Subgroup on the Economic Challenges Thursday 27 July 2006 Members in attendance for all or part of proceedings: Witnesses: The subgroup met at 10.04 am. (The Chairman (Mr Wells) in the Chair.) The Chairman (Mr Wells): Ladies and gentlemen, we shall proceed. Mr Ford will not be here, but he is happy for us to proceed in his absence. Mr Neeson may attend — I am sorry; he is here already. I am so used to the Alliance Party being at the top of the table in the Committee on the Preparation for Government. We have received apologies from Dr Birnie, for whom Mr Roy Beggs is deputising. Ian Paisley Jnr and Peter Weir are not here, but Mr Simpson and Lord Morrow are very able substitutes. Apart from Mr Ford, who will not be here, are there any other apologies? Is Dr McDonnell expected? Ms Ritchie: He is probably looking after four babies at the moment. Mr McLaughlin: He is a busy man. The Chairman (Mr Wells): There are no other apologies. On a serious note, at the last meeting we recorded the sad death of Cathie White’s mother. I must report that, very sadly, within a few days her father died. Cathie is going through an extremely difficult time. We suspect that because of this very sad situation Cathie may not be with us for some time. Members had already signed a condolence card for her mother. I want to tell members of the Committee that the funeral of Cathie’s father is at 9.30 am on Saturday at Roselawn, in case any members are available to attend. I wish to report one issue that arose from the Committee on the Preparation for Government. The Committee decided that the Subgroup on the Economic Challenges facing Northern Ireland would have five Chairmen, including Mr Molloy and me and will inform the Secretary of State that there will also be Chairmen from the Ulster Unionist Party, the SDLP and the Alliance Party. The Secretary of State will contact those parties shortly to seek nominations. Therefore the subgroup’s meetings will have a rotating chairmanship and I will be chairing only one meeting in five. The Preparation for Government (PFG) Committee will meet more regularly and Mr Molloy and I will be spending every Monday, Wednesday and Friday chairing the extra meetings. I hope that members have seen the draft minutes of the meeting of 25 July that were circulated in their packs. Do members wish to make additions or corrections? Mr Simpson: Is it in order that, under item 4, “Declaration of interests”, I declare business interests? The Chairman (Mr Wells): Yes. You raise an important point, Mr Simpson. This will be a moveable feast, as members deputise for one another on the subgroup. The nature of the subgroup means that members who have business interests should declare them. Can you inform the Committee Clerk of those interests? Mr Simpson: Yes, of course. The Committee Clerk: The standard practice is for a member to declare business interests at a Committee meeting. Mr Simpson: They are general business interests; perhaps I can deal with them afterwards. The Committee Clerk: That is fine. The Chairman (Mr Wells): Do members who were not at the previous meeting have any pecuniary interests to declare? I must remind members of the vexed issue of mobile phones, although this is a case of the cat calling the kettle black — we are all wedded to our mobile phones. However, mobile phones cause great problems for Hansard; even switching one on causes problems in the recording. I texted the hon Member for East Londonderry in Westminster the other day and he texted me back. Even in higher places, Members are wedded to their mobile phones. We are no different. Unfortunately, I am going to have to ask members to switch off their mobile phones because we will be taking evidence. At the PFG Committee the compromise is that members can set their phones well back from the microphones so that they do not interfere with recording, but they can still receive messages. However, in this room the Hansard folk are most insistent that the phones be turned off completely. Mr McNarry: Chairman, I would like to raise a separate issue, which I mentioned at the PFG Committee yesterday. Although I welcome the initiative that the Secretary of State has shown in setting up a group to deal with industrial rating — or, hopefully, derating — the news came as quite a surprise. It would be appropriate if the Secretary of State were to notify us of his intentions in advance; he might well be working on other schemes with other groups. In this instance, we would particularly like to hear from the industrial derating group. Yesterday the PFG Committee generally supported my view that we should know whether issues outside the scope of this subgroup were being explored. Does the subgroup support the view that we should find out from the Secretary of State if he is on any “Lone Ranger” missions with other people, perhaps telling them things that he is not divulging to us? The Chairman (Mr Wells): Are members content that we write to the Secretary of State seeking advance notice of any initiative that might cut across what we are doing? Mr McNarry: I think we should. The Chairman (Mr Wells): There was unanimity on this at the PFG Committee yesterday. Is that agreed? Members indicated assent. The Chairman (Mr Wells): The Clerk will look after that. Members have received the draft Hansard report of the hearings on 25 July. As you know, the turnaround is now 24 hours. The Clerks did not receive any amendments and corrections, so it is taken that members are content with the proceedings. The report will then be published. Mr McNarry: I did not receive a report, and I was told to expect it today. Perhaps it is in this pack? The Committee Clerk: The report is of the meeting on 20 July, not of the last meeting. The Chairman (Mr Wells): Did I say 25 July? I meant 20 July, sorry. The Committee Clerk: That was handed out to Members at the last meeting. Mr McNarry: The meeting on 20 July? I have received that. Lord Morrow: Mr Deputy Speaker, on a similar issue, we seem to have a system in place whereby minutes, marked with members’ names, are being left in parties’ general offices for members to pick up. That is most unsatisfactory. I am not saying that it has happened here, but I hope that it does not start to happen because members are not getting minutes until 10 minutes before they arrive for the meeting. The Committee Clerk: The subgroup is working to a very quick turnaround, and we only receive evidence papers and submissions the evening before, if at all. We are pressing witnesses to send them quicker than that, but we must appreciate the difficulties that arise when witnesses are contacted at such short notice. It would be helpful if members could give us an e-mail address that they are certain they can access the night before the meeting, to which we can send the relevant papers. We tried to contact quite a few members last night, by e-mail and mobile phone, in an attempt to send the papers out last night. Could members ensure that they give Paul Stitt their e-mail addresses before leaving today? As soon as we get any papers we will send them out. We will also have a hard copy ready when you arrive at the meeting. Mr McNarry: Excuse me, Chairman, I am going back to Hansard. Where is the report? The Chairman (Mr Wells): You should have the report of 20 July; the report of 25 July is in preparation. The Committee Clerk: I understand that the report of 25 July is virtually done. It was a four-hour session, so I appreciate that it is going to take Hansard a day or two to complete it, and we are waiting on that. Mr McNarry: I do not want to be hard on anybody, but I am not really satisfied with Hansard’s performance on these matters. It is impossible. The Chairman (Mr Wells): To be fair to Hansard, you must realise that it is covering the meetings of the PFG Committee as well. Mr McNarry: Hansard is here to serve this Assembly. If the Assembly were in operation, it would not tolerate such a delay. The Chairman (Mr Wells): I should advise you that the Hansard staff has been run down substantially during the three years that we have not had devolution, so it is not in a position to give a full-time service. MLAs do not answer their phones 24 hours a day, and various attempts were made to ring members on their mobiles last night, and to e-mail papers to their home email addresses. Margaret was the only member on 24-hour duty. Ms Ritchie: It is very sad. The Chairman (Mr Wells): We need to have a means of contacting members by mobile telephone or of e-mailing documents to you at home so that you can access them that night. The timetable for this subgroup is so tight that we must give you material at short notice. That is the nature of the beast. My mobile is on 24 hours a day. Mr McNarry: I understand that, Chairman, but that is a separate issue. I got a telephone call at 7.00 pm or 6.50 pm, which was good, for at least someone was working. However, I am talking about Hansard. Lord Morrow: Even if you are not, David. [Laughter.] Mr McNarry: I could not really watch the football. The Committee Clerk: Hansard would appreciate it if the subgroup were to lend weight to calls for additional resources for it. Many Hansard staff were redeployed and those who remain are working flat out. We are pressing them, but we appreciate their difficulties. However, Mr McNarry made a useful point. Mr McNarry: The PFG Committee decided yesterday to have three more meetings that Hansard will record in addition to this. That makes four separate meetings each week to keep up the pace. Minutes are minutes and that is that. 10.15 am The Chairman (Mr Wells): Mr Burrowes would appreciate additional staff, but he could not have predicted this workload — there will be meetings every day from now on. The PFG Committee meets on Monday, Wednesday and Friday; the economic challenges subgroup meets on Tuesday and Thursday. That has cranked up the work required of Hansard, and I am sure that the Committee Clerk would be happy to write to the Clerk of the Northern Ireland Assembly to ask whether he can deploy more staff to Hansard. Parliamentary reporting is specialist work; you cannot simply drag people off the streets to do it. Mr McNarry: I understand that. It is because it is specialist that it is so important. I have said all that I need to say. The Chairman (Mr Wells): I welcome Dr McDonnell. Members will receive the Hansard report of 25 July shortly. As to matters arising, the subgroup wrote to the Economic Development Forum, asking it to give evidence. Initially the forum indicated that, since it had multiple membership, many of those groups would be giving evidence in their own right, so it wished not to give evidence. We have written to the forum again to prevail upon it, and I understand from the Committee Clerk that we may receive a favourable response this time. The Committee Clerk: I spoke to officials yesterday and was informed that the Economic Development Forum will now be more inclined to give evidence. However, it is a disparate group and does not necessarily speak with one voice. The issue is timing. We have filled up all the slots between now and 10 August. An evidence session with the forum would be on the agenda, but the PFG Committee has agreed that the subgroup can make an interim report and, subject to approval from the PFG Committee, could work beyond 18 August. Since the Minister is not available until September anyway, we could, if we agree to work beyond 18 August and produce an interim report, invite the Economic Development Forum and the Minister in early September. I have drafted a letter for consideration; it is in the members’ pack at tab 2. We do not have a slot for the forum, unless the subgroup want to meet on another day. The forum would have to pull together different chairpersons. We are seeing them as individuals anyway; but if the subgroup is of a mind to see the forum, I am sure that it will agree. However, it would be late August at the earliest. As the Minister is also the Chairperson of the forum, it might be sensible to invite her, both as Minister of the three Departments to which you want to speak and as Chairperson of the Economic Development Forum. Mr McNarry: I would like clarification. Meeting number five is with the Department of Education followed by the Department for Employment and Learning. Will a Minister be attending? The Committee Clerk: The Minister is Maria Eagle MP. She is on leave until September, so she will not be available at that stage, but she will be available and willing to attend when she returns from leave. Mr McNarry: She is on leave. The Chairman (Mr Wells): Yes, for all of August. Mr McNarry: This is a direct rule Minister. The Chairman (Mr Wells): All MPs are on leave until the end of August. Mr McNarry: Brilliant. But we are not on leave. Ms Gildernew: Not all MPs are on leave. Dr McDonnell: There is a message there. Mr McNarry: We are not on leave. We have been charged by the Secretary of State to get this work done, and we want to hear from one of his direct rule Ministers. Does that mean that she is relieved of duty office? Who is the duty Minister? The Chairman (Mr Wells): There will, of course, be a duty Minister throughout that time, but Ms Eagle will be on holiday. She will not be here. She is not available. You will soon realise that only MLAs work in August. Mr McNarry: Well perhaps the world should know that. Dr McDonnell: It could be worse, Mr Chairman. Margaret Beckett is monitoring the war in the Middle East from a caravan. The Chairman (Mr Wells): And John Prescott is in charge of the country. [Laughter.] Dr McDonnell: Margaret Beckett was interviewed last night in a caravan somewhere in the south of France. Mr McNarry: It seems too convenient that this is the excuse. The Chairman (Mr Wells): We do not have the power to summon her. If she is not available there is nothing we can do. Mr McNarry: Where does that leave us? We have a duty to report back to the PFG Committee. The Secretary of State has set a date for the submission of a report, but it will be incomplete because we have been unable to have a Minister here. At the first meeting, it was everybody’s view that we would leave the Ministers to the end so that we could hear all the evidence. Ian Paisley Jnr made the point that we could then put to the Ministers what we had gleaned from witnesses, ask the Minister what he or she made of it, and see whether there were any new ideas that we could put to the Minister. The Chairman (Mr Wells): The permanent secretary, who is the spokesman for the Department, will be available. The Department will therefore be present in strength, as it were, in the hearings. Mr Beggs: Has it been confirmed that it would be the permanent secretary at least who would give initial evidence from the Department, and not a deputy? The permanent secretaries are also on leave. The Committee Clerk: The letters of invitation for each Department are going to the permanent secretaries. Generally they would send whoever is best placed to answer the subgroup’s questions. If the subgroup would like the permanent secretaries specifically to attend, we can make that point. Lord Morrow: We should include this letter along with the one that we are sending to the Secretary of State. We have been told that the Secretary of State has a service in place for the subgroup while his Ministers are on holiday. Has he made arrangements for deputies? Perhaps he himself would condescend to appear? Mr Neeson: He is down in Sligo. Lord Morrow: Well, he can fly back up on his chartered plane. Mr Neeson: He is rallying somewhere. Mr McLaughlin: There is a constant dissatisfaction in dealing with direct rule Ministers anyway, because they tend to fly in for limited times, and depend heavily on briefings. If we pressed the point, we might well get a duty Minister, which would not improve the quality of evidence that we would have to consider. We should record our dissatisfaction with the amount of support given at ministerial level to the work of the subgroup. However, we should proceed nevertheless and ensure that we get the best possible advice from the senior civil service. Ms Ritchie: The Secretary of State charged us with a programme of work over the “summer holiday” period. Like Mr McNarry, I fail to understand how the Secretary of State expects us to work and take evidence on economic challenges if his Ministers cannot be made available. He has created obstacles, yet he has levelled that accusation at our door. Members must record their dissatisfaction with the process, particularly when we have a deadline of 18 August, and the Minister will not be available until after that date. That is unsatisfactory, and a permanent secretary or someone deputising for a permanent secretary is insufficient, because they simply implement the policy decisions