Northern Ireland Assembly Flax Flower Logo

Report on the Industrial
Development Bill (NIA Bill 18/00)

SESSION 2001/2002 SECOND REPORT

Ordered by the Committee for Enterprise, Trade and Investment to be printed 3 October 2001

Report: 2/01/R (Committee for Enterprise, Trade and Investment)

COMMITTEE FOR ENTERPRISE, TRADE AND INVESTMENT TOGETHER WITH THE MINUTES OF PROCEEDINGS OF THE COMMITTEE RELATING TO THE REPORT AND THE MINUTES OF EVIDENCE

COMMITTEE FOR ENTERPRISE, TRADE AND INVESTMENT:
MEMBERSHIP AND POWERS

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

The Committee has power:

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

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


*Mr Campbell was replaced by Mr Wells on 3 October 2000.

*Ms Lewsley was replaced by Mrs Courtney on 29 January 2001.

*Mr Shipley Dalton was replaced by Mr Armstrong on 24 September 2001

CONTENTS
Second Report

Report on Industrial Development Bill
Minutes of Proceedings of the Committee relating to the Report
Minutes of Evidence

Appendix

1. Written submissions from the Committee for the Administration of Justice

Report on the Industrial Development Bill
(NIA Bill 18/00)

General

1. The Industrial Development Bill was referred to the Committee for consideration in accordance with Standing Order 31(1) of the Northern Ireland Assembly after completing its Second Stage on 3 July 2001.

2. The Minister of Enterprise, Trade and Investment made the following statement under section 9 of the Northern Ireland Act 1998:

"In my view the Industrial Development Bill would be within the legislative competence of the Northern Ireland Assembly".

3. The prime purpose of the Bill is to establish a single economic development agency, Invest Northern Ireland (INI), as a Non-Departmental Public Body (NDPB). INI will replace the Industrial Development Board (IDB), the Local Enterprise Development Unit (LEDU) and the Industrial Research Development Unit (IRTU). It will also take on the work of the business support activities of DETI and the Northern Ireland Tourist Board (NITB).

Consideration of Bill

4. The Committee met on 26 September 2001 to consider the Bill. The Committee had before it the Industrial Development Bill and the Explanatory and Financial Memorandum to the Bill (NIA Bill 18/00-EFM).

5. Officials from the Department of Enterprise, Trade and Investment appeared before the Committee on 26 September 2001 to answer questions about the provisions contained in the Bill (a transcript of the evidence is included in this Report).

6. The Committee considers that the provisions of the Bill, as introduced, are necessary to establish INI.

8. The Committee considers that no amendments are necessary to the Industrial Development Bill.


PAT DOHERTY MP MLA
Chairperson

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MINUTES OF PROCEEDINGS OF THE COMMITTEE
RELATING TO THE REPORT

WEDNESDAY 26 SEPTEMBER 2001

Present:
Mr P Doherty MP (Chairperson)
Mr S Neeson (Deputy Chairperson)
Mrs A Courtney
Mr D McClarty
 Dr A McDonnell
Dr D O'Hagan

Apologies: Mr B Armstrong
Mr A Attwood
Mr W Clyde
Ms J Morrice
Mr J Wells

In attendance:
Mrs C White (Committee Clerk)
Mr M Anderson (Assistant Committee Clerk)
Mrs J Murdoch (Executive Support)
Miss A Fowler (Administrative Support)
Mr P Johnston (Assembly's Legal Adviser)

In attendance for public evidence session at 11.22am: Mr G McConnell, Mr D McAuley and Mr P Dolaghan (Department of Enterprise, Trade and Investment, DETI).

The meeting reconvened in public at 11.22am.

1. Industrial Development Bill

1.1. Departmental officials gave evidence, in public, to the Committee on the Industrial Development Bill. The officials outlined the reasons for the introduction of the Bill and answered a number of questions put by the Committee on the implications of the Bill in Northern Ireland.

Mr Neeson left the meeting at 11.30am.

