have vocational training designated as its primary activity within a period of 12 - 18 months.

4.13. Recommendation 10 - the current system of careers guidance should be enhanced.

Progress - partially implemented. A review has been initiated.

Committee comment - Strategy 2010 recommends that schools should have made considerable improvements in career advice provision within 12 - 18 months.

4.14. Recommendation 11 - teacher training should include an industry placement module.

Progress - partially implemented. To be recommended as an option for teachers within their professional development. The Department of Education is to consult the Committee for Early Professional Development on the proposal and on how placement might be developed as an elective option.

Committee comment - Strategy 2010 recommends a work placement in teacher training within a period of 12 - 18 months.

4.15. Recommendation 12 - an Information Age Commission should be established.

Progress - partially implemented. The Information Age Initiative's Strategic Framework and Action Plan was launched in April 2000.

4.16. Recommendation 13 - there should be a campaign to promote innovation and good design.

Progress - partially implemented. IRTU Design Directorate has commenced work to evaluate the current design strategy and to develop a new action plan.

Committee comment - Strategy 2010 recommended implementation within 12 - 18 months.

4.17. Recommendation 14 - efforts to increase R&D in indigenous firms should be intensified.

Progress - partially implemented. IRTU have identified targets.

Committee comment - this is an important recommendation if the overall target of business contribution to R&D (1.5% of GDP) is to be met. The timescale in Strategy 2010 for this recommendation was set at 12 - 18 months.

4.18. Recommendation 15 - university/business links should be enhanced.

Progress - partially implemented. Links developing through collaboration on pre-competitive research projects, Centres of Excellence and best practice by universities.

4.19. Recommendation 16 - businesses should look for opportunities to collaborate on R&D.

Progress - partially implemented. IRTU established IRTU Europe to help Northern Ireland companies to develop local and European collaborative networks.

4.20. Recommendation 17 - a separate stream of funding to encourage R&D in universities is needed.

Progress - partially implemented. SPUR programme launched in June 2000. Incentive research funding to be allocated for 2000/01.

Committee comment - Northern Ireland's R&D capabilities have been severely restricted by the realignment of the European Structural Funds. While some progress has been made, much more needs to be done. Investment in R&D in Northern Ireland falls short of that in both the Republic of Ireland and the UK. Innovation as a result of quality R&D will be a key factor in realising much of the vision set out in Strategy 2010.

4.21. Recommendation 18 - further funding should be allocated to the Teaching Company Scheme.

Progress - fully implemented.

Committee comment - the Committee consider that the Teaching Company Scheme is a very successful contributor to technology transfer in Northern Ireland.

4.22. Recommendation 19 - consultation is needed about the coverage of future Centres of Excellence.

Progress - partially implemented. IRTU is undertaking a scoping study on potential applicants, and aims to issue a call for detailed proposals in April 2001.

Committee comment - a timescale of 12 - 18 months was identified in Strategy 2010 for this consultation process.

4.23. Recommendation 20 - there should be a Northern Ireland equivalent of the "Reach Out" fund.

Progress - fully implemented.

4.24. Recommendation 21 - the support structures for spin-out companies should be enhanced.

Progress - partially implemented. 3 business incubation facilities have been established with 1 other under offer.

Committee comment - the Committee welcomes the progress made, but wishes to highlight the importance of monitoring the progress of the spin-out companies.

4.25. Recommendation 22 - a programme to promote Northern Ireland as a region associated with quality design is needed.

Progress - partially implemented. IRTU Design Directorate is working on an Action Plan.

4.26. Recommendation 23 - the Northern Ireland Growth Challenge (NIGC) should further develop its sectoral approach to networking.

Progress - partially implemented. NIGC Action Plans for 6 sectors are the subject of discussion between industry representative bodies and DETI agencies.

4.27. Recommendation 24 - the business bodies should co-operate to increase networking.

Progress - partially implemented. NIGC networking report produced.

4.28. Recommendation 25 - the government should set up a joint working group with the business bodies to consider ways and means of celebrating business success.

Progress - partially implemented.

4.29. Recommendation 26 - the existing grant regime for inward investment should be maintained unless and until new measures become available.

Progress - fully implemented. Current regime is being maintained.

4.30. Recommendation 27 - Northern Ireland should have a special rate of corporation tax for new inward investments over a period of 5 years.

Progress - no action yet.

Committee comment - Strategy 2010 recommended that this objective should be "pursued vigorously" - a timescale of 1-3 years was set.

4.31. Recommendation 28 - Selective Financial Assistance (SFA) should be less readily available to existing firms.

Progress - no action yet. Review of SFA being considered under Programme for Government.

Committee comment - Strategy 2010 states that "the funds available for this purpose should progressively reduce over a period of 3 years".

4.32. Recommendation 29 - the Assembly should discuss further options for tax incentives with the Chancellor.

Progress - partially implemented. The March 2000 budget introduced some incentives.

Committee comment - Strategy 2010 identifies five key tax concessions which could be pursued over the next 3 years.

4.33. Recommendation 30 - financial assistance should be prioritised according to characteristics displayed by applicant companies.

Progress - no action yet. Review of SFA being considered under Programme for Government.

Committee comment - Strategy 2010 identifies 7 characteristics and recommends a three tier structure for prioritising financial assistance within 6 months to 1 year.

4.34. Recommendation 31 - a larger share of resources should be devoted to "softer" forms of assistance.

Progress - no action yet. Review of SFA being considered under Programme for Government.

Committee comment - Strategy 2010 recommends a timescale of 6 months to 1 year for implementation.

4.35. Recommendation 32 - the establishment of a venture capital fund.

Progress - partially implemented. To be considered as part of the Ulster Society of Chartered Accountants and North/South trade body studies, due to be completed in the early part of 2001.

Committee comment - Strategy 2010 recommends a timescale of 6 months for implementation. The designation "partially implemented" is not strictly accurate.

4.36. Recommendation 33 - the development of a Business Angels initiative.

Progress - partially implemented. To be considered as part of the Ulster Society of Chartered Accountants and North/South Trade body studies.

Committee comment - Strategy 2010 states that the first step would be the creation of a database which would contain information about potential investors, within a timescale of 6 months.

4.37. Recommendation 34 - no further out-of-town shopping developments for 5 years.

Progress - no action yet. Being considered as part of the Regional Development Strategy.

Committee comment - Strategy 2010 intended this recommendation to be implemented with "immediate" effect.

4.38. Recommendation 35 - the Assembly should introduce a rates regime which helps to nurture small indigenous retail businesses.

Progress - no action yet. Review of rates underway by DFP.

Committee comment - this recommendation was due to be implemented with immediate effect.

4.39. Recommendation 36 - the Belfast-Dublin road route should be developed as a matter of priority.

Progress - partially implemented. Design contract awarded for the Newry/Dundalk road.

4.40. Recommendation 37 - a centralised plan should be established to develop and budget for Strategic Transport Routes on a UK wide basis.

Progress - partially implemented. BIC sector study underway.

4.41. Recommendation 38 - future energy investment decisions should be made in the context of an island of Ireland energy market.

Progress - partially implemented. Outcome of gas pipeline proposals for North/West and North/South (or South/North) expected in early 2001.

Committee comment - Strategy 2010 recommended a timescale of 1 year.

4.42. Recommendation 39 - the machinery for the creation of an island energy market should be established as a matter of priority.

Progress - partially implemented. Machinery put in place; consultancy study announced.

Committee comment - Strategy 2010 recommended a timescale of 1 year.

4.43. Recommendation 40 - there should be a well resourced, high profile Northern Ireland regional office in Brussels.

Progress - partially implemented. The Executive Committee has agreed to set op an office of the Executive in Brussels.

Committee comment - Strategy 2010 set out 6 specific objectives for the office in Brussels and a timescale of 6 - 12 months was recommended.

4.44. Recommendation 41 - there should be a Minister with special responsibility for Northern Ireland's interests in Europe.

Progress - fully implemented.

4.45. Recommendation 42 - a further round of special EU funding, with a particular focus on economic regeneration is necessary to maximise the benefits of peace.

Progress - fully implemented. A further round of special EU funding for 2000-2005 was agreed at the Berlin summit in March 1999.

Committee comment - the Committee considers that the performance of industry and universities in securing additional funding should be closely monitored.

4.46. Recommendation 43 - programmes such as the Business Education Initiative and Explorers which provide opportunities for students and business people to gain experience and knowledge overseas should be expanded, and new ones developed.

Progress - partially implemented. Business Education Initiative programme to be extended in 2000/01.

Committee comment - Strategy 2010 recommended a timescale of 1 year.

4.47. Recommendation 44 - tailored training courses in self-presentation should be developed and introduced in all schools and colleges.