of Government. Mr McNarry: Cathie White reported to the subgroup that she had diligently made preparations for meetings in advance of our first meeting, and that was useful. She produced a work programme, in which dates were given for the Ministers to attend. Do I assume, therefore, that she had already contacted the Ministers’ office and they were available on that date? If so, perhaps we could reconsider that date if it is the only opportunity for a Minister to attend. Members revised that date, because Ian Paisley Jnr suggested that the subgroup should meet the Minister after we had heard all the evidence from witnesses. It seems as though there is some type of engineering going on, and a Minister will only be available when the subgroup is not meeting. Ms Gildernew: I do not have the original work programme at hand, but my understanding is that the dates given were for this week, which suggests that the Ministers may have been available this week. However, they may have made plans to go on holiday, and that is why they were only available for Tuesday’s meeting. The subgroup had decided that we would wait until the end of all the evidence sessions before meeting the Ministers. Mr McNarry: Michelle may be right, but it is unfortunate that it was not understood that the Minister was only available this week. The Committee Clerk: That is my understanding, following conversations with officials in the past couple of days. Mr Simpson: Is it a case of requesting that a duty Minister attend the meetings to cover for other Ministers? If the duty Minister needs to bring officials from the relevant Departments, that is fine. Surely a duty Minister would cover this meeting if they were covering other duties. The Chairman (Mr Wells): It could be a Minister for security or education who may not know anything about the subject and who may simply say that they will refer it to the relevant Minister or Department. Mr Simpson: The same will probably apply to the permanent secretary. Dr McDonnell: We should get on with the business and ask for the Minister to attend as soon as she returns, even if that entails delaying the report by a few days. Mr Simpson: Does the member wish to delay the report until after 24 August? Dr McDonnell: If necessary. The Chairman (Mr Wells): Do members agree that we write to the Secretary of State indicating our displeasure with the way in which we are being treated in this respect? Mr Beggs: Members cannot express their displeasure, as they changed the date that had been agreed, and Ministers will have agreed a schedule to take time off. We ought to request an alternative date as soon as they return. The Chairman (Mr Wells): Are members happy with that? Members indicated assent. The Chairman (Mr Wells): Members have received a revised work programme of suggestions for witnesses. The letters for the evidence session on 7 August are ready for signature, and, yesterday, I signed letters to those witnesses whom we previously agreed. Does anyone have any comments? 10.30 am Dr McDonnell: Who will be attending on 8 August? The Chairman (Mr Wells): We keep updating the work plan. The Committee Clerk: Sir George Quigley will represent the Industrial Task Force. The Chairman (Mr Wells): I signed a letter to him yesterday. The Committee Clerk: We got the Chairman to sign the letters for next week to get that secured. The following week’s schedule has been secured, but we wanted to give members some flexibility in case it needed to be changed. The list is on the updated work plan. The letters are ready for the Chairman’s signature at the end of the meeting. If members are content, we will carry on with that. We also have letters ready for the Chairman’s signature for those who will provide oral evidence, and they will also be sent out today. We will proceed with the programme and the witness sessions if members are content. We could not involve everyone because there are not enough slots. At the last meeting we agreed on 15 or 16 oral evidence sessions. To get more in we have had four on one or two occasions, and we may restrict that to 45 minutes if members are content — otherwise we would be sitting for hours. If the subgroup works beyond 18 August it would be able to invite the Minister, the forum and perhaps some additional witnesses. Mr McLaughlin: Could we adjourn the Tuesday meeting to the Thursday meeting so that we could go straight into the evidence sessions on Thursday? We spend half an hour or three quarters of an hour reviewing the minutes. We could have one set of minutes for that week and simply adjourn the earlier meeting, and that would give us extra time. The Chairman (Mr Wells): Do members have a view on that? Dr McDonnell: I agree with Mitchel McLaughlin. We should concentrate as much as possible on obtaining evidence. The Committee Clerk: Mr Chairman, the subgroup will still have to go through the minutes of proceedings, but it depends on how quickly that can be done. It could be done in five minutes or it could take half an hour. If it is done in five minutes, the subgroup could go straight into the evidence session. There will be one or two items of business arising from the previous meeting that will have to be dealt with. The Chairman (Mr Wells): Is everyone happy? Members indicated assent. The Chairman (Mr Wells): I take it that we are happy with the programme that has been laid out. We have a good mixture of private and public sector witnesses, and after hearing their evidence we should have a fair idea of the challenges that we face. We will now move to the evidence session. There will be an opportunity at the end of the meeting to bring together any issues that arise. I must leave the meeting at 1.00 pm. I see that Mr Molloy is not in his usual position, so you will have no Chairman after 1.00 pm. However, I hope that we can get through the two sessions before then. Lord Morrow: Is that a threat or a promise? The Chairman (Mr Wells): It is probably a promise, but I have a delayed tribunal that I cannot get out of. Dr McDonnell: If we cannot get the business done by 1.00 pm, we should not be here. Through no fault of my own I have missed a couple of meetings, but Chairman, how do I manage to restrain the Lord Morrow? He has lost the run of himself since he was ennobled. The Chairman (Mr Wells): He is controlled. Dr McDonnell: It would be useful to have even a brief session on the new technology, as it has a cutting edge for the economy and may be a specific niche or sector. That is a suggestion, not a demand. An opportunity may arise or a slot may be cancelled. The Chairman (Mr Wells): Dr McDonnell raised this at the PFG Committee, and I remember promising him that if I were in the Chair I would allow the matter to be raised. Have we any slots, or is there any way that we can fit that in? The Committee Clerk: That depends on how long you want to meet for. If the subgroup wants to have longer meetings or to meet for an additional day, Committee staff can fit in anyone. Agreeing to meet beyond 18 August would give you many more opportunities. Dr McDonnell: It may be useful for people such as Hugh Cormican, Bro McFerran and Brian Keating to give us a short briefing, for half an hour or so, on new technology because that is where the future of our economy lies. I have no difficulty with a good deal of what we are due to hear, but much of it is from a managerial, theoretical or philosophical perspective. I want to hear from someone who has been part of the economic revolution in the last 10 years. I leave that as a suggestion, not a demand. Ms Gildernew: I am disappointed. I had not realised that the Northern Ireland Council for Voluntary Action (NICVA) had slipped off the work programme. It was on the first and a number of subsequent work programmes, but I wonder why I do not see it now. The Committee Clerk: It is simply a matter of there being insufficient slots for the amount of witnesses. We have held off writing letters to the witnesses required for the last week so that things can be changed around. I want to leave the subgroup with that flexibility. Ms Gildernew: Given the work that NICVA does, the extent to which our economy greatly affects the voluntary and community sectors and the amount of employment within those sectors across the North, it is important that NICVA be retained to give evidence to this Committee. The Chairman (Mr Wells): It seems clear that as the evidence proceeds, we may have to create one additional session to bring in one or two more bodies. Is it worth setting aside one day for Alasdair’s high-tech representatives, NICVA and anyone else whom we feel is appropriate? Mr Beggs: We must prioritise whom we bring in under this heading. The enterprise agencies are not represented here. Will someone explain how NICVA is a priority? The Chairman (Mr Wells): You are talking about the social economy, and NICVA represents thousands of employees. Mr Beggs: Many different organisations represent thousands of employees. We have to prioritise. Mr Simpson: We must draw a line somewhere. The Committee Clerk: There are two options. At the moment most slots are scheduled to last for one hour. By reducing those to 45 minutes, you could hear from four witnesses at every session and certainly fit in a witness from a high-tech company and from NICVA into the meetings that are currently scheduled. Alternatively, you could schedule another meeting or meet for longer. That is entirely your choice. Lord Morrow: That would not solve the problem, because once you open the door to bring in NICVA, about 25 others must be brought in. The Committee Clerk: In addition, substitute subgroup members have legitimate reasons for inviting different people, and that presents a difficulty. The subgroup must hear from all witnesses by 18 August. That is why we went ahead and selected some witnesses from your original agreed bunch. However, there is still flexibility and we will certainly accommodate any further witnesses, but that must be decided now. Ms Gildernew: I reiterate that I strongly desire that the social economy be represented. It is hugely important, given its past and present work. If we are talking about numbers of employees, it employs more people than Wrightbus Ltd, for example. It was agreed that Wrightbus Ltd should appear on the work programme as a representative of entrepreneurship. However, surely NICVA is equally, if not more, relevant to the work of this Committee than one particular company. The Chairman (Mr Wells): I will take that as a formal proposal from Ms Gildernew. Do you second that, Mr Beggs? Mr Beggs: No, I am simply saying that Enterprise Northern Ireland, which represents all the enterprise agencies and is responsible for delivering support to the social economy, is a more appropriate witness for this Committee. That is my counter-proposal. Dr McDonnell: Can we allow 45 minutes for each of them and try to work cohesively as best we can? I am happy to meet for an extra hour at some stage to accommodate additional witnesses, because we have different priorities and preferences. I take the point about opening the door, but all these people are players, and we must at least let them through the door and give them an opportunity. Lord Morrow: The most important words that Alasdair used were “all players”. Are we talking about all the players or just some of them? Mr McNarry: Perhaps the Ulster Unionists who are here are at fault — Roy and I did not discuss this, but we should have. The subgroup is going back on decisions that it has already made. We agreed that there had to be a cut-off point. We also said that witnesses could make written submissions. I do not know whether we have requested those submissions yet, but that provision was included to cater for the general “all”. If the consensus — or the majority vote, as it would be — is that we had to invite those groups, I am content. The Chairman (Mr Wells): It is worth pointing out that NICVA were on the original list — Mr McNarry: I have no dispute with that. The Chairman (Mr Wells): That is why it has been raised. I take Mr Beggs’s point, but the local agencies were not on the original list for consideration. However, I can see why you would want to have them there. Mr Neeson: This is not the Assembly Enterprise, Trade and Investment (ETI) Committee. If that Committee were in operation, all players would be taken on board. We must be realistic and recognise our remit and timescale. The Chairman (Mr Wells): I propose that we invite NICVA for a session. This subgroup operates by majority vote, not by consensus. I suggest that we have a wash-up day to bring in those groups that others feel should be here. What is the view on inviting NICVA? Four members are in favour of inviting NICVA, and two are against. The vote is per party, so that is two parties to one, with the Alliance Party abstaining. Members indicated assent. The Chairman (Mr Wells): We will invite NICVA. Ms Ritchie: I am happy to second Mr Beggs’s proposal. Last week when I suggested that we bring some groups to evidence sessions, I was promptly chided for recommending those extra witnesses in light of the time-limited agenda and the need to prioritise work. If I had realised that there would be a change in direction, I would have made the same point as Mr Beggs about the enterprise agencies. I suggest that either we be strict with ourselves, or we examine closely our terms of reference. The Chairman (Mr Wells): The proposal is to invite local enterprise agencies to give evidence. Three parties are in favour; none are against. Members indicated assent. The Chairman (Mr Wells): We will invite them and schedule their sessions into the programme. We have kept our witnesses from the Strategic Investment Board (SIB) waiting. As we gather up our papers, I remind members to ask questions rather than make statements. Although some of what has already appeared will look wonderful in the local press, we are here to elicit information, not to state party policies. I will be quite strict, and you will not get away with saying: “Is it not the case that —?” and then making a statement. Mr Gavaghan — I have not come across that name before — and Mr Spollen, thank you for coming to represent SIB. We appreciate your attending at short notice and supplying material in advance. 