1.2. The Committee carried out a detailed clause-by-clause scrutiny of the Industrial Development Bill. The clauses were read along with the related commentary in the Explanatory and Financial Memorandum.

The Long Title was considered.

Agreed - that the Committee is content with the long title as drafted.

Clause 1 was considered.

Agreed - that the Committee is content with the clause 1 as drafted.

Clause 2 was considered.

Agreed - that the Committee is content with the clause 2 as drafted.

Clause 3 was considered.

Agreed - that the Committee is content with the clause 3 as drafted.

Clause 4 was considered.

Agreed - that the Committee is content with the clause 4 as drafted.

Clause 5 was considered.

Agreed - that the Committee is content with the clause 5 as drafted.

Clause 6 was considered.

Agreed - that the Committee is content with the clause 6 as drafted.

Clause 7 was considered.

Agreed - that the Committee is content with the clause 7 as drafted.

Clause 8 was considered.

Agreed - that the Committee is content with the clause 8 as drafted.

1.3. Agreed - that the Report should include the oral evidence from the Department of Enterprise, Trade and Investment together with the written submission from the Committee on the Administration of Justice.

Public Session ended and meeting suspended at 11.50am.


[Extract]

MINUTES OF PROCEEDINGS OF THE COMMITTEE
RELATING TO THE REPORT

WEDNESDAY 3 OCTOBER 2001
IN ROOM 144, PARLIAMENT BUILDINGS

Present: Mr P Doherty MP (Chairperson)
Mr S Neeson (Deputy Chairperson)
Mr B Armstrong
Mrs A Courtney
Mr D McClarty
Dr A McDonnell
Ms J Morrice

Apologies:
Dr D O'Hagan

In attendance:
Mrs C White (Committee Clerk)
Mr M Anderson (Assistant Committee Clerk)
Mrs J Murdoch (Executive Support)
Miss A Fowler (Administrative Support)

The meeting went into public session at 10.25am

Industrial Development Bill (NIA Bill 18/00)

The draft report on the Industrial Development Bill was read.

Agreed - the draft report on the Industrial Development Bill and ordered it to be printed.

Agreed - the extract from the Minutes of the Meeting held on 26 September 2001 relating to the Industrial Development Bill.


[Extract]

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MINUTES OF EVIDENCE

Wednesday 26 September 2001

Members present:

Mr P Doherty (Chairperson)
Mr Neeson (Deputy Chairperson)
Mrs Courtney
Mr McClarty
Dr McDonnell
Dr O'Hagan

Witnesses:
Mr G McConnell )
Mr D McAuley ) Department of Enterprise,
Mr P Dolaghan ) Trade and Investment

1.

The Chairperson: Gentlemen, you are welcome. May the Committee hear your evidence.

2.

Mr McConnell: The Industrial Development Bill will establish a single economic development agency as a non-departmental public body (NDPB). The Minister proposed that the new body be known as Invest Northern Ireland (INI).

3.

The Bill transfers the existing powers in the Industrial Development (Northern Ireland) Order 1982 to INI thereby giving it the functions presently exercised by the Industrial Development Board (IDB), the Local Enterprise Development Unit (LEDU), the Industrial Research and Technology Unit (IRTU), the business support division of DETI - which was formerly part of the Training and Employment Agency - and the business support activities of the Northern Ireland Tourist Board.

4.

The Bill also transfers the assets and liabilities of those bodies and amends the Industrial Development (Northern Ireland) Order 1982 and related legislation, underpinning the existing activities of each of the aforementioned bodies.

5.

The main purpose of the Bill is to establish INI and to transfer powers to it. Although the Bill specifies the parameters of matters such as the membership and remuneration of the INI board and staffing and financial arrangements, it seeks only minor changes to existing powers of providing financial assistance to businesses. Consequently, the Bill does not significantly affect the policies and functions of the existing agencies. The powers in the Industrial Development (Northern Ireland) Order 1982 are wide-ranging, and INI will therefore have considerable scope to develop new policies, which the Minister will expect it to do.

6.

The Bill has eight clauses and four schedules.

7.