Progress - partially implemented.

Committee comment - Strategy 2010 recommended a timescale of 1 year.

4.48. Recommendation 45 - foreign language teaching should be extended throughout the education system and the choice of languages available should be widened.

Progress - partially implemented. Department of Education awaiting advice from CCEA, expected Autumn 2001.

Committee comment - Strategy 2010 recommended a timescale of 1 year.

4.49. Recommendation 46 - twinning arrangements with other regions should be developed.

Progress - partially implemented. LEDU developing links with other economic development agencies in particular Enterprise Ireland.

Committee comment - a generous timescale of 2 years was set in Strategy 2010 for this recommendation. The North/South institutions should facilitate greater twinning.

4.50. Recommendation 47 - Northern Ireland should engage more actively in European, UK and, where appropriate, Republic of Ireland initiatives, in areas such as technology, competitiveness, IT and education and training.

Progress - partially implemented. DETI businesses engaging in a number of initiatives.

4.51. Recommendation 48 - the Assembly should address the future funding and evolution of local economic development as soon as possible.

Progress - partially implemented. LEDU's planned Small Business Development plan is to inform wider developments.

Committee comment - the Committee notes that plans to establish a single development agency are well advanced.

4.52. Recommendation 49 - a pilot project to explore methods of rationalising local economic development arrangements should be set up.

Progress - partially implemented. LEDU is currently producing a Small Business Development Plan.

Committee comment - four detailed objectives were identified in Strategy 2010 for this recommendation, to be implemented within a timescale of 6-12 months.

4.53. Recommendation 50 - deregulation of the bed and breakfast sector of the tourism industry should be considered.

Progress - partially implemented. NITB Review report indicated necessity for and benefits of classification.

Committee comment - there was strong opposition to this recommendation in the evidence presented to the Committee.

4.54. Recommendation 51 - new technology driven businesses should be promoted in rural areas.

Progress - partially implemented. The Department has recently launched two programmes - Enterprise Excellence and Fast Forward Finance aimed at assisting small knowledge-based businesses.

4.55. Recommendation 52 - a technology training programme targeted at those working in a rural community should be devised.

Progress - partially implemented. Skills Task Force is funding research project to identify needs.

4.56. Recommendation 53 - an updated energy policy statement should be adopted.

Progress - partially implemented. NI/ROI consultancy study to be commissioned leading to report in June 2001.

Committee comment - Strategy 2010 set a timescale of 12 months for this recommendation.

4.57. Recommendation 54 - strategic investments may require a public/private partnership justifying public investment.

Progress - partially implemented. Action dependent on receipt of private sector proposals.

4.58. Recommendation 55 - targets should be set for use of non-fossil fuels for electricity generation, for the achievement of energy efficiency and the use of Combined Heat and Power.

Progress - partially implemented. Consultation paper on renewables issued in October 2000.

Committee comment - Strategy 2010 recommended immediate action.

4.59. Recommendation 56 - the recommendations of the Government's Utilities Regulation Review should be fully implemented.

Progress - partially implemented. DETI to issue consultation paper in late 2000.

Committee comment - Strategy 2010 set a timescale of 12 months for implementation.

4.60. Recommendation 57 - the revision of the electricity generation contracts should be brought to a speedy conclusion.

Progress - partially implemented.

Committee comment - Strategy 2010 set a timescale of 12 months for implementation.

4.61. Recommendation 58 - the £40 million fund, held by DED, should be used to buy out generating capacity currently under contract to NIE.

Progress - partially implemented. Letter of Agreement signed with NIE and Premier Power on 12 October 2000.

Committee comment - Strategy 2010 set a timescale of 12 months for implementation.

4.62. Recommendation 59 - the public administration arrangements in Northern Ireland should be reviewed urgently.

Progress - partially implemented. Being considered by OFM/DFM under Programme for Government.

Committee comment - Strategy 2010 set a timescale of 12 months for implementation.

4.63. Recommendation 60 - the recommendations of the McKie report relating to a sectoral approach and to information sharing should be implemented as soon as practicable.

Progress - partially implemented. Phase 1 of Corporate Information Sharing project completed August 2000.

Committee comment - Strategy 2010 set a timescale of 12 months for implementation.

4.64. Recommendation 61 - a new single economic development body should be created.

Progress - partially implemented. Consultative document issued.

Committee comment - the Committee notes that plans to establish a single development agency are well advanced.

4.65. Recommendation 62 - a Northern Ireland Development Fund should be established.

Progress - no action yet.

4.66. The above is a summary of the progress of the 62 recommendations in Strategy 2010. A number of the recommendations have only been partially implemented and a number still require action. The Committee acknowledges that time has moved on since Strategy 2010 was published in March 1999. Strategy 2010 did not, for example, anticipate skill shortages in certain sectors nor the problems in the textiles industry. Nevertheless there is, in the Committee's opinion, a much greater need for transparency in the monitoring of Strategy 2010. It should be made clear, for example, if any of the recommendations are now no longer appropriate, or if any of the timescales have been extended. The Committee has made specific recommendations in the next section which will, in the Committee's view, lead to greater clarity and transparency in the monitoring process.

SECTION 5: THE FUTURE OF ECONOMIC DEVELOPMENT
STRATEGY IN NORTHERN IRELAND

INTRODUCTION

5.1. In the final part of the Committee's report we address the difficulties and problems highlighted in the evidence presented and attempt to point the way ahead for the future.

5.2. The full process of strategic policy making can be usefully viewed as having six stages -

Stage 1: The appointment of a Strategy Group. The Group is drawn up of private sector, public sector and voluntary sector representatives, trade unionists, academics, etc. Involvement at this stage usually does not include the traditional policy makers (civil servants), as the purpose of the exercise is to review existing policy very openly, from the perspective of those who operate in the market place.

Stage 2: The commissioning of studies of the economy covering all of the key areas. These studies are typically undertaken by consultants and academics, and can involve local and international inputs. The publication of these studies plays an important role in validating the process and in increasing understanding by different agents of the inevitable trade-offs that are involved in strategic policy making.

Stage 3: The analysis of the studies by the Strategy Group and its determination of a strategic approach to policy, based on these studies.

Stage 4: The publication of the Strategy Group's report and its presentation to all relevant groups, who are invited to respond to it.

Stage 5: The establishment of a broadly-based Implementation Task Force with a different membership from the Strategy Group, and drawing membership at the most senior level from all of the major departments which are affected by the plan. This breadth of civil service membership is essential to give recognition that the business climate in an economy depends on a range of key departments and not just those directly involved in the industrialization process. The Task Force might also include some additional members such as private sector, public sector, and voluntary sector representatives, where these provide expertise (e.g. academia) - they are not required for consultation/representation since that phase is by then complete. The mandate of the Implementation Task Force is to respond to any difficulties identified by the relevant groups consulted and to draw up a plan for implementation.

Stage 6: The formal response by Government to the implementation plan and its amendment/endorsement.

5.3. Looked at in this context, it appears to the Committee that Stage 4 of the process has been completed, albeit with not quite the same openness and independence one might expect: there were no consultative reports published and there was a high degree of policy-maker representation from a small area within the public service. We now consider where and how the process might proceed to completion from here and we present our views on this in a series of recommendations.

GENERAL RECOMMENDATIONS

5.4. The Committee is sympathetic to the strongly expressed views of many of the organizations and individuals who gave evidence to the Committee's inquiry, that the urgency of the economic challenges facing Northern Ireland simply does not permit further long delays and procrastination. The Committee believes also that the establishment of a truly inclusive partnership between the different groups in Northern Ireland is central to any successful growth process. In order to minimise the social friction which the process of economic growth inevitably generates, and to enhance the outcomes from the process, there needs to be, among all sections of society, a sense of ownership of the process of economic growth and its outcomes.

5.5. It is of central importance to the future prosperity of Northern Ireland that the most appropriate economic policies be adopted now and that, furthermore, such policies be widely understood, and generally accepted, by the people of Northern Ireland. At this point, therefore, the two key steps are firstly, to complete the strategic process and secondly, to establish a proper partnership structure within which policy formation in Northern Ireland can be embedded.

General Recommendation 1 - An Expanded Economic Development Forum

5.6. An expanded Economic Development Forum should be responsible for the implementation of Strategy 2010 (stage 5) and should report on a regular basis to the Enterprise, Trade and Investment Committee. Representation on the Forum should be more broadly based than at present. It should include representatives from all relevant government departments, District Councils, the Higher and Further education sector, and an enhanced representation from the community and voluntary sector. Its role should be to advise on how Strategy 2010 should be revised, prioritised, made consistent with other policies and strategies, and implemented effectively in the context of globalisation, the evolving island economy and the demands of the Good Friday Agreement.