10.45 am Gentlemen, you are very welcome. The Clerk has indicated that we would like you to make some opening comments, and then the members will ask questions. We have an hour, so feel free. Mr David Gavaghan (Strategic Investment Board): Thank you very much for giving us the opportunity to make a brief presentation and take questions. I propose to run briefly through our presentation. We recognise that from the subgroup’s perspective there are three areas of focus. The Strategic Investment Board’s focus, as you are aware, is on infrastructure investment, so our presentation is specifically on that. I do not apologise for that, because that is what I am employed to do, but it is worth emphasising that that is why our presentation is as it is. In the overall context, the first question that we all pose about infrastructure in Northern Ireland is this: is it fit for the twenty-first century? To some extent the word “fit” can be taken to mean fit for purpose. I see it slightly differently: if, like me, you struggle to keep fit, often the achievement is in getting fit; keeping fit is another matter. We have a huge challenge with this economy in the twenty-first century. Recently, I have been reading ‘The World is Flat’, and that has reminded me of the extent and significance of the challenges across the globe in the context of Northern Ireland. As you know, our company was established just over three years ago to help address the infrastructure deficit that exists here. We have three specific remits. The first is to draw together a 10-year investment strategy, which was announced by the Secretary of State last December. We drew that together as a first, and we will give evidence during the course of the morning of some of the work that we want to do in the future. There is one point that I would like to emphasise: it is not the SIB’s investment strategy; it is the Minister’s investment strategy, and it is ministerial direction that has determined that strategy. Our second area of activity is the delivery of projects and programmes of investment, and, if you like, that is the lifeblood of the business activity of our company. I will give you an insight into some of the work that we have undertaken in the past three years in that area. The third area is reform, which at the moment is very prevalent in the context of Northern Ireland, and some examples of reform projects include e-HR, Workplace 2010, the corporatisation of the Water Service, as well as simple things like standardising contracts and improving professionalism across the Northern Ireland Civil Service as regards delivery capability. As you all know the investment strategy gives a 10-year view, but what is quite wonderful in the strategy is the extent to which a new step change was visible within the public sector and, more importantly, outside it. The scale of ambition of the 10-year strategy, which has the potential to invest some £16 billion in Northern Ireland’s infrastructure, was a step change for us all. One of the things that is worth emphasising is that in the past year, the first year of the investment strategy, more than £1 billion was invested in Northern Ireland’s infrastructure. So it is happening right here and now. The graph in the slide entitled ‘Key Investment Programmes’, shows the confirmed figures in deep purple and the indicative figures in lighter purple. The key point in showing you this graph is to highlight that the focus of the investment programme is on education, health, transport and the environment. Those are ministerial decisions, and there is a real recognition that those are the same priorities that the devolved Government had set prior to direct-rule Ministers taking over. The direction of the infrastructure and investment programme remains broadly the same. The next slide is crucial because it shows the role that infrastructure plays in the sustainable competitiveness of the economy. Physical infrastructure is only part of the equation in the creation of a sustainable economy. Some European countries have the best infrastructures in the world, but the use of those infrastructures is absolutely critical in defining outcomes. The key issue is the way in which all those elements in the pyramid are synchronised as effectively as possible, the intention being that sustainable enterprise will be the apex, which in Northern Ireland means business and social enterprise. We are undertaking some work to try to couch the second investment strategy in a slightly more thorough context than the first. We are addressing the infrastructure investment in five investment pillars built around networks such as roads, IT, broadband etc. The skills pillar includes primary, secondary and tertiary education, the social pillar includes health and housing, the environment pillar includes water-related issues and waste and the industry pillar concerns the impact that the Government can make in supporting industry and wealth creation. Members may wish to discuss industry issues after our presentation. Three priorities are identified on the slide to the left of the investment pillars. Those cross-cutting themes focus on the three key priorities: economic growth and competitiveness; society based on partnership, inclusion, equality, regional balance and mutual respect; and high-quality environment and sustainable development. That framework has a significant cogency in the context of the pyramid to which I have referred. This is only a framework within which Ministers will determine future outcomes for Northern Ireland. The pie chart shows the current investment strategy for Northern Ireland (ISNI), which was launched in December 2005. It is interesting to see how the networks and the skills are — The Chairman (Mr Wells): May I just interrupt. I am reminded of a snooker game being broadcast in black and white, and the commentator saying that the pink ball is behind the green ball. Your colour presentation is difficult to follow on our black-and-white copies. The staff are printing bigger colour versions that will be much clearer. When you refer to the pink and the green, we do not actually know what you are talking about. Mr Gavaghan: My apologies. The Chairman (Mr Wells): The staff will distribute the colour copies as you are speaking. Mr Gavaghan: Investment in networks represents 18% of total investment under the current ISNI. The current ISNI spend on skills is £3·97 billion. In enterprise terms, network and skills are a key constituency representing 44% of the total current investment programme. We might discuss this issue in more detail when we have the colour versions. The ninth slide shows a table that details the projects with which we have been directly involved. These projects are now financially closed, and the Invest Northern Ireland headquarters and Lisburn City Library are operational. They represent about £350 million of capital investment. I will talk about some projects in a little more detail. The importance of the roads package 1 cannot be emphasised enough. We have all had the experience of driving into and out of Belfast. It is worth noting that that was the first publicly funded bond-financing of an infrastructure project in Northern Ireland. Before my arrival at the SIB, I was involved in the bond-financing of the Moyle interconnector, but that was a private bond-financing for a private purpose, although it later went mutual. Therefore that was the first time that the Northern Ireland public utility sector accessed the capital markets in London. It was also the first time that the European Investment Bank had been involved. That is notable in the context of Northern Ireland embracing the European Union and the European Investment Bank seeing Northern Ireland as a really interesting place to invest in infrastructure, with an important focus on the Trans-European Network structures and systems. The third point, which is fundamental, is the importance of involving local contractors. In the case of roads package 1, two local contractors took an equity stake in the special-purpose company. One of the great successes of that project was the involvement of local contractors in the equity, as well as in the work on the site, together with a world-class contractor with a presence across the globe. The final point is critical: the pricing was as fine as anything in the capital markets, meaning that Northern Ireland is in a competitive place in the global procurement of infrastructure investment. There is no premium attached to doing business in Northern Ireland. The second project was Project Alpha, the clean water project, and it was closed in May. For the Water Service and the Roads Service, the scale of some of the business activity that is now taking place — as Malcolm McKibbin said recently about the launch of roads package 2 — could only have been dreamt of in the past. The significant aspect of that project was the scale of the savings that were achieved, against what had previously been estimated: some 25% and some £50 million of capital savings. Electronic human resource (e-HR) obviously has a high profile, but we believe that that project offers Northern Ireland a significant step forward in creating a more joined-up public sector. People across the rest of the UK are looking at that project very closely. We believe that we have made significant further progress on a broad front. We have had a very active engagement with the supplier market, both here and overseas. They now take the opportunities in Northern Ireland extremely seriously. Recently, one contractor told us that it saw Northern Ireland as a critical element in the focus of its resources in a UK context. As for some of our other activities, we held a very successful infrastructure investment conference in Dundalk, with over 300 people in attendance. That was the first time that the National Development Finance Agency (NDFA) in the South worked together with us to face the outward market. That was a very successful event, and a reception that attracted over 100 key players was held here at Parliament Buildings with the Lord Mayor. That was a good event. We also held a very good event in Derry last year, which we are repeating this autumn. The scale of the work that we are doing to present Northern Ireland both domestically and internationally is bearing dividends. We are a relatively small organisation. Although our staff have grown from 17 people to 27 in the last year and a half, one of the key issues for us was increasing the local representation of the senior advisers. In our last recruitment exercise, five locally based senior people joined the SIB. That is very important. Moving on to what we are doing right now, we are working hard to shape the second ISNI, to which I will return. The invitation to negotiate has been returned by the bidders for the Belfast schools’ project. Last month, there was the announcement of 48 new schools across the Province. Roads package 2 will be at the stage of best and final offer in the autumn. Project Omega is well on schedule for financial close in January 2007, if not before. For Workplace 2010, the invitation to negotiate was issued last month with four very good consortia working alongside local contractors. We also have the launch of the acute hospital programme, with potentially projects totalling £1 billion going to the market in the next year, with the ‘Official Journal of the European Union’ (OJEU) launch of the Enniskillen hospital project earlier this month. We are actively involved in the Titanic signature project, and, the week before last, I went to look at a project in Orlando. We are obviously actively involved in the ‘Maze/Long Kesh Masterplan and Implementation Strategy’. 11.00 am The key reason for sharing the Investment Strategy for Northern Ireland 2 (ISNI 2) development time line with the subgroup is its relevance to today’s discussion and the engagement of a future devolved Government. The middle box at the bottom of slide 13 refers to the review of revenue impact on capital schemes. That is underway but will involve a huge amount of work. Members will obviously be aware of the work on the comprehensive spending review, with the intention that Priorities and Budget will be launched in late 2007. We hope to have a draft of ISNI 2 ready by the middle of next year, and that is important in the context of today’s discussions. We thought that members would like us to discuss where PPPs work and do not work. There is a prevalent view that PPPs may not work, but I will highlight where they do. It is a matter of record from the National Audit Office (NAO) that PPPs achieve a better track record in delivery on time and budget for large infrastructure projects. Fundamentally, PPPs allow teachers to teach, by which I mean that teachers do not have focus on failing infrastructure. The risk is transferred, so teachers can focus on teaching. That principle obviously applies in other areas of infrastructure investment. The fundamental premise behind PPPs, although it does not sometimes happen as well as we would all like, is that there is a much more rigorous approach in respect of project appraisal and consideration of user needs. PPPs allow a real focus on whole-life costs, which allows for the protection of infrastructure that was not hitherto possible, as budgets would be slashed. For instance, the Roads Service is very frustrated that the roads budget is often cut, when it should be protected for long-term, value-for-money propositions. PPPs also provide a focus on proper apportionment of risk between parties. They provide for poor performance to be penalised and give more transparency to the process, which sometimes needs to be considered. I say that in the context of the Scottish Parliament building, which, as you know, started as a £40 million project and ended as a £400 million project. Those areas of transparency are critical for public procurement. In our experience, PPPs do not work for small projects. The current guidance is that PPPs or PFIs should not be considered for projects of less than £20 million. PPPs do not work where users do not understand their needs or where a client is not on top as regards the expertise involved in delivering the project. It was announced last month that development work for 48 schools would be completed under the conventional funding route. That clearly shows that some projects, through the nature of the engagement, are inherently better suited to conventional funding as better value-for-money propositions. SIB was integrally involved in the assessment of those schools and the subsequent decision to choose conventional funding. PPPs do not work where there is poor risk transfer. A good example of that is refurbishment, which is generally not a good transfer of risk from the public sector to the private sector, because of the premium that the private sector will charge. I wanted to share the 5C framework on sustainability, depicted on slide 15, with the subgroup. I am attracted to the framework because it provides a holistic approach to considering infrastructure investment in the context of environmental and sustainability issues. The source is Forum for the Future. Jonathon Porritt, founder and director of that organisation, and a leading proponent of sustainability, included the framework in a recent book. For me, it is an extremely powerful diagram showing the agenda on infrastructure investment. Among the challenges ahead for SIB are capacity and capability to deliver the massive infrastructure investment programme over the next 10 years, in relation to both public-sector capability and capacity — which is obviously our primary focus — and private-sector capability. As members will know, we published a report in February that examined private-sector capacity and capability. It is vital that there is a real sense of confidence-building and that our successes are banked. Regional disparities and social cohesion remain significant issues and challenges for Northern Ireland. I am absolutely convinced that a new model for urban regeneration is needed in Northern Ireland. I have left my most significant point to the end: what will the population of this island be by 2050? The Irish Academy of Engineering report, ‘A Vision of Transport in Ireland in 2050’, estimated that the population of the island of Ireland would be somewhere in the region of eight million people by then. That is a fundamental issue for infrastructure investment. The Chairman (Mr Wells): Thank you, Mr Gavaghan. Your last comments are particularly relevant to the work of the subgroup. We have been given an overview of the work being done by SIB. I remind members of the three main aspects of the subgroup’s terms of reference, which are to consider possible impediments to development; incentives to promote foreign and direct investment; and the peace dividend. Therefore, I hope that members will frame their questions to SIB in such a way as to tease out the necessary information to answer those questions. So far, Mr McNarry and Ms Ritchie have stated that they wish to ask questions. If time allows, Mr Neeson and Mr McLaughlin will ask questions also. Mr McNarry: Given that we are working from black and white copies of the SIB presentation, I am sure that David and Martin will give members black and white answers. Do you envisage that SIB will continue under a devolved Government? Mr Gavaghan: Yes. Mr McNarry: What makes you say that? Mr Gavaghan: The inspiration for and purpose behind SIB came from a devolved Government. Mr McNarry: Page 2 of your presentation refers to schools. I am particularly mindful that it was announced this week that the Department of Education failed to spend £69 million of its allocated budget. To what type of investment does your presentation refer? Is that money separate to the Department’s budget? Mr Gavaghan: No. Mr McNarry: Therefore, the money listed in your presentation is the same amount as would be claimed by the Department. Mr Gavaghan: Correct. Mr McNarry: I concur with your later remarks about helping teachers to teach. How do you feel about the fact that £69 million was not spent and the criticism that schools that require high maintenance have not received it? Mr Gavaghan: I do not have the details to hand. Mr McNarry: You made a pitch, which I agree with, saying that the decks should be cleared for teachers to teach. The education boards have responded to the news that £69 million are still sitting there and have not be used. The money could have been used, in a sense, to help teachers to teach by improving the infrastructure of schools. What is SIB’s view on that? What would you tell the Minister or the Secretary of State? The Chairman (Mr Wells): It is important to realise that SIB is an implementation body — it does not formulate policy. Departmental officials could answer questions on policy issues, but it is unfair to ask Mr Gavaghan to comment on a Government issue. I am entirely in the hands of the subgroup, but I suspect that Mr Gavaghan is constrained by the fact that this is a Government issue. Mr Gavaghan: Yes. The Chairman (Mr Wells): I do not think that Mr Gavaghan is being unhelpful, but members must understand the constraints that SIB is under when giving evidence. When officials from the Department of Finance and Personnel or the