Mr McAuley: The Bill must be read in conjunction with the Industrial Development (Northern Ireland) Order 1982, as the main functions of INI derive from part three of that Order.

8.

Clause 1 of the Bill establishes INI as a body corporate and, in tandem with schedule one, sets out its status, constitution, and procedures. Clause 2 and schedule 3 of the Bill transfer existing industrial development powers to INI. This means that from the appointed day INI will exercise the functions previously carried out by the Department and its agencies under part 3 of the Industrial Development (Northern Ireland) Order 1982 and article 3 of the Energy Efficiency (Northern Ireland) Order 1999.

9.

Clause 3 and schedule 2 dissolve the existing bodies. Subsections (1) to (3) effect, from the appointed day, the dissolution of the IDB, LEDU and IRTU. Clause 4 deals with interpretation; clause 5 details amendments and repeals.

10.

Clause 6 retains in the Department of Enterprise, Trade and Investment the powers under the Industrial Development (Northern Ireland) Order 1982 to offer financial assistance to the gas and electricity industries, responsibility for which will continue to rest with the Department. However, this is only a temporary saving until the issue can be dealt with fully in forthcoming energy legislation. Therefore the saving expires three years from the appointed day.

11.

Clause 7 gives the Department the power to bring the provisions of the Bill into force by order. As Members of the Committee will be aware, it is intended that INI be established in early 2002, probably on 1 April 2002. If that can be done.

12.

Clause 8 gives the short title of the Bill, which is the title by which the Bill will usually be referred to. I am happy to expand on the detail of the schedules or to answer the Committee's questions.

13.

Mr Neeson: Why can the Department not deal with energy issues?

14.

Mr McConnell: The Industrial Development (Northern Ireland) Order 1982 gave the Department powers to assist industry. It uses those powers to assist industries, including the energy industry. The Bill will transfer all the Department's powers to INI; this will leave the Department with no powers to assist any industry.

15.

The Minister has decided that responsibility for energy will remain in the Department, so we must ensure that the Department has the powers to continue assisting industry. The Office of the Legislative Counsel does not like such untidiness and agrees to leave a little bit of power with the Department in the short term. However, it wants this to be tidied up in the forthcoming energy legislation. This will act as a temporary bridge for us from the day that INI comes into being by giving the Department the power to assist energy industries. However, we intend to introduce an energy Bill, probably in 2002 or 2003 to tidy up the loose ends. That is why the saving is only for three years.

16.

Mr Neeson: Will grants and assistance come from the Department's budget or from INI's budget?

17.

Mr McConnell: Grants to the energy industries will be part of the Department's budget.

18.

Dr McDonnell: Energy is important. What do you expect of an energy Bill?

19.

Mr McConnell: Sir Reg Empey's statement in the Assembly set out his energy strategy. The Bill will deal with the regulatory regime and the regulator's powers. It will also consider buying out the assets of some of the electricity contracts with a bond. That has been discussed in some detail. It will also deal with the future of renewables and the nature of the regulator's role. The Bill will be based on Great Britain's Utilities Bill, which we shall be looking at. We shall consult the Committee extensively.

20.

Dr McDonnell: It is topical. At the moment we are looking at many energy issues.

21.

Mr McConnell: The Committee's report on energy will be a major contribution to the deliberations on the Bill's content.

22.

Mrs Courtney: Clause 3 (4)(a) states the functions of the Tourism Board in connection with the provision of financial assistance under Article 11 of the Tourism (Northern Ireland) Order 1992 (NI 3) for the purposes of providing or improving tourist accommodation are abolished"

23.

Does that include capital build?

24.

Mr McAuley: The power to offer financial assistance to businesses will be withdrawn from the Tourist Board and will be vested in the new body. The power to assist tourism infrastructure projects will, however, remain with the Tourist Board. For example, if councils were to make proposals for amenities in council areas, the board could still offer assistance; however, it will no longer be able to offer assistance to businesses for tourist accommodation.

25.

Mrs Courtney: Does that include hotels?

26.