General Recommendation 2 - Partnership Issues

5.7. The Committee recommends that the making of economic policy in Northern Ireland should extend well beyond the confines of industrial development to embrace issues of economic development, sustainable growth, and social cohesion. Economic policy should be grounded in a sense of partnership between the stakeholders in society because when policies are not buttressed by a sense of shared ownership in them, they lead to the social exclusion of those whom they leave behind.

5.8. The Committee recommends that issues of partnership should encompass four aspects -

5.9. Finally, the principle of partnership needs to be extended so that it is fully inclusive, including representatives of the community and voluntary sectors. Effective social inclusion with teeth needs to be at the heart of policy formulation and implementation.

DETAILED RECOMMENDATIONS: AGENDA FOR CONSIDERATION BY THE EXPANDED ECONOMIC DEVELOPMENT FORUM

5.10. The Committee identified five broad sets of recommendations, relating to -

The Public Sector and Industrial Development Policy Instruments

5.11. While taking a wider perspective on the total environment in which business operates, it is essential to ensure that the direct instruments of policy are appropriate. The key elements in any development aid process are the fiscal environment, the availability of financial assistance (the amount and form it takes), the operation of industrial promotion (the agency structure and mandate) and the evaluation of the system.

5.12. In the light of the above discussion, the Committee makes the following recommendations.

Recommendation 1 - Fiscal Flexibility

5.13. The Committee recommends, as part of the Implementation phase of the Strategy 2010 process, that a detailed study be carried out by independent experts on the advantages and disadvantages, costs and benefits, of having greater fiscal flexibility within the regions of the United Kingdom, with particular focus on the special needs of Northern Ireland (and making comparisons with Scotland and Wales) in the context of what is possible under devolution. (See Paragraph 3.12 of this report).

Recommendation 2 - The Barnett Formula

5.14. The Committee recommends that the Barnett Formula, which determines Northern Ireland's block grants from the treasury, should be reviewed. Lord Barnett stated that the formula was only introduced as a short-term measure in the late 1970's and that a new way of allocating public resources should be found based on a more objective measure of relative need. This would help Northern Ireland alleviate the problems that arise from having a land border with another European country. The Committee recommends that a joint delegation of members from the Enterprise, Trade and Investment and Finance and Personnel Committees should meet the Chancellor of the Exchequer. This meeting should be held to discuss progressive alternatives to the Barnett Formula and the implications of the problems raised.

Recommendation 3 - Tax Rules

5.15. The Committee recommends that the tax rules should be explored with a view to creating further tax relief incentives for re-investment.

Recommendation 4 - Banks

5.16. The Committee recommends that banks in Northern Ireland should take a proactive approach towards encouraging local enterprise and provide a clear, open and transparent charging structure and reasonable rates of interest.

Recommendation 5 - Single European Currency

5.17. The Committee recommends a detailed study of the impact on Northern Ireland business of the arrival of the Single European Currency in the Republic of Ireland, including recommendations to help local traders overcome any detrimental effects arising from their proximity to, and location outside, the Euro-zone.

Recommendation 6 - Tax Exemption for the Creative Industries

5.18. The Committee recognises the enormous potential of the creative industries to the new knowledge-based economy. The Committee recommends a tax exemption for artists, craftspeople and the creative industries in Northern Ireland as a means of fostering the economic, social and cultural benefits of these activities.

Recommendation 7 - Selective Financial Assistance

5.19. The Committee recommends that all areas of Strategy 2010, where reference is made to reform of grant assistance to industry (SFA), be examined by independent experts who should draw on the wide range of existing research within Northern Ireland and further afield. The conclusions of the expert review should be used to make specific policy proposals for the reform of the present system.

Recommendation 8 - Loan Guarantees

5.20. The Committee recommends that small businesses should be assisted, where appropriate, by loans guaranteed by Government similar to the scheme operated by the Small Business Administration in the US.

Recommendation 9 - Innovation, Design, Marketing and Export

5.21. The Committee recommends support for innovation, design, marketing and export in all areas of production as a means of adding value to local industry.

Recommendation 10 - Clean, Green Production

5.22. The Committee recommends that measures are taken to encourage greater movement towards clean, green production methods, including increased use of alternative and renewable energy, energy efficiency, the polluter pays policy for industrial development, and incentives for waste management and recycling.

Recommendation 11 - Environmental Protection

5.23. The Committee recommends focussed R&D strategies to support the development of new technology industries designed to enhance environmental protection and reduce global warming.

Recommendation 12 - Single Development Agency

5.24. The Committee recommends the establishment of a single development agency which should incorporate IDB, LEDU and IRTU. It should be an arms length agency modelled on LEDU rather than an agency located fully inside government, but with full accountability to the Minister and the Assembly (see appendix 1 of this report).

Recommendation 13 - Regional Disparities

5.25. The Committee recommends that the Economic Development Forum needs to address the regional disparities within the Northern Ireland economy and promote distinctive measures to redress the geographical imbalances.

Recommendation 14 - Targets

5.26. The Committee recommends that targets be set in a number of areas including public sector investment in R&D, tourism, productivity and the achievement of equality.

Partnership and Cohesion

5.27. The Committee drew attention earlier to the importance of partnership and, in particular, to its significance in minimising any sense of exclusion that the process of growth would inevitably generate among those whom it did not touch, or touched only lightly. Social exclusion has three important aspects: poverty, or exclusion from income; long-term unemployment or exclusion from the labour market; and exclusion from essential services. The Committee was particularly concerned about the exclusion of women and vulnerable groups from the labour market. The Committee also drew attention, earlier, to the importance of forging economic and social links both across the two parts of the island of Ireland, and throughout the British Isles and Europe, as well as internationally. The Committee also wishes to highlight the rapidly developing social economy sector and the important social role this sector has to play in local communities. Finally, the Committee believes there is a need for business and industry to take on a much greater role in terms of their "social responsibility". In the light of these observations, the Committee makes the following recommendations.

Recommendation 15 - Poverty

5.28. The Committee recommends that there should be a detailed study on issues of poverty in Northern Ireland both on the basis of low income and on the basis of deprivation of necessities, taking account of New TSN and Promoting Social Inclusion policies. The success of all government departments in tackling deprivation should be monitored.

Recommendation 16 - Long-term Unemployment

5.29. The Committee recommends that there should be a study on why rates of long-term unemployment in Northern Ireland are substantially higher than those in Britain, with particular emphasis on -

The Committee would urge the Department to consider the FIT (Fastrack to IT) scheme which has been introduced in the Republic of Ireland.

Recommendation 17 - Vulnerable Groups

5.30. The Committee recommends increased aid for specialised training packages to give minority groups, such as the disabled and ethnic minorities, and vulnerable groups, such as the long- term unemployed and marginalised youth, greater access to job skills and employment.

Recommendation 18 - Women in the Workplace

5.31. The Committee recommends an increased focus on the recruitment and promotion of women in the workplace, including targeted training for women, workplace creche facilities, increased access to job share and greater use of family friendly and flexible working hours.

Recommendation 19 - Economic interaction with the Republic of Ireland

5.32. The Committee recommends that an expert group be appointed to examine the whole range of issues that arise for Northern Ireland as a result of its proximity to, as well as its economic interaction with, the Republic of Ireland. The Committee recommends that the relevant policy implications arising from this research be incorporated into Strategy 2010 and that the role of InterTradeIreland be acknowledged.

Recommendation 20 - Stronger links with Europe

5.33. The Committee recommends promoting stronger links with continental Europe, through the new Brussels office, with particular focus on accessing the emerging markets of Eastern and Central Europe in preparation for EU enlargement.

Recommendation 21 - Studies on the Social Economy

5.34. The Committee recommends that detailed studies be carried out on -

Recommendation 22 - Support for the Social Economy and Local Economic Development

5.35. The Committee recommends greater support for the social economy as a tool for promoting social inclusion, through local capacity building, community education and the not-for-profit business sector. The Committee also recommends greater focus on the importance of support structures for maximising the potential of local economic development and the skills and expertise which exist therein.

Recommendation 23 - Social Responsibility

5.36. The Committee recommends incentives to encourage greater social responsibility in business and industry with regard to its employment practices, its contribution to the local community and the environment and its approach to trade with newly industrialised and developing countries.