Department for Employment and Learning — or whichever is the relevant Department — come before the subgroup, they will be able to answer that question. Mr McNarry: Chairman, as we have discussed in the PFG Committee, I am sure that you are stretching your remit. I acknowledge your point, but you must allow members to ask questions relevant to the final outcome of the subgroup’s work, which is to produce a report based on the information that it has gathered. I pursued that topic because page 4 of the presentation states that 48 new schools were launched last month. Mr Gavaghan said that SIB had influence with the Minister on that development. What was SIB’s involvement in the launch of the 48 new schools? Mr Gavaghan: SIB worked with the Department on the appraisal of the 48 schools. I would probably change the emphasis — I hope that I did not say that SIB had major influence. We helped the Department to appraise the best route to sourcing and building those schools, working with Partnerships UK, which is at the forefront of building schools for the future in GB, particularly England. We worked with the Department on an appraisal; that was our role. Mr McNarry: You have a role with the Department? Mr Gavaghan: Yes. Mr McNarry: Finally, Chairman, this is mostly just knowledge that I seek. Who decides the supported projects that are listed on page 3 of your submission? Mr Gavaghan: We would speak to our Minister, and the Department would speak to its Minister, and the process would be that the two Ministers would agree that we should support those projects. Mr McNarry: Where is the embryo born? The alpha drinking water project had a value of £111 million. Mr Gavaghan: When SIB was originally set up, a number of projects had been identified. We have taken on those projects and moved them forward, and we have added more projects. Mr McNarry: Is there also a think-tank type of role involved? Mr Gavaghan: No. When SIB was created, we were handed a series of projects with a capital value of £1·2 billion, if memory serves. Alpha and omega were two of those projects, as was roads package 1. Obviously, more projects have been added since then. Mr McNarry: Finally, can I take it that the money that is detailed in your submission for projects closed and ongoing is not additional money? Mr Gavaghan: Those projects all come through the departmental budgets. You are correct; it is not additional money. Mr McNarry: So what do you bring to it? Mr Gavaghan: Our skill is to accelerate and review the delivery of projects. For instance, from the time that project alpha was originally estimated to when it was completed, we have been able, working with the Water Service and DRD, to bring it in below the original costs, making a significant saving. Through engagement with the international marketplace, there were six bids. We selected a shortlist of five. Through that competitive process, we were able to refine better terms, working alongside the Water Service and DRD. That is what we bring. Mr McNarry: So, you say — The Chairman (Mr Wells): This has to be your last question. You have had six. Mr McNarry: Thank you, Chairman. You say that SIB is expanding. What is the cost of your operation? Mr Gavaghan: Our operational cost is £4 million per annum. Mr McNarry: What will it be when you have expanded? Mr Gavaghan: We have expanded. That is it. Ms Ritchie: I have three questions on the implementation process. There were suggestions the other day about the selection of contractors by SIB for procurement purposes, so I would like to ask about that. What action does SIB take to support small- and medium-sized businesses in Northern Ireland for procurement purposes? I am talking about Northern Ireland businesses, and then those on an all-island basis. Secondly, you said that urban regeneration was one of the challenges facing our economy, and you suggested that a new model was required. What discussion has the appropriate Department had with you, as an implementation body, about the best model of urban regeneration and its contribution to the economy? Thirdly, with regard to all-island prospects, what further work and planning have been done between you and the Departments responsible for infrastructure — the Department for Regional Development in the North, the National Roads Authority in the South, and the National Finance Agency — to make the Belfast to Dublin road a motorway and not a dual carriageway and to ensure that other areas have strategic routes into such a motorway to increase and develop their economies? I did not sail too close to the wind. 11.15 am The Chairman (Mr Wells): It will look well in next week’s diary. Mr McNarry: You Down people stick together. Mr Gavaghan: We work closely with the Central Procurement Directorate on small- and medium-sized businesses; we have engaged actively with the Central Procurement Directorate and the Construction Employers Federation; and we have engaged with the small- and medium-sized business sector. The NIO report on the pathfinder projects on education identified the scale of the investment programme necessary in education in Northern Ireland. Of course we are subject to European Union rules, but we could adopt a slower, progressive, incremental approach; or a more significant approach that, SIB believes, would result in better value for money and which would engage larger contractors. The industry could introduce efficiencies into the supply chain, and that would help all players to move forward. For instance, we have worked with the Housing Executive on social housing and have found that procurement in supply chains can be improved by working through housing associations. That is being done in all industries to create competitiveness. The other issue, which has been a challenge across the UK and which must be recognised, is that big projects, such as the hospital in Enniskillen, need a significant balance sheet to absorb the risk. Several contractors have taken risks that they could not absorb and have either had to contract severely or have disappeared. There are many challenges, and if there is a feeling among small- and medium-sized businesses that they are not getting a fair share, I am happy to engage in another dialogue with the Central Procurement Directorate and the Construction Employers Federation. However, there are some tensions there, Margaret, that are part of the programme that we face. We work alongside our sponsoring Department on several urban regeneration projects, including the Maze/ Long Kesh site, and we assist Ilex in Derry/Londonderry. More significantly, we know that in Omagh both the Lisanelly and Zanussi sites will be vacated next year, as will sites in Enniskillen and in several other significant locations across the Province. My feeling is that we have not developed a new thought process. In recent years, the English Partnerships model has been used successfully in England. It had a long germination period and has moved into many different guises, but it arose from the closures in the coal industry. SIB is developing an initial paper to examine the various models. It will talk to its sponsor Department and to the Department for Social Development, the Department for Regional Development and a number of other people to ask the Ministers what they would like to do now. In the context of urban regeneration, a report was undertaken recently to examine the role of English cities, and we should consider commissioning a similar report on this island. The urbanisation of cities across the British Isles and the world is a key issue that has a major impact on urban regeneration. To answer the final question, the Roads Service has regular dialogue with the National Roads Authority, and SIB is liaising with the National Development Finance Agency to explore some of the options. I know that the Roads Service will review the key strategic routes and other work soon. As regards whether the north of the border section of the Belfast to Dublin road should be upgraded to motorway status, it is my understanding that the Minister has determined that it will be a very high-quality dual carriageway. That decision has been taken. Obviously, a future Minister — whether direct rule or devolved — may make a different decision. There will be many other opportunities to consider what should be done with regard to the strategic routes, which is one of the reasons why I posed the question of the population on this island. In the report, ‘A Vision of Transport in Ireland in 2050’, the proposition is that there will be four million cars on this island. The Republic of Ireland anticipates that the number of cars there will grow from two million to three million by 2030, which would have a significant impact on roads north of the border. We must address those important issues. Mr McLaughlin: Thank you for your interesting presentation, Mr Gavaghan. Through meeting and working with SIB, I have become familiar with the investment delivery framework graph. I congratulate you on the pace of progress to date. The cross-cutting themes shown in the investment pillars are absolutely appropriate. Given our current circumstances and recent history, the middle cross-cutting theme is of particular significance. How do we measure the outcomes and impacts of projects, both current and completed? Have all Departments and agencies signed off on this paradigm? Mr Gavaghan: I will start with the second question. This is just thinking at the moment; SIB has not approached the Departments and agencies yet. Appendix 3 of the first investment strategy included a paradigm of how the prioritisation worked, and that will have to happen with this, therefore, the answer to your question is no. SIB is trying to find a more rigorous and holistic approach, hence it is going down that route. You asked about outcomes. Martin Spollen has been very much to the forefront of developing the thinking on that issue. Martin worked for SIB as a consultant on the first investment strategy, and, just like the Remington advert, he liked us so much he joined us. I recognise that consultants are often criticised, but Martin was so enamoured by the strategy that he joined SIB. That is a fantastic achievement for us. Mr McLaughlin: It does not affect the quality of your judgement or the work that you have done up to now, does it? [Laughter.] Mr Gavaghan: We have gone into a number of subsets on this. Mr Spollen will describe the background to that. This thought process came from work that Victor Hewitt, Director of the Economic Research Institute of Northern Ireland, helped us with. In Canada they have been looking at national performance for a number of years. They have produced a series of indices in the context of issues that have a strong resonance with Northern Ireland, in terms of the divided nature of the community. We have developed our thought process, picking up on key performance indicators. Each year a report is produced in Canada on outcomes related to the activities of the indicators. We try to identify and track how this might be done in Northern Ireland. Mr Martin Spollen (Strategic Investment Board): The priorities cut across the investment pillars. The experience last time was that Departments are good at generating ideas for investment within their areas of responsibility. Second time around, as we develop ISNI 2, we may find that that list will get even longer; and that capital values of potential investment may have also inflated over the period as schemes are worked on. We need a way of prioritising the projects within each of the investment pillars up to the affordability limits that are set by Ministers for each of the pillars. We have used these three priority themes to see how that might influence investment choices. To the left hand side of a priority — and it is not shown on this graph but we have copies — is a set of sub-priorities that could effectively act as benchmarks or outcome measures, allowing you to go so far on one and then move to the next priority area and invest there to achieve balanced outcomes. It provides a comprehensive framework for investment decision-making. Weightings attached to different priorities will drive through and establish the ranking order. That might change over time as different Ministers have different views on what the relative priorities should be across these three main areas. Mr McLaughlin: It would be useful to have those additional criteria. Mr Neeson: I welcome your statement on the involvement of the European Investment Bank. To what extent is it involved, and to what extent are local investors involved? At our last meeting we spoke about the number of local investors investing outside Northern Ireland. From a purely personal interest, to what extent are you involved in Titanic Quarter and how advanced is that involvement? Mr Gavaghan: The European Investment Bank also participated in Northern Ireland Water Service’s project alpha. We understand from a recent visit that it would like to be involved in a range of our infrastructure investment projects, including the hospital programme and the education programme. Yesterday we had to appear in front of the Department of the Environment’s review of environmental governance committee. One person there asked what role the European Investment Bank plays in assessing environmental issues. It has to look at the environmental impact assessment bar for all European Investment Bank-funded projects. There are a couple of wins there. The European Investment Bank also helps support our Trans-European Network (TEN) programme. Another report, which I have here, identifies where in Northern Ireland we can exploit future infrastructure investment projects under the TEN programme. That is significant. The European Investment Bank is integrally involved in the TEN programme. As to your second question on local investors, I emphasised in relation to both the Water Service’s project alpha and roads package 1 the role that local investors played. There is huge opportunity for more active investment and local engagement in the market. This morning I saw Stephen Quinn, permanent secretary of the Department of Enterprise, Trade and Investment. Social enterprise is a vital area in Northern Ireland. It is a vital UK area, and a vital international phenomenon. Northern Ireland has been one of the leaders in social enterprise, and the investment of that capital is something that we really could take forward. I would be keen to embrace not just business enterprise, but social enterprise and social capital. 