Mr McConnell: At present, the Tourist Board provides capital grants for hotel and other accommodation projects. Hotels and tourism are businesses like any other. The thinking is that they would be better served by the vast range of Invest Northern Ireland (INI) business support services and that the Tourist Board should be left to concentrate on Northern Ireland's overall tourism. The Tourist Board will support infrastructure and will work with councils and regional tourism organisations.

27.

Mr McAuley: The change is in response to suggestions made by the Tourist Board and the tourism sector.

28.

Dr McDonnell: The Committee's members, laypersons though we may be, are in general happy with it. We simply want to make things happen, and we want to be as helpful and supportive as possible. Since the tragedy in New York, tourism will be a much more difficult business.

APPENDIX 1

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Submissions

WRITTEN SUBMISSION BY:
COMMITTEE ON THE ADMINISTRATION OF JUSTICE (CAJ)

1 August 2001

Please find attached a recent submission prepared by CAJ in response to the impact assessment of the Bill for restructuring the Department of Enterprise, Trade and Investment Agencies. CAJ recently received the results of the Equality Impact Assessment from the Department and were somewhat disappointed with the findings. Notwithstanding minor amendments, largely in the introductory paragraphs, our concerns in relation to how the proposed legislation will deliver greater equality, in accordance with Section 75 of the Northern Ireland Act, not been addressed. Indeed the reply we received from the Department states that none of the comments made necessitated any change to the proposed legislation.

We therefore request that our response to the original impact assessment be considered as written evidence by the Committee for Enterprise, Trade and Investment in their examination of the Bill. Should the Committee require clarification on any of the issues contained in the submission, please do not hesitate to contact me.

I look forward to hearing the views of the Committee.

MAGGIE BEIRNE
Research and Policy Officer

5 June 2001

Many thanks for sending CAJ a copy of the Equality Impact Assessment of the Bill for the restructuring of the Department of Enterprise Trade and Investment Agencies that we read with great interest. For some time CAJ has been involved in the process of furthering mainstreaming within Northern Ireland and we are keen to forward our views on as many of these documents as possible. As you can imagine however, one of the difficulties for us as consultees has been the fact that across the various government departments, and indeed the wider public sector, there have been a number of different deadlines for a range of documents pertaining to Section 75. It is clear that both the public sector and community/voluntary organisations are all on the same learning curve in endeavouring to ensure that the objective of Section 75, ie the furthering of greater equality, is realised. We are certainly keen to do all we can to ensure that this happens. Accordingly, we apologise for the delay in submitting our response to the paper however, and we hope that you will still be able to take our views fully into account.

One of the difficulties with this process is that there is no template from other jurisdictions on which one can draw in order to examine how one would go about carrying out an equality impact assessment for the nine categories covered in Section 75. Most impact assessments that CAJ has encountered thus far from other jurisdictions tend to focus solely on the issue of gender for example. Nonetheless, there have been a number of documents produced recently that we believe provide a useful guide as to how a Section 75 impact assessment might be carried out. The most notable of these of course has been the recent Practical Guidance on Equality Impact Assessment published by the Equality Commission. In addition, perhaps we should point out that last December CAJ, as part of the 'Equality Coalition' helped organise a conference, 'Screening and Impact Assessment' at which two experts provided practical advice on how a Section 75 Equality Impact Assessment might be carried out. The Equality Coalition has produced a newsletter outlining some of the key messages from the conference, and will shortly be publishing a full conference report which we will also forward to you.

Looking at these documents it is clear that there is a general methodology to conducting impact assessments which the Equality Commission expect public bodies to follow, namely 'the seven steps'. These steps have created for consultees a series of questions that they would expect to see addressed in any impact assessment. These questions would include for example,

The list above is by no means exhaustive, although the Coalition Newsletter does provide a fuller list. Looking at these questions in conjunction with your own Equality Impact Assessments there are a few observations/questions that I would like to raise which I hope you will find useful.