Capital Formation Issues: the economic infrastructure

5.37. Raising the rate of productivity growth in Northern Ireland, with a view to narrowing the difference in productivity with the EU, lies at the heart of efforts to secure for Northern Ireland a better standard of living. In turn, improvements in the "economic infrastructure" of Northern Ireland are central to boosting its productivity growth rate. The concept of economic infrastructure encompasses three elements. First, there is the broad physical infrastructure of Northern Ireland, embracing the state of its roads, railways, air services, energy provision, water supply etc. Second, there is the quality (and quantity) of the physical capital - machinery, plant and building - available to its industry. Third, there is the human capital embodied in the skills and educational levels of its labour force. The collective of these three items for Northern Ireland - constituting its economic infrastructure - is an important determinant of its productivity levels.

5.38. The Committee considers there is scope for considerable improvement in relation to physical infrastructure and human capital issues. In relation to physical infrastructure, the Committee is aware of the valuable consultation being carried out by DRD on the future of transport in Northern Ireland and acknowledges the important need for inter-departmental co-operation in this area. However, the Committee believes there are serious deficiencies in the transport infrastructure which needs to be improved to ensure that it meets the needs of a modern economy. In relation to human capital, the Committee recognises the work being carried out to improve the employability of students. Nevertheless, much more needs to be done at secondary level and in the Further Education sector, particularly to ensure that students are provided with key skills for the knowledge-based economy.

5.39. Lower productivity levels in Northern Ireland, relative to the EU, could also be due to other factors such as lower levels of R&D expenditure, and the smaller manufacturing base in Northern Ireland which is, moreover, concentrated in low productivity industries.

5.40. In the light of the above observations, the Committee makes the following recommendations.

Recommendation 24 - Transport Infrastructure

5.41. The Committee recommends a massive injection of funding over the next 10 years to develop a world class transport infrastructure within all regions of Northern Ireland to bring it into line with the needs of a modern world class economy, taking into account the legal equality duties and policies.

Recommendation 25 - Strategic Approach to Transport Policy

5.42. The Committee recommends a strategic approach to transport policy on the island of Ireland and within these islands with regular meetings of the regional/national transport Ministers of the relevant authorities to provide for increased co-operation.

Recommendation 26 - Education

5.43. The Committee recommends a system of education which increases the potential of all children, reduces the failure culture, improves access to employment through career guidance, enhances links with business and industry, gives more recognition for vocational studies and makes greater use of work placement in industry.

Recommendation 27 - Further Education and Training

5.44. The Committee recommends much greater links between the Further Education sector and industry, particularly with a view to preparing students for new skills to accommodate the knowledge based economy; and increased support for in-house training at all levels as well as re-skilling courses, particularly for those sectors such as textiles which are particularly vulnerable to change.

Recommendation 28 - Commercialisation of New Technologies

5.45. The Committee recommends that the Department urgently ascertain how to significantly improve the rapid commercialisation of new technology concepts, particularly those in the e-commerce and bio-technology (life/health sciences) fields.

Capital Formation Issues: patterns of sectoral development

5.47. The main challenge facing the economy is the need for a fundamental restructuring of its industrial structure. The economy is currently too dependent on industries which produce low quality, low technology goods, and which have relatively low levels of productivity, and where the level of wages is also low. The performance of industry has been, and continues to be, hidden by the high level of public subsidy and assistance it receives. By European standards, this level of public subsidy is unacceptably high and needs to be reduced substantially if more self-sustaining industrial development is to occur over the longer term. The retarded nature of industrial development is highlighted when comparisons are made with the more dynamic, high technology, high productivity and less subsidised industrial base in other regions of the EU.

5.48. If we are to compete more effectively in global markets and exploit the substantial benefits that undoubtedly exist from closer integration with the Republic of Ireland economy in particular, then the economic base has to fundamentally change. This is a huge challenge. It is made more difficult as a result of the major problems the economy faces coming out of conflict. The nature of our economic failure and inequality has to be explicitly recognised if a genuine start to resolving our economic problems is to be made. Foreign investment has an important role to play in this economic reconstruction, but more important is the need to build, strong, dynamic and competitive indigenous industries. It is from the successful development of firms and industries which are locally based that sustainable and long-term economic development will be brought about most successfully.

5.49. Furthermore, policy should not unduly concentrate on manufacturing as we know that many activities that previously were undertaken within manufacturing are now undertaken within the business service sector. Indeed growth in producer and consumer services has been responsible for much of the growth in employment in many Western economies in the past decade. Among consumer services, growth in tourism is one of the real successes of globalisation - and the economy of Northern Ireland in particular has an opportunity to exploit an almost untapped tourist industry if it can generate a suitable commercial environment. To do this, it is not simply a question of making minor amendments to the existing arrangements - it involves focusing on the key issues in the sector and considering how they can be dramatically improved.

Also, the Committee agrees with the concerns expressed in the evidence presented to it about the possible effects on standards if the bed and breakfast sector is deregulated. The Committee believes that high quality accommodation is vital if the potential for growth in the tourism sector is to be realised.

In the light of these observations, the Committee makes the following recommendations.

Recommendation 29 - Small and Medium Sized Businesses

5.50. The Committee recommends that a highly selective policy be adopted by the new industrial development agency to foster the development of small and medium-sized enterprises in the manufacturing sector; such a policy should operate with the intention of cultivating an entrepreneurial culture within society, and should focus on those businesses which can engage from an early stage in global sub-supply, using e-commerce to maximum advantage.

Recommendation 30 - Local Service Sector

5.51. The Committee recommends that the role of the local service sector in assisting companies in the manufacturing sector to achieve international competitiveness should be addressed formally. Anti-competitive practices should be investigated where these raise costs unduly and the potential for internationalising local services should be considered, with companies expanding outside Northern Ireland being possibly considered eligible for financial support.

Recommendation 31 - Tourism Sector - Strategic Development Plan

5.52. The Committee recommends that the new strategic development plan for the tourism sector should address key issues in the sector such as hospitality training, marketing, and recruitment challenges, with a view to its developing on a par with the tourist industry in the Republic of Ireland and Scotland.

Recommendation 32 - Tourism Sector - Market Focused Approach

5.53. The Committee recommends that the tourism sector should be encouraged and supported with grants and financial incentives in developing a market focused approach. This approach should centre on the establishment of a brand image for Northern Ireland and should encourage demand for shoulder and off-peak seasons.

Recommendation 33 - Bed and Breakfast Sector

5.54. The Committee considers that issues of quality and standards are vital and accordingly recommends that the bed and breakfast sector should not be deregulated.

Recommendation 34 - Studies on how the Economy can be Transformed

5.55. The Committee recommends that studies should be carried out on -

The Information Infrastructure

5.56. On the basis that "one cannot manage what one cannot measure" the challenge for the Northern Ireland economy is to develop quickly the type of information infrastructure that one would expect to find in a modern economy. The first step in this process is the preparation of databases for Northern Ireland consistent with it being a devolved economic entity, allowing comparisons with other countries and regions within Europe. These databases will allow economists within the public sector to generate short-term forecasts and develop medium term models which can be used to explore the effects of different policy scenarios. In addition, it would be important to develop frameworks of analysis which would match the special features of the economy. This type of infrastructure is essential, we believe, if Northern Ireland is to achieve the economic success to which it clearly aspires. Accordingly the Committee makes the following recommendations.

Recommendation 35 - Data Sources

5.57. The Committee acknowledges the existing review being carried out by NISRA and recommends that - all economic data currently collected on Northern Ireland should be published locally within Northern Ireland by a single local agency in addition to later (or simultaneous) publication in the United Kingdom by the Office for National Statistics (ONS). Where data "gaps" are identified, steps should be taken to collect and publish new data series. Where sample size (e.g. Labour Force Survey) requires a larger sample than currently undertaken, plans should be put in place to prepare to make this additional investment in data collections, so that the full impact of policies can be monitored.

Recommendation 36 - Research Agenda

5.58. The Committee recommends that a research agenda for Northern Ireland should include the investigation and testing of how existing frameworks of development might apply to the economy, so that appropriate concepts of development will be used in partnership and policy discussions.

Recommendation 37 - Independent Research Group

5.59. The Committee recognises the important contribution NIEC has made over the years and fully supports its independence in carrying out research. Accordingly, the Committee recommends increasing the role of NIEC and its task should include the regular preparation of detailed and authoritative quarterly forecasts for the Northern Ireland economy as well as the preparation of medium-term (5-year) forecasts every two years. The Committee believes this to be essential if the best possible independent guidance is to be provided to policy makers in the public and private sectors.

SECTION 6: CONCLUSION

6.1. Economic and social development strategy will be at the centre of the activities of the new devolved administration in Northern Ireland. The success of development initiatives in the areas of economics and regional planning will depend to a large extent on getting the strategic process right. Within that process, it is only after the most exhaustive consultation that policy makers should proceed to implementation. It is better that time be spent at the analysis and design stages - capturing all knowledge and ideas to stimulate innovative thinking - where changes can easily be made, than to rush to the implementation stage, where it is both difficult and costly to revise and correct.