11.30 am Our specific involvement in Titanic Quarter is in helping the Department of Enterprise, Trade and Investment on the signature project. We have been engaged in a preliminary assessment that will shortly lead to the appointment of consultants to do a piece of work on what the signature project might or might not be. Titanic Quarter Limited and the Belfast Harbour Commissioners have come up with a second concept, which looks, intuitively, like a world-class attraction. There is a significant cost attached to it, however, and a challenging timescale — we need to have something operational by 2011. We also need to be mindful that, as well as the docks, Titanic Quarter has some magnificent buildings, such as the pump house. We must look at the site in total as well as connecting the Titanic experience with the Olympics. There is much to engage in, and two or three of my colleagues and I are involved in it. Ms Gildernew: Following on from what Margaret Ritchie said, could more be done to encourage the bundling of contracts in order to bring in the SME sector? Could the Federation of Small Businesses (FSB), for example, not have better representation on the board to ensure that SMEs are included in investment packages? Is there any form of policy or strategy for investing in renewable energy? It is a potential source of employment and it would have a positive impact on the environment. Could capital expenditure be made available for projects such as the Ulster Canal? It has not only a cross-border link, but it would connect Coleraine to Limerick through the island’s inland waterways, thus developing tourism in its surrounding area. When you were considering the stadium project, for which the Long Kesh site has been decided, the furthest west you looked was Cookstown. Does the east-west roads infrastructure, particularly the Donegal and Sligo link, create an impediment to the development of the economy in rural areas and west of the Bann? Mr Gavaghan: In relation to your first question and to Margaret Ritchie’s enquiry, we could always do more, and I will go back and engage with the FSB. On the subject of its representation, we are a small board, but certainly one of the people listening will take those views on SMEs to the advisory council, which should have a more active engagement with them. We will definitely follow that up. There are several small family owned and managed contractors in Northern Ireland. I applauded some of those contractors the other day. One particular firm is still family owned, but it is now a significant player on this island and internationally. With the right ambition, small contractors can become medium-sized and then large contractors. That ambition is so crucial. Some of the small contractors need to think big to become big. All of us in Northern Ireland should have that ambition. We launched the biggest ships in the world 100 years ago, and we have businesses that have become world-class players. That must be the ambition. I am absolutely committed to engaging with small contractors, but with this programme, the ambition must be that they build the right structures to become world-class players. Ms Gildernew: Their involvement in larger projects, either as individual companies or as companies collaborating on a project, will also further their capacity to become world-class players. Mr Gavaghan: That is correct. Mr Spollen: We would like to examine how to apply the North West Marketing supplier model more widely across Northern Ireland. SIB is discussing that issue with the Central Procurement Directorate (CPD). We intend to explore it as we develop the ISNI 2 and to consider how, within procurement rules, the package can be more SME-friendly. We must ensure that there is an economic benefit that acts as a multiplier, as well as getting things done for the region. The Chairman (Mr Wells): Three members wish to ask questions, and they will get the opportunity to do that, but, in the interests of balance, I will ask the members to my right to speak first, as they have not had a chance. Ms Gildernew: I did not get answers to a couple of my questions. Mr Gavaghan: I have not answered all Ms Gildernew’s questions. The Chairman (Mr Wells): My apologies. I thought that Mr Gavaghan had finished. Mr Gavaghan: With regard to the third element in the subgroup’s terms of reference, renewable energy is a fundamental requirement. The other day, I was listening to John Browne, the Chief Executive of British Petroleum (BP). We should put a great deal of emphasis and focus on that area, as it is a high priority. In the context of this report by a group of engineers, renewable energy is fundamental. As for the Ulster Canal, it must go through the appropriate Departments to become a project that would go up the priority list and be embraced. We have been considering UK- and British Isles-wide projects on the bases of opportunities for third party income, how much funding is required and the potential for waterfront developments. Finally, I do not have a specific answer to Ms Gildernew’s question on roads infrastructure. However, we probably need to do more work to consider the impact of roads on local economies, not only on strategic routes, but on regional and local routes, North and South, east and west. The Chairman (Mr Wells): To move things on, the next three members will have five minutes each to ask questions and conclude this session. Mr Simpson: Thank you, gentlemen, for your presentation. Mr Gavaghan, when will the 10-year investment policy start and finish? How much input do local councils have in identifying projects? Are they consulted? If there is little consultation, do you envisage greater consultation when the super councils are created, taking into consideration the extra powers that those new councils will have? Mr Gavaghan: The current investment strategy runs from 2005 to 2015. The second investment strategy would be slightly different from the national development plan in the South, where the strategy runs for six years, which will be from 2007 to 2013. We have in our mind’s eye — and it is a by-product of the three-year firm spending under UK Government policy — that the next investment strategy will run from 2008 to 2018, so it will be a rolling 10 years. Mr Simpson: Is it a rolling budget, or is a different budget determined for every period? Mr Gavaghan: The graph for the total investment programme showed the confirmed and the indicative. It will be confirmed for the first three years of the next investment strategy and will be indicative for the period beyond that — the seven years. The indicative is a relative concept. If an investment is undertaken via PPP then that commitment has been made and, therefore, although it may appear to be indicative, it is a firm commitment. That is an interesting issue when it comes to infrastructure and investment. That is why the Republic of Ireland recently decided on a 10-year capital investment programme of €34 billion for its transport structure. It committed €34 billion over 10 years, and that is a significant difference to the approach taken in the UK. It is a difficult issue for the Department for Transport and the Treasury. Different councils engage to different extents on identifying projects. I make myself available when councils want to engage, and I will go to any part of the Province. Some councils are keen to engage on their own dynamic, and others feel that the SIB is not accessible. Perhaps we should revisit how we engage with councils. I have no doubt that having fewer councils will make people look in a much more coherent way at how things come together: for example, requirements for health, education, roads, rail, etc. There will be more coherence in the aggregation of those plans. We will be happy to engage with the councils, but the aggregation goes through the Departments. We are happy to engage at any level — debate and dialogue, looking at how proprieties are set and at what really works at a local level. The Chairman (Mr Wells): Thank you for sticking to the time, Mr Simpson. Dr McDonnell: I will try to stick even closer and maybe even come in under the time. Mr Gavaghan, thank you for your presentation. It was fascinating and I am sorry that we do not have a whole day to listen to the various aspects of the matter and probe some of them. My question falls into two parts and is fairly minor. What do roads package 1 and roads package 2 entail, what is e-HR, what are you investing in agriculture, forestry and fisheries, and where are you looking at waste management? Those are just short, quick questions. Sometimes we get mixed up with the jargon and take a back seat. I presume that the Westlink is roads package 1, but what is in roads package 2? Secondly, the subgroup is charged with defining, in a few weeks, the obstacles and challenges that face the Northern Ireland economy. What should be our top two or three challenges? We have dealt with the detail and infrastructure. Mr Gavaghan: Roads package 1 is the Westlink. Roads package 2 is a series of projects, including the improvement of the road network from the border to Belfast, plus a significant element on the road out of Belfast towards the north-west. I will send you the details. There are about six different road improvement packages that fall into roads package 2, with a total capital value of around £250 million. 11.45 am Electronic human resource enables the provision of human resources to all staff so that they can effectively take control of human resources across the entire NICS. It is a transformational project in that it enables the electronic use of human resources in a way that hitherto has not been achieved in Northern Ireland. The project runs across all 11 Departments. That represents a huge opportunity to consider how efficiencies may also be created in local government. I was asked about agriculture. SIB has no specific involvement in agricultural projects, although from time to time we have had discussions with the Department on the impact of the Nitrates Directive, but that is not a supported project. We have been working with the Department of the Environment and the councils on how to ensure that Northern Ireland complies with the EU directives on waste. We have helped the Department, in co-operation with a consortium that was coalesced through the councils, to consider a programme-delivery service unit with the procurement of the appropriate infrastructure for waste technology in Northern Ireland. Dr McDonnell: What about the bigger question of obstacles? Mr Gavaghan: The SIB has set out several challenges, and we should not underestimate the challenge of our existing task. I am reminded of my grandmother, who would say that if you are going to do a job, do it well. We must ensure that we perform our current task well. That is a huge challenge. If we perform that task well — and we are beginning to make good progress, working with Departments and the public and private sectors — that will build enormous confidence from which we can do so much more. If we do not complete our task well and build a sound base, we will face great challenges later. The fundamental task is to put in place the resources to complete the job that we have ahead of us. One of our great challenges is how to open the economy to the world, and vice versa. There is a huge opportunity, and it is a huge challenge to persuade the world to visit us. I have been here for only two years, and this is a wonderful place. If we can get more people to come here and see how wonderful it is, that will create huge opportunities and we will see enormous change and growth in Northern Ireland. The Chairman (Mr Wells): We have about five minutes left. Lord Morrow is indicating that he wishes to speak on this matter. I think that it is fair enough to give four minutes to Mr Beggs and allow Lord Morrow one question, as we have kept Mr Morrison waiting for quite a long time. Mr Beggs: We have heard about the money that will have to go back to the Treasury — a point that David McNarry raised earlier. Most of that money has been returned because of delays in capital projects. PPPs normally have penalty clauses. Have PPP budgets contributed to the return of that money to the Treasury because of delays in the PPP process? Have the completed SIB projects, such as Invest Northern Ireland headquarters and Lisburn City Library, come in on time and on budget, or have there been any significant additions or oversights? Additions are expensive and that is how contractors make their money. Are you content with the current level of interest from the international marketplace, or is there a need for more competition? In relation to the completed SIB projects that have involved international players, what percentage of the funds do you estimate ends up going to local subcontractors and what percentage of jobs goes to local people? There is little benefit to Northern Ireland if all the jobs are to go outside the region. You give very significant savings of 25% for the Alpha project. What were your expected savings in the public-private partnership project, and do you have an estimate of the savings that SIB has achieved to date? The Chairman (Mr Wells): For completion, Lord Morrow, you may finish off with your question. Lord Morrow: I will accept the crumbs. I know that you did not attribute blame one way or the other for your lack of engagement with local councils, but could you take a more hands-on approach with them? There are to be seven, although that is today’s news; tomorrow’s could be different. That is how things work here. You also said that contractors should be “thinking big”. Contracting in this country for the past 20 years was very difficult, as small companies could not think strategically or big because of the lack of road building and improvements. However, several big schemes are running at the minute, such as the Westlink and the dualling of the A4 from Dungannon to Ballygawley, which is a contract of about £130 million. What role can you play in encouraging contractors to think big? Mr Gavaghan: I do not know the answer to Mr Beggs’s first question. I will find out for him. The Chairman (Mr Wells): You have undertaken to write to us on other issues, so perhaps you could include that. Mr Gavaghan: The Lisburn City Library project was undertaken before my time. However, the Invest Northern Ireland headquarters project was delivered in 30 months from the first OJEU advertisement to the completion of the building. One cannot underestimate that achievement. The contract was done in 18 months, and a local contractor built the headquarters in 12 months. Significant residual risk on the property was passed to the contractor. One of the benefits of the transactions is that whatever additional costs there might have been — and I do not believe that there were any — were passed to the contractor, because it was a fixed-price contract. I take your point that sometimes changes can result in the contractor passing costs back, but we have learned from cases across the whole of the UK about how to be much smarter about procurement, whether conventional or otherwise. I must emphasise that the SIB’s locus is not just PPPs; it is across the whole programme of infrastructure investment in Northern Ireland, whether conventional or PPP. SIB has brought benefits that will bear dividends in future. They include intangibles, which will take time to identify and measure, such as the standardisation of contracts, the acceleration of the process, and ensuring that strict timetables are adhered to. At the moment, we feel that we have done much to engage with local contractors vis-à-vis the international market. I take entirely the point that we can always do more, but please remember that we have finite resources. The accusation is often made against me that I would go to the opening of an envelope. There is a limit to how much one can do. At the moment, we are content, but I do not want to be complacent. You are as good as your last project, so we have to ensure that we are resonating and that we are doing what we say we do on the tin. I am a blow-in, but we have settled here. There are huge opportunities for people to settle in Northern Ireland, and there are also opportunities for local people such as Martin. That is why I emphasised that five of those appointed during our last recruitment drive were local people. It is a win-win situation. A number of international players are setting up offices here, recruiting local people and creating more wealth. They are not taking their money out of Northern Ireland; they are bringing money into Northern Ireland. We need to track that more actively. Returning to my previous point, we have not confirmed our estimated savings. However, if you are asking whether we believe that our contracts have saved Northern Ireland taxpayers more than they have cost them, the answer is yes. The subgroup will obviously want more detail on that, and we will consider that option with our sponsoring Department as time goes on. It should be remembered that the Strategic Investment Board is only three years old. Mr Beggs: Even at this late stage, it would be useful if a figure could be provided. You mentioned that 25% had been saved in one project. It is not necessary to have the whole figure; I would be interested even in a provisional figure. Mr Gavaghan: I take the point on our engagement with local councils. Forgive me, what was the final question? The Chairman (Mr Wells): It was about contractors thinking big. Mr Gavaghan: I am happy to engage with local contractors. However, trade bodies and associations need to represent their members, and engagement should be at an aggregated level. I am more than happy for there to be individual players, but more representation is required. There also needs to be recognition of how supplier models can help. As Martin said, we are keen to find ways of bringing those together — not, perhaps, in a standardised way, but to create more aggregation in order to make an impact. We have been working on the north-west supplier model, which was developed from the Coolkeeragh power plant. We are examining how that model can be developed through engagement with the small and medium-sized sectors, as well as big players. The Chairman (Mr Wells): Thank you, Mr Gavaghan and Mr Spollen. You have answered our questions fully, and we look forward to the additional material that you promised. In fact, you have answered more questions than we predicted, so well done. You are welcome to stay for Mr Morrison’s presentation. I am sure that there is good contact between your two organisations. Owing to time constraints, the presentation will finish at 12.45 pm to allow the subgroup to conduct some private business. Please keep that in mind. You are very welcome, Mr Morrison. The veterans of the Enterprise, Trade and Investment Committee know you very well. I do not know how many times you have sat in that chair. There were different Chairmen then, but I am sure that you recognise some of the faces from those days. Mr Leslie Morrison (Invest Northern Ireland): I do not think that I have met Mr McNarry, but I have met the other members. The Chairman (Mr Wells): You have provided a summary of your views at very short notice. You are aware of the subgroup’s remit and the specific issues that it is considering. I appreciate the fact that your presentation is very focused on the subgroup’s three terms of reference, which is most welcome. You have clearly read our brief carefully and responded accordingly. As with the SIB presentation, you will make a few opening remarks. If members wish to speak, they will indicate to either the Clerks or me. Mr Morrison: Thank you, Mr Chairman. I will introduce Damian McAuley, who is our director of strategic management and planning. Many members already know him. As you said, Chairman, we tried to focus on the subgroup’s terms of reference, and we welcome the opportunity to give our response. We have not prepared anything on what we do, or what we could or should do. Those issues may be teased out in our discussions later on. You asked us to focus on three topics: impediments to the development of the economy; fiscal incentives that might promote foreign direct investment and indigenous investment; and an economic package or peace dividend that, if properly allocated, might contribute to economic regeneration. Some impediments — “impediment” is an interesting word – or weaknesses are inherent to the situation in Northern Ireland. However, all economies have weaknesses, which require large and long-term efforts to turn them around. Some impediments are obstacles that can be removed in the short term, and some weaknesses can become strengths. For instance, the fact that Northern Ireland is a small region can become a strength if we are smart and pull in the same direction. 