6.2. The Committee has drawn attention to the fact that there appears to be widespread consensus within Northern Ireland on the global nature of the main driving forces of the economy and the social aspects to the challenges that will arise as a consequence of transformation and change. Almost without exception, small European states and regions have had to evolve towards indirect forms of economic control. What characterises their economic and political experience and sets them apart from the large industrial countries is the premise of their planning efforts: namely, adaptation to external market forces and change. They have generally come to find detailed comprehensive sectoral planning efforts increasingly inapplicable, simply because of the openness and vulnerability of their economies. Their problem is one of selecting the devices of planning that are in harmony with their social objectives. Hence, the rationale for state intervention depends on the ability or otherwise of market forces to yield results consistent with these social objectives. Because of their lack of autonomy, strategy in small regions must be flexible, reactive and incremental. Small regions can neither oppose change nor ignore change if they wish to prosper.

6.3. In the Committee's review of what we have called the "Strategy 2010 process", we drew attention to the fact that the published report appears to have won only the qualified approval of many groups in Northern Ireland. Perhaps we ought not be too surprised by this, since the logic of strategic planning requires a full and frank consultative stage prior to revision and implementation. Indeed, a detailed reading of the written and oral evidence presented to the Committee provides an impressive range of ideas and comments that indicate how important it is for groups and individuals in Northern Ireland to feel that their views are being listened to and - where reasonable - acted upon. This is not to suggest that there will be total agreement on every issue - but to point to the importance of achieving as much consensus as possible and to have solid, research-based grounds to underpin difficult decisions where consensus cannot be achieved.

6.4. In Section 5 of the Committee's report the Committee tried to point the way forward for the Strategy 2010 process through two General Recommendations. The first concerned the need to complete the additional phases of the strategy review that have not yet been carried out. The second pointed to the overarching need in the design, implementation, monitoring and revision of economic strategy for Northern Ireland to build institutions grounded in partnership.

6.5. The Committee offered a series of 37 detailed recommendations in five specific areas: the public sector and industrial development policy instruments; partnership and cohesion; economic infrastructure; sectoral development; and the information infrastructure. In arriving at these recommendations the Committee has been guided and inspired by the evidence presented to its inquiry. Our thanks go to the many organisations and individuals who gave both written and oral evidence.

LIST OF ABBREVIATIONS USED IN THE REPORT

ANIC Association of Northern Ireland Colleges
BIC Business in the Community
CCEA Council for the Curriculum Examinations and Assessments
DARD Department of Agriculture and Rural Development

DE Department of Education
DED Department of Economic Development
DETI Department of Enterprise, Trade and Investment
DFP Department of Finance and Personnel
DHFETE Department of Higher and Further Education, Training and Employment
DoE Department of Environment
DRD Department of Regional Development
EDF Economic Development Forum
EU European Union
FE Further Education
GDP Gross Domestic Product
HE Higher Education
IDB Industrial Development Board
IOD Institute of Directors
IRTU Industrial Research & Technology Unit
IT Information Technology
LEDU Local Economic Development Unit
NIBEP Northern Ireland Business Education Partnerships
NIE Northern Ireland Electricity
NIEC Northern Ireland Economic Council
NIERC Northern Ireland Economic Research Centre
NIFDA Northern Ireland Food and Drink Association
NIGC Northern Ireland Growth Challenge
NISRA Northern Ireland Statistics & Research Agency
NITAA Northern Ireland Textiles and Apparel Association
NITB Northern Ireland Tourist Board
OFM/DFM Office of the First and Deputy First Minister
OFREG Office for the Regulation of Electricity and Gas
ONS Office for National Statistics
PAFT Policy Appraisal and Fair Treatment
PfG Programme for Government
QUB The Queen's University of Belfast
R&D Research & Development
SFA Selected Financial Assistance
SME Small-Medium size Enterprise
SPUR Support Programme for University Research
SRU Strategy Review Unit
SSG Strategy Steering Group
T&EA Training and Employment Agency
TSN Targeting Social Need

APPENDIX 1

COMMITTEE'S REPORT ON RESTRUCTURING OF THE ECONOMIC DEVELOPMENT AGENCIES

Sir Reg Empey, MLA
Minister for Enterprise, Trade and Investment
DETI
Netherleigh
Massey Avenue
BELFAST

30 November 2000

Dear Sir Reg

Reorganisation of the DETI Economic Development Agencies

Thank you for your letter, dated 26 October, and consultation paper requesting the Committee's views on the reorganisation of the Economic Development Agencies.

We would, first of all, like to make the point that we have had a very short timescale to consider this important issue, even allowing for the 1 week extension for our response. We would like to stress therefore that our views, at this stage, are only of a preliminary nature. In reaching our views we took account of the consultation paper itself, the paper on "Lessons and Experiences from Elsewhere" and the response from the Department to the 17 written questions put by the Committee.

We intend, in January, to visit the Welsh Development Agency, Scottish Enterprise, and the IDA and Enterprise Ireland in order to provide us with a much more informed view on this issue. We will, of course, write to you if there is anything further to add to this response.

Please see attached our report on the consultation paper. We have also attached a diagram setting out our initial views on a possible structure of the new agency.

Yours sincerely

 

[Agreed by the Chairperson and signed in his absence]

PAT DOHERTY

Chairperson
Enterprise, Trade and Investment Committee

COMMITTEE'S REPORT ON RESTRUCTURING OF THE
ECONOMIC DEVELOPMENT AGENCIES

1. General points

The main distinction should be between indigenous and foreign owned firms which require set programmes.

The accountability of the development agency should be paramount, with access given to participation of social partners on the board of the agency.

The agency should be kept under the control of government with the Minister and the Committee playing a central role.

All-Ireland economic co-operation is essential in order to prevent wasteful duplication, as is increased co-operation with the UK regions. Intertradeireland would play a central role in ensuring co-ordination and co-operation.

Equality and TSN obligations need to be at the centre of policy and decision making.

New, invigorated policies and ideas need to go hand in hand with structural change of the agencies.

Innovation and technological development should be central to agency restructuring and not left as a stand alone body as at present (the IRTU).

2. Local Economic Development

2.1. We agree that there is a need for greater co-ordination and less confusion and duplication in the field of local economic development. We believe that the new agency should have a strong regional presence and should have some form of mechanism to provide better linkages and co-ordination with local councils.

3. Multiple agency or one agency

3.1. We agree, in principle, to the single agency approach. As part of the "Strategy 2010" inquiry the Committee put the question of a single development agency to a number of organisations and individuals. In general there was support for the single agency approach. Some organisations made the point that with a multiple agency approach there were too many ports of call, which was both confusing and time consuming for the customer.

3.2. We debated the question of whether there should be one organisation dealing with inward investment and one dealing with indigenous industry. We considered that both these roles, whilst requiring separate programmes and specific skills, should be incorporated inside a single agency.

3.3. We also wish to stress that the new agency should be a completely new organisation and not simply a "bolting together" of the existing organisations, not an IDB mark 2.

4. Status of new body

4.1. We favour an arms length agency modelled on LEDU rather than an agency located fully inside government. This would provide greater freedom, flexibility, speedier decision making and a much more business like culture. The new agency should be democratic, transparent and accountable. There should be a regular review of the agency's performance every 3 years with clear and transparent targets agreed at the outset.

4.2. The agency's staff should include people with industrial and commercial experience and expertise outside the Civil Service and it should have the ability to contract people for specific pieces of work. Staff promotion, terms and condition should not necessarily follow Civil Service terms.

4.3. The board of the new agency should be an executive board with full power and authority to make decisions. The executive chair should be employed possibly 2-3 days per week and the vice chair possibly 1 day per week to ensure hands on involvement. All executive directors should be recruited through public advertisement on fixed term contracts.

4.4. We have set out our initial thoughts on the structure of the new agency in the attached diagram. The structure should include the following discrete areas - trade and enterprise; inward investment; small businesses; innovation; the social economy; and administration. The administration element should have responsibility for issues such as monitoring equality, TSN and policy appraisal and will link to all other directorates.

5. Policies and programmes

5.1. The Management Development Programme and the Company Development Programme should be reinforced, with an increased focus upon the development of skills in the workforce as a whole. Many reports have indicated the importance of these programmes, however they need to be extended and joined up with skills delivery programmes in areas of high unemployment and deprivation.

5.2. In this context, and given the huge disparities in society, it is important that policy be driven by communities and their political representatives. This is particularly the case given the problems surrounding accountability and transparency on the part of the current agencies. It is essential then that policy is determined centrally, in particular by the Minister and Committee for Enterprise, Trade and Investment. However, the contribution which the social partners, including voluntary and community-based organisations, can make must be allowed for. However, overarching policy should be decided at Departmental level.