12.00 noon I could compile a long list on this topic, Chairman, but you have asked us to focus on important matters. We must recognise how small our domestic market is. Gross domestic product (GDP) in Northern Ireland is about £23 billion, which is tiny. Consequently, businesses must grow by selling externally. Long-term wealth will reflect net exports and earnings from overseas. The domestic economy — that is, the economy that sells to domestic consumers — is critical. However, in the long term, our wealth will increase only with net exports and earnings from overseas. Given that that is the challenge, what are our structures? There are many micro-businesses, and we have a microeconomy. Ninety per cent of companies employ fewer than 10 people. Most world economies are dependent on small- and medium-sized (SME) enterprises — however, overseas SMEs would constitute large enterprises in Northern Ireland. Many local companies lack the skills and resources to develop external markets. During the previous evidence session, the word “ambition” was used; local companies often lack ambition. That lack of ambition derives from the fact that the companies are small and there is a deficit of skills and resources. Consequently, Northern Ireland has low innovation levels, which lies at the core of our problem. Innovation is defined as being not only research and development (R&D) — which is a large component — but the ability to develop new products, services and processes. It is a complex subject. The ‘UK Innovation Survey 2005: Northern Ireland Results’ contains some interesting statistics. It states that 56% of enterprises in Northern Ireland are innovation active — that is, they are conducting innovative business. That statistic is similar to the UK as a whole, where the figure is 57%. There is not a huge structural difference between the proportion of companies conducting innovative business, in the way that I have described it, and the rest of the UK. Proportionately, however, slightly fewer companies in Northern Ireland are innovative in product and services development — 21% in Northern Ireland compared to 25% in the rest of the UK. However, process innovation is quite good — 19% in Northern Ireland versus 16% in the rest of the UK. Those statistics are not wildly surprising, given the structure of industry here. Innovation and R & D are carried out by large companies, and most large companies in Northern Ireland are multinationals. Innovation in R&D tends to be centralised fairly close to head offices. Plants must be efficient, so those companies that are involved carry out process innovation. In that context, the structure of our economy tends to drive the relative distribution of process and new product innovation. However, to become much more innovative we need to develop new products and services. We can draw on another important study, on which I shall focus to set the scene. The biggest element, and the easiest to measure, is R&D. As we all know, business R&D spending is low in Northern Ireland, at about 0·5% of GDP. In the UK as a whole, that figure is about 1·2%, and the Republic’s figure is 1·4%. The highest figure among developed countries is that of Japan, which is at about 3·7%. To give members a sense of calibration, the EU wants to get to 3%, and the Republic’s target is 2·5%. It is interesting to note that the last time that it was assessed, roughly 50% of R&D in Northern Ireland came from universities. Our private sector R&D is particularly small, and that accounts for the 0·5% figure. If we were to arrive at a gross total based on both, we would find that the difference between Northern Ireland and the rest of the UK is not that great. The deficit lies in the fact that the private sector does not do nearly enough R&D. Some members may be familiar with Prof Harris’s study for the Centre for Public Policy for Regions (CPPR), which was published in January. He made several comments that are pertinent to this matter and that we could take on board. The fact that Northern Ireland has so few large companies is a big determinant of the amount of R&D. Tiny companies do not have the necessary skills or resources. Sector matters a lot — we are very heavily dominated by food and drink, and, to a lesser extent, paper. Those businesses do not carry out much R&D. They are not hugely profitable, and they do not have the scope to do R&D. That tends to depress the potential. Our absorptive capacity is a big factor. If we were able to get companies to do much more R&D, could they find the researchers? Not necessarily. We are not producing enough scientists, and not nearly enough PhDs, for example. The structural elements must be in place; it is not just a matter of spending money or getting other people to spend money. Finally, Prof Harris said that companies that are supported by public sector funding in Northern Ireland are about 8% more likely to carry out R&D than other companies. In fact, the number of establishments in Northern Ireland that carry out R&D and receive support for it is proportionally about two and a half times higher than the UK average. Prof Harris concludes that if there were not public sector support for R&D, it is likely that private sector R&D spend would be much lower than it is even now. He therefore felt that the importance of public money support for R&D was great. Those are good data points from which to illustrate my broad point on the need for innovation. The consequence of that is that this is a low value added economy. That means that we do not have enough highly productive and very profitable companies. We need those companies to be able to counter the fact that this is no longer a low-cost place, and it never will be. The good news is that if you are low-cost, you are poor, and we are no longer poor. Our economy is probably one of high or medium cost, and that is a challenge. We are clearly not as high-cost as north American cities, or London and Dublin, but we have a heck of a lot higher costs than Poland, not to mention China. At the moment, our economy is one of high-medium cost. Our value added is increasing, but not by enough. That means that our GDP per capita is 80% of the UK average. The largest portion of our value added is composed of salaries. People can pay more if they are making more money. Therefore companies must become more profitable and be able to pay more in order for us to get richer. This is a very big challenge for us that, in my opinion, must be fought over the long-term. Turning to the impediments and what can be worked on, the man from Mars would say that the thing that hits him between the eyes is the very high level of economic inactivity, which is around 27% here compared to 21% in the rest of the UK. That is obviously a big waste of human resources, particularly at a time when the labour market is tight. The unemployment rate is less than 4·5%. Many sectors are finding it quite hard to get labour, which is why more and more immigrants are coming to Northern Ireland. We need to think hard about how to tackle the problem of economic inactivity. Northern Ireland is a small and insular area that is, as I somewhat poetically say in my presentation, “bruised by years of strife”. Cultural hurdles are a big factor. Psychological factors are also big in Northern Ireland, which contributes to a lack of optimism, leads us to be more conservative than necessary and more afraid that we will fail. We are often told that we have a fear of failure in Northern Ireland; much of that comes from the past. Optimism is of paramount importance for economic activity. A study by an academic from Trinity College in Dublin a few years ago suggested that optimism was the single most important element in economic development. I have just returned from north America, where I lived for a long time. The difference in mentality there is tangible; the attitude is: we can do it; we will do it; what is the problem? Northern Ireland must change its entire mentality and develop a can-do mentality. That is easy to say, but hard to do. Skills shortage is an obvious problem. There are areas in which Northern Ireland is short of skills at the highest levels of academic and vocational training. There is a need for better continuous education and retraining. We recognise that, in the modern world, people do not get degrees and forget about them — people must be constantly retrained. The most important thing is to be able to learn rather than to know something. Better facilities and courses for lifelong learning are required. There was a discussion about transport infrastructure earlier. I do not consider that to be a major issue, but the infrastructure still falls short. It is a particular problem in the north and west of the Province where there are insufficient dual carriageways. Good transport networks are especially important for sectors such as the fresh foods industry, which is predominant in Ms Gildernew’s part of the world. Fresh foods must be delivered to England, and delivered quickly. Inferior transport infrastructures constrain some sectors more than others. Planning in Northern Ireland is cumbersome and must improve. Invest Northern Ireland uses the Planning Service, as it owns property that it develops for its clients, and we have the same planning issues as people in the private sector. A way to speed up the planning process must be found. My final point links to the psychological tone of my presentation. The political tone is dispiriting to people in Northern Ireland. Potential overseas investors are fairly neutral; it is important to them that there appears to be no more violence and that there appears to be peace in the streets. However, potential investors are nervous because there does not appear to be particularly holistic cohesive political leadership. That is important for some people but not others; it depends on to whom one talks. You asked me to highlight impediments — I feel that the overall political tone is holding us back, but we can do something about it. Chairman, you asked us to move on to the fiscal incentives that might promote foreign and local investment. You specifically asked about headline corporation tax and tax credits. The question about headline corporation tax is easily answered: it would attract increased and more profitable foreign direct investment (FDI). Multinationals manage their tax bills. They transfer revenues to low tax-rate jurisdictions in order to shelter their taxable earnings. To an extent, the Republic is a tax haven for corporate tax. 12.15 pm That would happen necessarily, because all multinationals — all companies, actually — try to minimise their tax burdens, within the law. Therefore, if the headline tax rate were set low enough, there would be a definite advantage that Northern Ireland could garner. I did not mention the likelihood of that happening or its feasibility. Invest Northern Ireland knows that there are real problems with that, but, since members asked: yes, it would make a big impact. Additionally, there is no question that that would encourage local business formation and the growth of the economy by increasing the return on capital. Assuming that Northern Ireland achieved a rate at parity with the Republic, there would be a dramatic increase in the return on capital, after tax. The effective tax rates are closer than the headline tax rates, but they are not close enough to make up the difference. Northern Ireland business needs to be more innovative. It is important, therefore, for us to recognise that low tax rates would improve the sectoral mix here for the better. By definition, much more profitable businesses, such as pharmaceutical companies, would base themselves here because they could shelter tax, which is good for all kinds of reasons. However, that would not necessarily make Northern Ireland more innovative. In financial terms, operating expenses, such as R&D, would shelter less income in low-tax jurisdictions. Therefore, having a low tax rate would not tend to encourage companies to base more R&D in Northern Ireland. In fact, it would do the opposite. Quite a lot of the foreign investment in Northern Ireland is R&D orientated. That is because the businesses are cost centres that employ people to do R&D. Low taxes do not help this activity, but, on balance, they would help the Northern Ireland economy. Members asked about tax credits for R&D. Of course, they would be helpful. Prof Harris’s study, which was published in January, and that I suggest that members read, deals with that issue. Northern Ireland offers tax credits for R&D. However, Prof Harris’s study addresses higher tax credits. At the minute, tax credits amount to 50% for SMEs and 25% for large companies. Prof Harris has prepared a model that doubles both those amounts to gauge the potential effect. Higher tax credits would not bring transformational change to value added in Northern Ireland, but they would be helpful and would broadly supplement the innovation tool kit. However, they must be allied with grants and expertise, because if many of the small companies in Northern Ireland were given additional money, they would not be able to spend it. They do not have the necessary staff and they do not know the innovation process. They would need help. It is notable that the majority of money spent by Northern Ireland private companies on R&D goes on in-house projects. The interesting thing is that in the rest of the UK and in other larger economies, the majority of R&D is outsourced. Those companies that outsource most of their R&D to universities and think tanks do far more R&D than the companies that keep it in-house. Obviously, outsourcing brings international expertise. Northern Ireland really lacks that same intensity of international expertise because it does not outsource much R&D. I believe that that is because Northern Ireland companies are too small and do not have the ability to absorb that work. That is the circle that we need to work on. I was asked how an economic package or peace dividend might contribute to the situation. I cannot speak about infrastructure because that does not fall within my remit and I think that David Gavaghan referred to a number of those issues. However, Invest Northern Ireland could certainly use a lot more money for its programme budget for innovation and entrepreneurship. There is a limit to what INI could spend because of the absorption capacity issue, but in my view, it could spend significantly more. In my presentation, I referred to sunrise-sector initiatives. By that, I mean a number of sectors, the most obvious of which are healthcare and biotechnology. That is a very long-term hurdle to jump over. It requires more resources than are available. It might be a 10-year effort. One could do more, for example, on clinical diagnostics. Alasdair and I have spoken about that. It would require a lot of money to hire specialist nurses and so on. You can clearly see areas that could use long-term