6. Innovation

6.1. We consider that an ability to innovate and to commercially exploit innovation is crucial to the future of economic policy. There was some concern expressed during our inquiry into "Strategy 2010" that innovation might lose its sense of focus if it became part of a new agency. We believe that innovation, research and development should be fully located within the new agency but should be given a very much enhanced role within the agency.

Given the importance of R&D to building competitiveness in the modern economy, it is important that the structure adopted will not reduce the success of programmes encouraging greater expenditure in the commercialisation of knowledge. IRTU has a good record in encouraging this, so therefore any inclusion of its role into a unified agency will clearly only have benefit in terms of imbedding it into the overall support given to businesses.

7. Co-operation

7.1. Complementary working relationships should be encouraged between the new agency, Enterprise Ireland and the IDA, as well as with other agencies in Scotland and Wales, for the encouragement of inter-business and marketing links. It is envisaged that a key marketing role would be played by the new IntertradeIreland body.

8. The social economy

8.1. As part of the review of existing structures, it is important to include the burgeoning social economy sector. At present, this sector receives very little support from central government, despite its important role in the regeneration of areas often characterised by poverty and deprivation. At present, there is no departmental agency charged with the development of this growth sector and no funds are committed from central government specifically for the purpose of supporting start-ups. Given the important social role which such businesses have to play in the various communities, concerns regarding grant-dependency can be left to one side, at least in the short to medium term. In addition, the current round of European funding has specifically directed support towards sustainable social economy projects. This situation needs to be recognised in the structures of the Department's economic development agency. Specifically, a Social Economy directorate should be established with a clear role in encouraging community-controlled businesses and developments.

9. Tourism

The NITB should remain outside the new agency. Given the need to incorporate the development of tourism businesses within the mainstream of tourism development, responsibility for the development of tourism infrastructure should be firmly integrated into mainstream local economic development. Specifically, the role of local authorities needs to be revisited in terms of support and development loans. In parallel, overarching programmes should be run in the agency with responsibility for indigenous owned businesses.

10. Accountability and autonomy

10.1. Thought must be given to how locally elected councillors and local government generally will be given the greatest possible powers with respect to local economic development, compatible with ensuring the achievement of targets both in social inclusion and economic growth. There is a strong case for giving responsibility for supporting small businesses and social economy projects to local authorities. A meaningful role for local authorities in the process of negotiations with inward investors must be found and overall accountability must be assured through a transparent accounting procedure and policy appraisal process opened to the Assembly, and specifically, the DETI Minister and Committee.

10.2. A further recommendation can be made from the study conducted regarding the adoption of the US Small Business Administration model for substituting loan guarantees in place of Selective Financial Assistance (SFA) for the purposes of equity and capital expenditure. The dependency on the 'grant culture' has been identified by various reports repeatedly as a limit on competitiveness. Instead the resources currently channelled into SFAs should be redirected towards loan guarantees, R&D, education and training programmes and supporting business start-up programmes. Education policies must be the driving force behind economic growth if we are to build a high-tech high-wage economy.

APPENDIX 2

UPDATE REPORT FROM THE DEPARTMENT OF ENTERPRISE, TRADE AND INVESTMENT ON THE STRATEGY 2010 RECOMMENDATIONS

UPDATE REPORT FROM THE DEPARTMENT

1 December 2000

I am attaching an update on the position of each of the 62 recommendations. This shows that action and progress has been made in respect of 55 of these, with 6 implemented in full. There are 7 recommendations where no action has taken place.

Care needs to be taken when interpreting this however. Mr Robinson emphasised this point to the ETI Committee on 18 October, in his evidence on behalf of the Department to their Inquiry into Strategy 2010. Economic development is not a box-ticking exercise and the Department does not believe that even if all 62 boxes were ever ticked that the job would be done.

For example good progress has been made on the Information Age Initiative, including the publication in April 2000 of "Leapfrog to the Information Age" which comprised a strategic framework and added 25 actions, now being implemented.

Other similar areas of significant progress and actions are Equality and the wider knowledge based economy including the key areas of skills and education, and innovation.

Please contact me at tel (028) 9052 9415 if you have any queries on the information provided.

ANNE CONATY

EQUALITY AND SOCIAL COHESION

Theme

Action Area

Recommendation

Action/Progress

Equality and Social Cohesion

Locational Policy

1. The cities and towns identified in the DoE's "Shaping Our Future" regional plan should be the main focus for the future location of industry.

[Partially Implemented] DETI liaising closely with DRD. Location of Industry policy will be determined in light of final version of the Regional Development Strategy (expected early 2001).

 

Social Partnership

2. An Economic Development Forum should be established.

[Fully Implemented] EDF established comprising social partners and has met 6 times. Also provided input to Programme for Government and NI Affairs Committee Inward Investment Inquiry.

   

3. A high powered, high quality research body should be established.

[Partially Implemented] Review of sources of economic advice initiated by OFM/DFM.

 

Sustainable Development

4. Businesses should take every opportunity to minimise their environmental impact through measures which will also enhance their competitiveness.

[Partially Implemented] IRTU support programmes underway eg

  • Environmental Audit Support Scheme
  • Environmental Management Support Scheme

KNOWLEDGE BASED ECONOMY

Theme

Action Area

Recommendation

Progress

Knowledge Based Economy

Skills & Education

5. The Dearing report should be speedily and comprehensively implemented.

[Partially Implemented] Series of reforms to be introduced from September 2000. Further action planned.

   

6. Economic development strategy must inform education and training policy and its funding and delivery mechanisms.

[Partially Implemented] Action underway on a range of issues. DETI/DHFETE joint working groups.

   

7. Collaborative clusters of schools, businesses and colleges should be established.

[Partially Implemented] NIBEP business plan launched by the Ministers for DE and DHFETE in September 2000.

   

8. A valued sub-degree level vocational educational programme should be established.

[Partially Implemented] Further FE places introduced in Oct 2000. Other initiatives included in PFG.

   

9. A clearer focus is needed for the Further Education sector.

[Partially Implemented] A range of measures is underway. Further actions in PFG.

   

10. The current system of careers guidance should be enhanced.

[Partially Implemented] Review initiated. Initial report due December 2000.

   

11. Teacher training should include an industry placement module.

[Partially Implemented] To be recommended as an option for teachers within their professional development.

 

Information Age

12. An Information Age Commission should be established.

[Partially Implemented] IAI Strategic Framework and Action Plan launched on 4 April. Good progress against recommendation.

KNOWLEDGE BASED ECONOMY

Theme

Action Area

Recommendation

Progress

Knowledge Based Economy

Innovation

13. There should be a campaign to promote innovation and good design.

[Partially Implemented] IRTU design directorate draft strategy considered by IRTU Board in November 2000.

   

14. Efforts to increase R&D in indigenous firms should be intensified.

[Partially Implemented] IRTU have identified targets.

   

15. University/business links should be enhanced.

[Partially Implemented] University/business links are developing largely through collaboration on pre-competitive research projects, the operation of Centres of Excellence and best practice by universities.

   

16. Businesses should look for opportunities to collaborate on R&D.

[Partially Implemented] As above.

   

17. A separate stream of funding to encourage R&D in universities is needed.

[Partially Implemented] SPUR Programme launched June 2000. Incentive research funding to be allocated for 2000-01.

   

18. Further funding should be allocated to the Teaching Company Scheme.

[Fully Implemented] Expansion underway.

   

19. Consultation is needed about the coverage of future Centres of Excellence.

[Partially Implemented] Scoping study to be undertaken.

   

20. There should be a Northern Ireland equivalent of the "Reach Out" fund.

[Fully Implemented] Funding of £2·2m will be available over the next 4 years.

   

21. The support structures for spin-out companies should be enhanced.

[Partially Implemented] 3 business incubation facilities have been established with 1 other under offer, others under consideration.

KNOWLEDGE BASED ECONOMY

Theme

Action Area

Recommendation

Progress

Knowledge Based Economy

Innovation

22. A programme to promote Northern Ireland as a region associated with quality design is needed.

[Partially Implemented] Design Directorate working on Action Plan with view to implement in 2001.

 

Networking

23. The Northern Ireland Growth Challenge should further develop its sectoral approach to networking.

[Partially Implemented] NIGC action plans under discussion.

   

24. The business bodies should co-operate to increase networking.

[Partially Implemented] NIGC networking report produced. Under discussion with DETI businesses.

KNOWLEDGE BASED ECONOMY

Theme

Action Area

Recommendation

Action/Progress

Enterprise

Celebrating Success

25. The Government should set up a joint working group with the business bodies to consider ways and means of celebrating business success.

[Partially Implemented] Business Alliance considering under Enterprise Insight Initiative.

 

Rebalancing The Incentives Package

26. The existing grant regime for inward investment should be maintained unless and until new measures become available.

[Fully Implemented] Current regime is being maintained.

   

27. Northern Ireland should have a special rate of Corporation Tax for new inward investments over a period of 5 years.

No action yet.

   

28. Selective Financial Assistance should be less readily available to existing firms.

No action yet. Review of SFA being considered under PfG.

   

29. The Assembly should discuss further options for tax incentives with the Chancellor.

[Partially Implemented] March 2000 budget introduced some incentives. Representation made to HMT.

 

Priorities For Financial Support

30. Financial assistance should be prioritised according to characteristics displayed by applicant companies.

No action yet. Review of SFA being considered under PfG.

   

31. A larger share of resources should be devoted to "softer" forms of assistance.

No action yet. Review of SFA being considered under PfG.

 

Private Equity Finance

32. The establishment of a venture capital fund.

[Partially Implemented] Venture Capital in N Ireland to be considered under Ulster Society of Chartered Accountants and North South Trade Body studies.

ENTERPRISE

Theme

Action Area

Recommendation

Action/Progress

Enterprise

Private Equity Finance

33. The development of a Business Angels initiative.

[Partially Implemented] To be considered as part of the Ulster Society of Chartered Accountants and North South Trade Body studies.

 

The Planning System

34. No further out-of-town shopping developments for five years.

No action yet. Being considered as part of the Regional Development Strategy.

   

35. The Assembly should introduce a rates regime which helps to nurture small indigenous retail businesses.

No action yet. Review of Rates underway by DFP.

OUTWARD LOOKING

Theme

Action Area

Recommendation

Progress

OUTWARD LOOKING

Infrastructure Linkages with Other Regions

36. The Belfast-Dublin road route should be developed a matter of priority.

[Partially Implemented] Design contract awarded for Newry/Dundalk Road

   

37. A centralised plan should be established to develop and budget for Strategic Transport Routes on a UK-wide basis.

[Partially Implemented] BIC Sector Study underway.

   

38. Future energy investment decisions should be made in the context of an island of Ireland energy market.

[Partially Implemented] Outcome of gas pipeline proposals for North/West and North/ South expected in early 2001, but dependent on policy decisions by DPE. Outcome of joint NIE/ESB study on further electricity interconnection due in March 2001.

   

39. The machinery for the creation of an island energy market should be established as a matter of priority.

[Partially Implemented] Machinery put in place. Consultancy study announced.

 

European Union

40. There should be a well-resourced, high profile Northern Ireland regional office in Brussels.

[Partially Implemented] Executive committee has agreed to set up an office of the executive in Brussels and work is proceeding on its establishment.

   

41. There should be a Minister with special responsibility for Northern Ireland's interests in Europe.

[Fully Implemented] Under devolution, two Junior Ministers were made responsible.

   

42. A further round of special EU funding, with a particular focus on economic regeneration is necessary to maximise the benefits of peace.

[Fully Implemented] A further round of special EU funding for 2000-2005 was agreed at the Berlin Summit in March 1999. Detailed negotiations underway.

OUTWARD LOOKING

Theme

Action Area

Recommendation

Progress

Outward Looking

Fostering Global Perspectives

43. Programmes such as the Business Education Initiative and Explorers which provide opportunities for students and business people to gain experience and knowledge overseas should be expanded, and new ones developed.

[Partially Implemented] BEI programme to be extended in 2000/01. International Management Programme to be piloted.

   

44. Tailored training courses in self-presentation should be developed and introduced in all schools and colleges.

[Partially Implemented] NIBEP taking forward in conjunction with Industry Matters.

   

45. Foreign language teaching should be extended throughout the education system and the choice of languages available should be widened.

[Partially Implemented] DE awaiting advice from CCEA, expected Autumn 2001. DE commissioned Nuffield Foundation Inquiry into language teaching. Report issued October 2000. Being considered by DE.

   

46. Twinning arrangements with other regions should be developed.

[Partially Implemented] LEDU developing links with other ED agencies in particular Enterprise Ireland.

   

47. Northern Ireland should engage more actively in European, UK and, where appropriate, Republic of Ireland initiatives, in areas such as technology, competitiveness, IT and education and training.

[Partially Implemented] DETI businesses engaging in a number of initiatives, including examining the potential to exploit opportunities under SPD and Peace II.

SELF HELP

Theme

Action Area

Recommendation

Progress

Self Help

Local Economic Development

48. The Assembly should address the future funding and evolution of local economic development as soon as possible.

[Partially Implemented] LEDU's planned Small Business Development Plan to inform wider developments.

   

49. A pilot project to explore methods of rationalising local economic development arrangements should be set up.

[Partially Implemented] LEDU currently producing a Small Business Development Plan.

 

The Rural Economy

50. Deregulation of the bed and breakfast sector of the tourism industry should be considered.

[Partially Implemented] NITB Review report indicated necessity for, and benefits of classification.

   

51. New, technology-driven businesses should be promoted in rural areas.

[Partially Implemented] Minister launched on 31 May, in the Waterfront Hall two new LEDU initiatives aimed at the fast moving, high-tech sector.

   

52. A technology training programme targeted at those working in a rural community should be devised.

[Partially Implemented] Skills Task Force is funding research project to identify needs.

 

Energy Policy

53. An updated energy policy statement should be adopted.

[Partially Implemented] NI/ROI consultancy study to be commissioned leading to report in June 2001.

   

54. Strategic investments may require a public/private partnership justifying public investment.

[Partially Implemented] Action dependent on receipt of private sector proposals.

SELF HELP

Theme

Action Area

Recommendation

Progress

Self Help

 

55. Targets should be set for use of Non-Fossil Fuels for electricity generation, for the achievement of energy efficiency and the use of combined Heat and Power.

[Partially Implemented] Consultation paper on renewables Issued October 2000.

   

56. The recommendations of the Government's Utilities Regulation Review should be fully implemented.

[Partially Implemented] DETI to issue consultation paper in late 2000.

   

57. The revision of the electricity generation contracts should be brought to a speedy conclusion.

[Partially Implemented] Ballylumford contract revised on foot of conversion to CCGT. Discussions on revised Kilroot contract continuing.

   

58. The £40 million fund, held by DED, should be used to buy out generating capacity currently under contract to NIE.

[Partially Implemented] Letter of Agreement signed with NIE and Premier power on 12 October 2000 (Ballylumford). Negotiations continuing between NIE and AES (Kilroot).

 

Structure of Public Sector

59. The public administration arrangements in Northern Ireland should be reviewed urgently.

[Partially Implemented] Being considered by OFM/DFM under PFG.

SELF HELP

Theme

Action Area

Recommendation

Progress

Self Help

DETI Structures

60. The recommendations of the McKie report relating to a sectoral approach and to information sharing should be implemented as soon as practicable.

[Partially Implemented] Phase 1 of Corporate Information Sharing project completed August 2000.

   

61. A new single economic development body should be created.

[Partially Implemented] Consultative document issued, announcement at end of Dec 2000.

 

Public Expenditure Dimension

62. A Northern Ireland Development Fund should be established.

No Action yet

APPENDIX 3

MINUTES OF PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT
LIST OF WITNESSES WHO GAVE ORAL EVIDENCE TO THE COMMITTEE
LIST OF MEMORANDA SUBMITTED - PRINTED
LIST OF MEMORANDA SUBMITTED - UNPRINTED

MINUTES OF PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT
WEDNESDAY 14 MARCH 2001
IN ROOM 144 PARLIAMENT BUILDINGS

Present:
Mr P Doherty (Chairperson)
Mr A Attwood
Mrs A Courtney
Mr D McClarty
Dr D O'Hagan

In attendance:
Mrs C White
Mr J Nesbitt
Miss J Presho
Mr D Donaldson

Apologies: Mr W Clyde
Ms J Morrice
Dr A McDonnell
Mr S Neeson
Mr J Wells

The meeting opened, in private, at 11.35am

1. Report on Strategy 2010 Inquiry

1.1. The Committee carried out the first reading of its draft report on the Strategy 2010 Inquiry. The report was read paragraph by paragraph, and amendments were made and agreed to.

Agreed - that the draft report, as amended, should be read a second time on Thursday 22 March.