development. Nanotechnology is not really an industrial sector; it is a cross-cutting technology that applies to a lot of sectors — electronics, healthcare, biotech, even textiles and food. We have expertise at the two universities. Seagate is the largest nanotech manufacturing company in the UK. We do not have much, but we have something on which to build. There have been attempts, through the universities and through us, to focus more resources on that, but it is faltering because we do not have enough money. That is an area where we could begin to encourage more manufacturing here, which would be helpful. We would like to see an increase in funding for vocational retraining. This goes back to the point about lifetime learning, mainly through the FE colleges, although the universities are becoming more interested in doing postgraduate degrees that are more adapted to the needs of businesses. There is a sea change in higher education in people’s attitudes towards spending their money in alignment with economic development needs. We could use more money there, and so could they. Although the universities here spend rather more than half of the total R&D expenditure in the Province, they could still profitably spend more — less in the areas of pure research than in knowledge transfer, which is getting better but is still undeveloped at both universities compared to best practice. There are areas of economic potential that we are working on. We have a proof of concept fund, as you know. I wish it were many times bigger — it has been very successful. There are things there that we could spend money on. In relation to the problem of long-term unemployment and economic inactivity, there is a return-to-work credit that is distributed through the Department for Employment and Learning. Enhanced financial measures such as that could encourage people by incentivising them to work rather than take benefits. It is a potential incentive that requires study. I do not know enough about it to be able to make a recommendation, but it seems to be an intelligent thing to consider spending more money on. I have tried to link some thoughts to what we see as the deficits, and to keep the presentation fairly tight. I have probably overstayed my welcome as regards my presentation, but I would be happy to answer any questions. The Chairman (Mr Wells): Thank you, Mr Morrison. We will start with the gentleman to my right, Mr Simpson. If a party colleague is asking a question, feel free to make it a team effort, and perhaps we can get through it by 12.45 pm. Mr Simpson: It is good to see you again, Leslie. At the outset, we have to acknowledge that there is no quick fix for a lot of these issues. We have to be realistic. Have you any up-to-date budget figures for the entrepreneurship programmes? What is budgeted for this year, considering that there has been a cut in the overall budget? To return to something that I raised with the Strategic Investment Board (SIB) earlier — the coming change in local councils — we do not know the budget that will be given to their economic development units. Do you have any indication of what the budget will be in relation to handling local enterprise systems and how that will operate locally? You mentioned the cumbersome detail that Invest Northern Ireland has to go through in relation to planning. If Invest Northern Ireland has a major project of 200,000 sq ft, has it any influence with the Planning Service in order to have it fast-tracked? The Northern Ireland Business Alliance and the Confederation of British Industry have said that 140,000 jobs need to be created over the next 10 years. If everything that you have presented today were put in place, would that be achievable? Mr Morrison: Local business starts are sometimes confounded with entrepreneurship, which, as Mr Simpson and I have discussed in the past, is much broader than that. However, they form part of the picture. The ‘Start a Business’ programme itself had a £4 million budget last year, and it will be held at that as far as the eye can see. That programme is being redesigned and recalibrated and, while it has already become progressively more effective, it will be much more so. We also raise entrepreneurship awareness at enterprise shows and on television and so on. There is approximately £3 million in that budget. The accelerating entrepreneurship strategy says that entrepreneurship is about starts and about making existing businesses grow faster and become more effective. Therefore entrepreneurship gets very bound up with what we do with existing companies. I cannot divide that out; it would be impossible to say what is allocated to entrepreneurship rather than, say, innovation. However, the budget referred to is for trying to frame the business starts part of it, and for raising awareness. Regarding the Review of Public Administration, we have provided a list to our sponsoring Department. Officials there are now talking to the groups sponsored by the Department of the Environment, and we are at a fairly early stage of discussions about what the larger, more empowered councils will do. Damian McAuley has been our liaison officer on that, and we have gone public with the things we believe the council should do on economic development. In broad terms we have said that the regional agency should deal with the companies that are in its remit, namely those that either do, or can, sell externally. Our definition of a client — and it is not a very high hurdle, honestly — is a company that can sell £100,000 a year and that will make 25% of its sales externally within three years. That does not mean that all companies will become clients, but that is the criterion. The councils could administer the ‘Start a Business’ programme. Elements of social entrepreneurship and incubators are the guts of it. That has been public for a while, as you know, and we are moving into the phase of discussing it through the local government task force and getting feedback from the councils and from the Department of the Environment. Do we have a timetable for that, Damian? Mr Damian McAuley (Invest Northern Ireland): The first formal engagement with the task force will be on 1 August, when the Department of Enterprise, Trade and Investment (DETI) will present broad proposals. There will then be an engagement with the task force and feedback, with a view to making an initial report to the political panel on 15 August. The aspiration is that the final report to the political panel will be presented on 15 October. The Chairman (Mr Wells): If an additional member leaves the subgroup we will not have a quorum, so it is important that everyone holds out. Mr Morrison: Correct me if I do not hit the questions that were asked. You asked whether Invest Northern Ireland had any influence with the Planning Service to fast-track large projects. The Planning Service holds us at arm’s length, as though we were a private organisation. As with all human relationships, if you know people and work well with them you can sometimes get problems solved. Of course, the same would be true of the private sector. We have no special position and probably suffer the same frustrations as the private sector. Mr McLaughlin: Sometimes you do not. Mr Morrison: Sometimes things work. The Business Alliance has said that 140,000 jobs must be created over 10 years. My personal view on that statement is “maybe”. It is predicated on a lot of assumptions that must be carefully examined. We had an interdepartmental discussion recently in which I said that that claim carried both plausibility and implausibility. The Government should have a concrete position on the issue, and a macro-economist should be tasked to come up with that. It is very easy to panic about numbers like that. In fact, Invest Northern Ireland’s clients and its ‘Start a Business’ programme have created close to 10,000 jobs, so those figures do not panic me very much. 12.30 pm We must be careful not to extrapolate using past trends. The recent job creation in the tradable services and manufacturing sector by companies from overseas has been in financial services and software development. Six or seven years ago those companies would not have come here; they felt it was too dangerous. However, companies such as Citibank, the Indian companies Polaris and ICICI OneSource are now here, and Northbrook Technology has expanded in Derry and Strabane. That would not have happened six or seven years ago, and we must realise that we are still very unrepresented in those sectors, so that hurdle may not be as scary as it appears. The only question is whether it is really the right number, and my answer is that I am not sure. Ms Ritchie: Gentlemen, you are very welcome. The private sector is Northern Ireland is underperforming. There is a possibility that if resources are put into the private sector some of the public sector could be displaced, and there is a fear that a mobile private sector, with its public sector associations, could leave Northern Ireland and locate elsewhere. What incentives should be given to the private sector to ensure that that does not happen? Secondly, does Invest Northern Ireland see advantages in adopting an all-island approach to attracting substantial investment, with some investors locating one arm of their enterprise or industry — in manufacturing or whatever sector — in the North and another in the South? Mr Morrison: As regards the private sector being mobile, it is, so get used to it. That is life; that is the way it is. Nothing can be done in an open economy to prevent that. We must bear in mind that although domestic, locally owned companies are more sticky — they are here because they are from here and they like it here — they are also becoming increasingly mobile. The only way to prevent that is to make Northern Ireland a very good place to do business, by virtue of cost structure, but more so by virtue of the supply of people. Our greatest asset is a good supply of educated people. Is it a good enough supply? No, it is not. Do we have enough people who are sufficiently skilled and educated? No, we do not. However, we have a relative advantage. Invest Northern Ireland’s contracts with investors include covenants, which are usually tied to commitments to job creation within a certain time period or hitting business targets. If investors do not do the things that they say they will do, we can go after them for the money that we have given them, to the extent that it has not been earned. Thus investors can be contractually tied. However, all capital is mobile, and we must continue to make Northern Ireland a good place for businesses to locate to. We should remember that, for certain industries, this is already a good place to be. Northern Ireland is a world-class near-shore location for service industries because we speak English and have good people, and because of our time zone. It is for those reasons that three large Indian multinationals in the software development and call-centre sector are coming here. People ask me whether that is not risky, but I tell them that those companies already have huge operations in India and are coming here because they need near-shore capability, just as our companies have to go to India for reasons of cheapness. Northern Ireland has attributes that will attract people, both domestic and foreign, but we must struggle to maintain our edge, and no restrictive covenant can be placed on people. There are two factors with regard to the all-island approach: the intra-island trade potential is considerably underdeveloped; and both economies are tiny while the world is massive. Jointly promoting all-island trade makes a lot of sense. In certain sectors, such as food, that is already being done, and it works quite well. Certain countries like to see us as being from the island of Ireland while others do not care. If we are intelligent about promotion and focus it right, we can do well. As to foreign direct investment, a study is underway through the British-Irish Intergovernmental Conference to look at potential benefits. Invest Northern Ireland meets regularly with the Industrial Development Agency and Enterprise Ireland to see what we can do together. We already have a number of initiatives, particularly in the north-west; however, a lot more could be done. The secret of marketing is differentiation. If you say: “Come to Ireland. It does not matter which part of it you come to”, we will lose every time because there is a 12·5% tax rate south of the border. What we need to say is: “Come to Ireland, and the reasons why you would come to Northern Ireland are people, infrastructure and broadband for example”. We need to be selling the differentiation. There are markets, such as the United States, where people like to think you are just from Ireland. We can wear whatever cloak works in whatever market. We are very pragmatic. The question of what co-operation there could be on foreign direct investment on an all-island basis needs to be answered. It is hard to figure out. Issues such as joint-infrastructure are easier: it is about electricity, roads, and such like. We should be doing things that make sense and in areas in which there are economies of scale and benefits. In marketing for investment, it is harder. I hope that I have adequately addressed the question. The Chairman (Mr Wells): Mr Beggs got in at the end last time, so I will ask him to come in early; Ms Gildernew and Mr McLaughlin will then act as a team; then Dr McDonnell can ask his question. Mr McLaughlin: We always act as a team. Mr Beggs: There is nothing I would disagree with in your presentation. You have hit the nail on the head. You said that there is a need for a university system that spends less on pure research and more on knowledge transfer. What has gone wrong? Why do they not see that rather than concentrate on their own little world? You indicated that there are skills shortages and a need for more industrial retraining in our colleges. Why are the needs of the economy being missed by Departments, universities and colleges and how might we best refocus them? I support the view that lower corporation tax would bring benefit, but the need to encourage R&D is more important. I cannot understand why colleges and universities do not have facilities to provide that. What practical assistance could be provided? Might there be a special fund or an R&D facility? How would you see that mechanism working for tomorrow’s companies? Mr Morrison: I probably misled you a little. Universities should not spend less on pure research. Universities here do less blue-sky research than those in either the UK or in the Republic of Ireland. There needs to be more and better knowledge transfer, but universities are learning how to do it. QUBIS Ltd, for example, has been fantastically successful over the years, but it runs on fumes; it used to have £20,000 a year to spend, which is a joke. It is often a question of resources, resources, resources. Dr McDonnell: May I come in on that, Mr Chairman. How do we get money into QUBIS Ltd and UUTech Ltd? If the subgroup does nothing else, at least it could start providing answers to such questions. Mr Morrison: Alasdair, the question is: how do we get money? If we can get money, we can find ways of getting it into bodies such as QUBIS Ltd and UUTech Ltd. That raises several points. The nanotech initiative is a cross-cutting technology that could be up and running if we had the money. We made a bid to the UK for nanotech funding, but we failed. We know how to do it, as do Queen’s University and the University of Ulster. We can see ways of getting money into nanotech. Knowledge transfer is complex, and although universities are learning how to do it better, they will admit that they have a long way to go. It is not just a question of money; it is also a question of research and of figuring out what has economic potential. How can academics, whose main incentive is to write papers, consider economic potential? How do I get people involved who can actually run businesses? Academics, with a few notable exceptions, cannot. We must transfer knowledge from the bowels of the universities to people who are, first of all, venture capitalists who can get businesses started and then move those businesses to people who can run them. It is a complicated process, and nowhere in the world does it work really well — except in Massachusetts and in the Cambridge cluster. We are getting better, but we are well off the pace. You asked how we get more money into research. I would like to see more proof-of-concept money being available. Our proof-of-concept fund has been very successful, although it is limited by EU rules: we had to apply to the EU to be able to use it. However, it is a very small fund. Simple venture