The meeting closed at 1.30pm

[EXTRACT]

MINUTES OF PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT
THURSDAY 22 MARCH 2001
IN ROOM 106 PARLIAMENT BUILDINGS

Present:
Mr P Doherty (Chairperson)
Mr S Neeson (Deputy Chairperson)
Mr A Attwood
Mr W Clyde
Dr A McDonnell
Ms J Morrice
Dr D O'Hagan
Mr J Wells

In attendance:
Mrs C White
Mr J Nesbitt
Miss J Presho
Mr D Donaldson

Apologies:
Mrs A Courtney
Mr D Shipley Dalton
Mr D McClarty

The meeting opened, in private, at 10.45am

1. Report on Strategy 2010 Inquiry

1.1. The Committee discussed the comments received from other Committees on parts of the report relating to their remit (Higher and Further Education, Training and Employment, Finance and Personnel, Committee of the Centre, Education, and Regional Development). The Committee also discussed comments made on the draft report by the Assembly's Research Office.

1.2. The second draft of the Committee's report on the Strategy 2010 inquiry was read paragraph by paragraph.

1.3. Executive summary -

Paragraph 1 read, amended and agreed.

Paragraph 2 read and agreed.

Paragraph 3 read, amended and agreed.

Paragraphs 4 - 26 read and agreed.

Paragraph 27 read, amended and agreed.

Paragraphs 28 - 31 read and agreed.

Paragraph 32 read, amended and agreed.

Paragraph 33 read and agreed.

1.4. Recommendations -

Paragraph 1 read, amended and agreed.

Paragraphs 2 and 3 read and agreed.

Paragraph 4 read, amended and agreed.

Paragraph 5 read, amended and agreed.

Paragraph 6 read, amended and agreed.

Paragraphs 7 - 15 read and agreed.

Paragraphs 16 and 17 read, amended and agreed.

Paragraphs 18 - 23 read and agreed

Paragraphs 24 and 25 read, amended and agreed.

Paragraphs 26 - 30 read and agreed.

Paragraph 31 read, amended and agreed.

Paragraph 32 read and agreed to delete.

Paragraphs 33 - 41 read and agreed.

Also agreed - to delete the numbers relating to the paragraphs from this section.

1.5. Section 1 - Paragraphs 1.1 - 1.10 read and agreed.

1.6. Section 2 - Paragraphs 2.1 - 2.26 read and agreed.

1.7. Section 3 - Paragraphs 3.1 - 3.34 read and agreed.

1.8. Section 4 - Paragraphs 4.1 - 4.66 read and agreed.

1.9. Section 5 - Paragraphs 5.1 - 5.5 read and agreed.

Paragraph 5.6 read, amended and agreed.

Paragraphs 5.7 - 5.12 read and agreed.

Paragraphs 5.13 - 5.15 read, amended and agreed.

Paragraphs 5.16 - 5.24 read and agreed.

Paragraphs 5.25 and 5.26 read, amended and agreed.

Paragraphs 5.27 - 5.33 read and agreed.

Paragraphs 5.34 and 5.35 read, amended and agreed.

Paragraphs 5.36 - 5.44 read and agreed.

Paragraph 5.45 read, amended and agreed.

Paragraph 5.46 read and agreed to delete.

Paragraphs 5.47 - 5.59 read and agreed.

1.10. Section 6 - Paragraphs 6.1 - 6.5 read and agreed.

1.11. The Committee agreed -

That the report should be the Second Report of the Enterprise, Trade and Investment Committee to the Assembly and that it should be printed.

That transcripts of all the oral evidence presented, the related written evidence, the Committee's report to the Minister on the restructuring of the economic development agencies, and the report from the Department on the progress made on each of the recommendations in Strategy 2010, should form part of the report.

That a copy of the report (unprinted) should be issued to the Minister on Monday 26 March.

That embargoed copies of the printed report should be issued to all other Ministers.

That a Motion should be tabled in the Business Office for a debate in the House. The terms of the Motion were agreed.

The meeting closed at 12.45pm

[EXTRACT]

LIST OF WITNESSES WHO GAVE ORAL EVIDENCE TO THE COMMITTEE
(THIS EVIDENCE IS PUBLISHED IN VOLUMES 2 & 3 OF THIS REPORT)

Strategy Steering Group (SSG)

Northern Ireland Economic Council (NIEC)

Dr J Bradley

Northern Ireland Committee Irish Congress of Trade Unions (ICTU)

Institute of Directors (IoD)

General Consumer Council for Northern Ireland (GCC)

National Energy Action (NEA)

Office for the Regulation of Electricity & Gas (OFREG)

Northern Ireland Science Park Foundation

Ulster Farmers' Union (UFU)

Northern Ireland Food and Drink Association (NIFDA)

Mr John Simpson OBE

Federation of Small Businesses (FSB)

Northern Ireland Textiles and Apparel Association (NITA)

Northern Ireland Tourist Board (NITB)

Belfast City Council

Derry City Council

UNISON

Northern Ireland Hotels Federation

The Queen's University of Belfast (QUB)

Association of Northern Ireland Colleges (ANIC)

Northern Ireland Business Alliance

Sir George Quigley

Industrial Research & Technology Unit (IRTU)

Local Enterprise Development Unit (LEDU)

University of Ulster (UU)

Moyle District Council

Ulster Society of Chartered Accountants

Ards Borough Council

Equality Commission for Northern Ireland

Falls Community Council

Strabane District Council

McCormick Properties

City Partnership Board

Derry Investment Initiative

Banbridge District Council

Sinn Féin Ireland

National Association of Teachers in Further and Higher Education (NATFHE)

Sainsbury's Supermarkets Limited & Messrs Drivers Jonas

Craigavon Borough Council

Youth Council for Northern Ireland

Eurotrack Ireland

Training and Employment Agency (T&EA)

Industrial Development Board (IDB)

Department of Enterprise, Trade and Investment (DETI)

LIST OF MEMORANDA SUBMITTED TO THE COMMITTEE (PRINTED)
(THIS EVIDENCE IS PUBLISHED IN VOLUMEs 4 & 5 OF THIS REPORT)

Where in any of the following submissions reference is made to graphs, photographs, maps, or extracts from publications which have been omitted, these will be available for viewing by Members in the Assembly Library and by the public in the Committee Office.

Northern Ireland Economic Council (NIEC)

Dr John Bradley

Further submission by Dr John Bradley

Northern Ireland Committee Irish Congress of Trade Unions (ICTU)

Institute of Directors (IoD)

Further submission by Institute of Directors (IoD)

General Consumer Council (GCC)

National Energy Action (NEA)

Office for the Regulation of Electricity & Gas (OFREG)

Northern Ireland Science Park Foundation

Ulster Farmers' Union (UFU)

Further submission by Ulster Farmers' Union (UFU

Northern Ireland Food and Drink Association (NIFDA)

Mr John Simpson

Federation of Small Businesses (FSB)

Northern Ireland Textile & Apparel Association (NITA)

Northern Ireland Tourist Board (NITB)

Belfast City Council

Derry City Council

Unison

Northern Ireland Hotels Federation

The Queen's University of Belfast (QUB)

Association of Northern Ireland Colleges (ANIC)

Northern Ireland Business Alliance

Sir George Quigley

Industrial Research & Technology Unit (IRTU)

Local Enterprise Development Unit (LEDU)

University of Ulster (UU)

Moyle District Council

Ulster Society of Chartered Accountants

Ards Borough Council

Further submission by Ards Borough Council

Further submission by Ards Borough Council

Equality Commission for Northern Ireland

Falls Community Council

Strabane District Council

Further submission by Strabane District Council

McCormick Properties

City Partnership Board

Derry Investment Initiative

Banbridge District Council

Sinn Féin Ireland

National Association of Teachers in Further & Higher Education (NATFHE)

Sainsbury's Supermarkets Limited & Messrs Drivers Jonas

Craigavon Borough Council

Youth Council for Northern Ireland

Eurotrack Ireland

Training & Employment Agency (T&EA)

Industrial Development Board (IDB)

Further submission from the Industrial Development Board (IDB)

Department of Enterprise, Trade and Investment (DETI)

LIST OF MEMORANDA SUBMITTED TO THE COMMITTEE (UNPRINTED)

Lisburn Borough Council

Ballymoney District Council

Valuation & Lands Agency

Coolkeeragh Power Ltd

Group 22

West Belfast Economic Forum

Newry and Mourne District Council

Livestock and Meat Commission

Department of Culture, Arts and Leisure

Newtownabbey Borough Council

Ligoniel Community Enterprises Ltd

North Down Borough Council

The Northern Ireland Independent Retail Association

The papers listed above were submitted to the Committee but have not been printed. They may, however, be inspected by Members in the Assembly library and by the public in the Enterprise, Trade and Investment Committee office, by prior arrangement with the Committee Clerk, during normal working hours. (Tel: (028) 9052 1230).