capital will not do it. Venture capitalists are commercial investors; they do not want to take enormous risks. They want to invest in things that are proven. The deficit is: pure research; knowledge transfer; and proof-of-concept money. That is the golden rule. If we could funnel more resources into them and get EU approval, we could make a difference. You asked about skills shortages and why there has not been more focus on retraining; however, over the past year or two a great deal of thought has gone into those areas. Certainly in my four years working with the Department for Employment and Learning I have seen a change in focus in that respect. Indeed, the Department had one of its regular liaison meetings yesterday with Invest Northern Ireland. We are working together on several initiatives on training for sectors that are coming here, such as financial services and software development. The vocational side is beginning to pick up speed, but it needs to go faster. It has the same issue: resources. Everything requires money. You asked what we could spend the peace dividend on, if we got one, and that is one of the things into which we could put more resources. The Department for Employment and Learning knows how to do that. How do we help small firms to increase their R&D facilities? Queen’s University and the University of Ulster do some specific outsourced R&D for small companies. There is probably not enough awareness or ambition in small companies to use their engineering departments to respond to enquiries such as: “I have an idea — can you make my product?” or: “My product doesn’t work very well — can you fix it?” They do that, and do it rather well, but they are constrained by resources. If a company of 10 people puts two guys on R&D, it has lost 20% of its workforce. Resources and the use of outside consultants would go quite a long way, as would education. The Chairman (Mr Wells): Thank you. Are you happy enough, Mr Beggs? Mr Beggs: Yes. The Chairman (Mr Wells): We have two groups to go. 12.45 pm Mr McLaughlin: Hello again, gentlemen. You discussed the impediments, and I accept that the points that you raised demonstrate that your task is challenging. We accept Invest Northern Ireland’s remit. The South’s economy is performing strongly, but it is beginning to demonstrate characteristics of overheating, and that has implications for the labour market and for further inward investment. Does that not present both a challenge and an opportunity, when considering impediments? Should we also address the competition between Invest Northern Ireland, Enterprise Ireland and the Industrial Development Agency (IDA)? With regard to your advice on fiscal policy and corporation tax, the Northern Ireland Business Alliance and Invest Northern Ireland point out that the EC Directorate-General for Competition and the Treasury have demonstrated no willingness to go down the road of sub-regional tax regimes. Should we provide a wider range of options for tax credits and perhaps apply them with more creativity, imagination and flexibility? At virtually every meeting that I have with Leslie, he makes the point that tax rates offer incentives that often come close to what is being offered by our competitors. We need a step change. The subgroup could offer coherent advice to the Committee on the Preparation for Government that would reflect a common position. The Northern Ireland Business Alliance saying one thing and Invest Northern Ireland saying another would represent an own goal. How could tax credits make your task easier and assist us in regenerating the economy? Mr Morrison: I will take the last question first. Invest Northern Ireland does not have a different position from the Northern Ireland Business Alliance. Reducing headline tax rates would be of great benefit, but how practical would that be? There are issues in relation to the Treasury. If people put up brass plates here, the UK could lose tax revenues, and that is a major problem. The second problem appears to be EU law. Unless regions are economically and financially independent of their jurisdictions, which they generally are not, regions cannot reduce rates legally. That is why the Republic went from split rates to a rate of 12·5%. I am unsure how practical that would be, but it would have an enormous impact. I know that the Northern Ireland Business Alliance feels that it is better to get as much as possible. That is a tactical question, and I would rather not state an opinion on it. However, it would be helpful to have enhanced R&D tax credits, as well as other tax credits. They will not transform the economy in the way that a low headline corporate tax rate would, because they work differently. To get tax credits, one needs to spend money. When a low tax rate is in place, one does not spend as much money, so one tends to try to optimise taxable earnings by creating profitable companies. However, it does not work that way with tax credits. It is not all bad news, however, because tax credits incentivise innovation. You would probably end up with a more innovative economy, but not necessarily a more profitable one. However, we would hope that profitability would result from that, further down the road. Those measures work differently. The difference lies in how feasible the creation of a profitable economy is, and what tactics should be used to achieve it. Tax credits would not achieve that on their own; they must be allied to a package of grants and expertise. Many small companies find credits hard to understand. The uptake of existing SME tax credits is very low. Many small companies cannot get their heads round it. It is much easier for them to get a grant. Both those weapons should be in the armoury. I absolutely agree about overheating in Dublin: it is a great opportunity — not a challenge. Citibank is here for that reason. It has a large operation in Dublin and a redundant building, and one might ask why it did not expand into it. However, we convinced Citibank to come here, as it would be cheaper in the long run. A medium-sized call centre in the telecom business from the Republic has just opened in Armagh because it was more cost-effective to put it there than in Dublin. We have broadband and all that. We had to fight a battle to get it to come here as opposed to Limerick or somewhere else. Invest Northern Ireland has an office in Dublin, from where it fights for FDI. We have already got some FDI, and we hope to get more. The potential is there because of the overheating. We do not compete with Enterprise Ireland; we are fairly complementary. Enterprise Ireland has responsibility for Irish-owned companies. It is not like our local office network, which deals with small companies. It deals with Irish-owned companies, be they domestic or overseas. We have co-operated on certain programmes, where sometimes they or we have good ones. We accept that we should mutually pinch or use each other’s. Cross-border initiatives can sometimes be fruitful. The IDA and INI have the north-west technology zone, but it is very hard to find other areas on which to co-operate, other than trying to find ways for each organisation to get better, because we are in direct competition. IDA tried very hard to prevent Citibank coming to Northern Ireland — as it should. The question is whether we can collaborate and be more effective. I tried to answer that from Ms Ritchie’s question, but we should be differentiated from IDA or we will lose out. I do not see the synergies in FDI. I can see synergies in areas such as trade, infrastructure and cross-border co-operation. I am not clear whether the border exists for economic purposes. If the main dynamic is travel-to-work areas — people living on one side and working on the other — the border is completely porous. The different currency is not significant, but there are different tax and jurisdictional systems, and all that those involve. It is very porous economically, with people moving back and forth. However, the question is what can be done to stimulate more business in and outside the island. They are both important, but stimulating business outside the island is far more important because the world is a much bigger marketplace. Ms Gildernew: Mr Morrison, you mentioned the external R&D capacity and its likely impact. Could Invest Northern Ireland bring outside R&D companies here to create links and network with the companies, especially in the SME sector? What can Invest Northern Ieland do to ensure that overseas investment will lead to sustainable employment opportunities? We are frustrated with companies coming in, staying for six or seven years and going. Mr Morrison: Companies will develop R&D if there are good people here. That is the bottom line. SAP, the German software evolvement company — which is like the European version of Microsoft — is here, as is Microsoft. SAP came because of Queen’s University’s grid computing capability, which is the next big thing in computing. Grid computing allows unused space on personal computers (PCs) all over the world to be used. It is quite complicated and mathematical. We have world-class expertise in such areas, which is why R&D companies come here. They are not interested in second best. We have had quite a lot of interest in the service sector, although it is more limited in other sectors, such as the biotech sector. The biotech sector in Northern Ireland is focused on people such Allen McClay, Peter Fitzgerald and Paddy Johnston. It would be nice to get a few more. We have expertise, and we want to be able to build on that. Pharma in the Republic depends on tax: it is basically tax-driven. The answer is to focus on a number of small areas in which Northern Ireland has world-class expertise. The 18 centres of excellence that Invest Northern Ireland has set up in its first four years, nine in the universities and nine elsewhere, help to focus on those areas. Northern Ireland has enough, or even too many, such centres now. A region with a population of 1·7 million should not have 30 centres of excellence. Northern Ireland cannot be world class in that many areas, so we need to put more resources into the best centres and ensure that they deliver. Michelle, I have missed one of your questions. What was it? Ms Gildernew: How can overseas investment create sustainable employment? Mr Morrison: The record of companies coming and going is not that bad. Capital is mobile. Recent investment, certainly in the four years that I have been here, has been far more service-sector oriented. Northern Ireland will not attract large new manufacturing investments. There is a chance of attracting niche manufacturing investments in a few areas, such as electronics, in which Northern Ireland is particularly strong, with companies such as Seagate Technology, Caterpillar, NACCO Materials Handling (NI) Ltd, BE Aerospace, which manufactures seats and composites for the aviation industry. We must move up the value curve. Northern Ireland will never be a cheap place. For example, the Indian call-centre company, ICICI OneSource, the most recent of the three Indian service companies to come to Northern Ireland, will create 400 jobs in Belfast and 600 jobs in Derry. The quality of those jobs is OK, but I would not have supported its coming here had Invest Northern Ireland not been convinced that it would move up the value chain and do increasingly more complicated value-added work. The company must do that, because India is cheaper. That type of company builds on existing intellectual, cultural and language skills, and takes advantage of being in this time zone. A company’s decision to come here is not based purely on cost, although being careful with costs is unavoidable. Some of the types of businesses that have come here from overseas are also being developed domestically. A number of domestic companies are becoming increasingly involved in providing professional business and financial services. In the long term, Northern Ireland can compete in those areas and in a few niche manufacturing businesses. Dr McDonnell: Most of the issues that I had intended to raise have been covered, so in the interests of meeting the 1.00 pm deadline, I will ask no further questions. Mr Neeson: My silence is also to facilitate the Chairman’s departure. The Chairman (Mr Wells): You have both earned brownie points that will be stored and used in the future. Thank you, Mr Morrison and Mr McAuley. Your presentation has been most helpful. We have five minutes to deal with three small items. We need to agree the draft press release. The Committee Clerk: The press releases that we have issued thus far have been extremely concise and have said little more than that the subgroup has taken evidence from witnesses. The media always pick up on press releases that contain a few quotes, so I have taken some quotes from the presentations. I will read out the draft, and if the subgroup is content, I will issue it: “The sub-group had its third meeting today in Parliament Buildings, Stormont. The sub-group heard presentations from the Strategic Investment Board and Invest Northern Ireland followed by question and answer sessions. The sub-group agreed that it was important to invite Ministers to present evidence at the earliest opportunity.” It is important that that last sentence is included. It is not controversial. I have cleared the next paragraph with David Gavaghan: “David Gavaghan (SIB) advised the sub-group that Northern Ireland had for the first time used finance from the European Investment Bank to fund the £100m Roads package1. Mr. Gavaghan also advised the sub-group that one of its major projects, the Invest NI HQ had been completed on time in just 30 months using a local contractor. In evidence to the sub-group Leslie Morrison (Invest NI) made a number of recommendations on actions that would make a significant contribution to an economic package, which would have a positive impact on economic regeneration.” The rest of the press release contains the same background information about the setting up of the subgroup, and so forth, as previous press releases. If the subgroup is content, we will issue it. Mr Beggs: Could you add a couple of comments about what was suggested? The Committee Clerk: If you keep in one or two comments, what do you leave out? It might raise certain issues. Those comments will come out in the evidence. The Chairman (Mr Wells): Dr Peter Gilleece, a senior researcher in the Assembly’s Research and Information Directorate, is present, and he has been following the proceedings. We must formally ask, or instruct, Peter to carry out some research on behalf of the subgroup. We must also agree a deadline. The 10 August has been suggested, which has created a few waves of concern, as it is a very tight deadline. The 18 August has also been suggested. However, I do not think that an 18 August deadline will give us enough time to compile the report. 1.00 pm The Committee Clerk: The subgroup has agreed to commission the research on education and skills, but a deadline has not been agreed. Members must decide on a date. It is a practical issue for Peter because he also services the Committee on the Preparation for Government. If members want that research to be included in the report, it will have to be submitted several days in advance. The Chairman (Mr Wells): Can another researcher service the Committee on the Preparation for Government so that Peter can be released? By comparison, the Committee on the Preparation for Government will not require as much research. Are there two researchers? Dr Peter Gilleece: We have already had a conversation about this issue. It would be excellent if I could be released from the Committee on the Preparation for Government so that I could devote my time to this subgroup. The Chairman (Mr Wells): Will that enable you to meet the 10 August deadline? Dr Gilleece: I will do my best. It may help if I could have the weekend after 10 August. The Committee Clerk: Would it help if I wrote to the Head of Research and Library Services, making that request on behalf of the subgroup? Mr Beggs: Would Monday 14 August be a better submission deadline? Dr Gilleece: A deadline of Monday 14 August would help. The Committee Clerk: The subgroup will be taking evidence from many witnesses. If my colleagues and I do not have clarity on the emergent themes, it will be difficult for us to compile a report within the time frame. I strongly recommend that in the next week to 10 days we have a one-hour private session to examine the emergent themes. If you are content, Peter and I can pull those themes together in a paper. We will liaise with you on time frames. Our next meeting is on Tuesday 1 August 2006 at 10.00 am in Room 135. The Chairman (Mr Wells): I will be in the Chair. Adjourned at 1.02 pm. |