As pointed out in the Equality Commission Practical Guidance on Impact Assessment, the first stage in carrying out an impact assessment involves defining the aims of the policy in question. Indeed there are a series of detailed questions on page 7 of the Practical Guidance outlining the kinds of issues that need to be considered when defining the aims of a policy to be subject to equality impact assessment. These include for example:

We note that in your impact assessment there are a number of different references to the aims of the Bill in question. For example, your document states that (Page 1 para III),

'The main purpose of the Bill will be to establish the new agency. This Bill will not, therefore, impact on the policies of the existing agencies. It will transfer existing powers to the new agency to give it a legal basis for future operation'.

There is further explanation by way of Background to the Bill, (page 4) which refers to:

'better and more efficient delivery of economic development support services and that the most efficient way of achieving this was through the establishment of a new single agency. The clear predominance of opinion was that the agency would have more flexibility and credibility and would be more responsive to the needs of its clients if it were to be at arm's length from Government'.

Furthermore, there is further explanation provided on page 6 which states that:

'The main purpose of the Bill will be to establish the new agency. While the Bill will need to specify the key parameters of the membership, remuneration, etc of the Board of the agency and its staffing and financial arrangements, no new or varied powers in respect of the services to businesses provided by the existing agencies are being sought. The Bill itself will not, therefore, impact on the policies of the existing agencies. It will transfer existing powers on the new agency to give it a legal basis for future operation'.

The document than goes on (Para 1.8, page 8), to state that the new organisation shall be a public body for the purposes of Section 75 of the NI Act. Looking at these statements however, it is not entirely clear, as a consultee, what exactly is the aim of the Bill? On the one hand, one might assume that some of the statements above there is to be no change in powers or indeed activities, and on the other hand, the establishment of a new agency bringing together the IDB, LEDU, IRTU, BSD and NITB is intended to ensure a 'more efficient delivery of economic development'. Perhaps the best course of action would be for the EIA to include an 'aims' introduction as explicitly proposed in the Practical Guidance, (Page 7). This will then enable consultees to determine whether the focus of the EIA (Page 9) accurately reflects the intended aim.

This also relates directly to stage one of the impact assessment, namely the issue of 'Consideration of Available Data and Research', (Page 13). We welcome the publication of the material on pages 14-18, and the recognition given (Page 19, para 5.2) to the under-representation of females and Catholics. We disagree however with the assertion in para 5.1, that:

'At an overall level, the staff profile of the new agency reveals no evidence of a significant adverse differential impact on staff within any of the nine Section 75 categories should the proposed Bill for the restructuring of the DETI Agencies be introduced. This reflects the fact that the Bill merely effects a movement of staff from several existing organisations into one new body'.

This would seem inconsistent however with the statement above. If an organisation already contains an under-representation of certain categories, then any restructuring has the potential to reduce or increase that under-representation. Furthermore, if the Bill will, as stated above

"specify the key parameters of the membership, remuneration, etc of the Board of the agency and its staffing and financial arrangements"

then clearly there would seem to be the potential to further or reduce 'adverse impact'. Furthermore the EIA goes on to state that, (Page 13, para 4.2),

"No details are provided on staff dependants or their racial group, political opinion or sexual orientation as such detail is not currently held by the agencies. However, given the size and diversity of the group of staff involved, there is no reason to believe that any of these would show significant differences from the workforce and the population at large."

Again, we would question the basis on which this assertion is made. Given the under-representation of Catholics for example, surely that would indicate the likelihood of an under-representation of Nationalists/Republicans? Given the overall low proportion of people from ethnic minorities working in the public services, is it not likely that they will be less well-represented in the agencies than in the population overall?

The problem here is that unfortunately, the 'aims' of the policy have not been specified clearly enough. Is an aim of the Bill to create a single agency that will more accurately reflect the needs of all the stakeholders covered by the legislation? If not, why not? The impact assessment seems to suggest that the Bill will be 'neutral' in this respect. However given that the Bill will be specifying parameters of the membership, remuneration of the board etc, it seems difficult to envisage how the Bill will not impact in some way on the groups covered by the legislation. Surely, new structures will either promote equality for some/all of the groups covered by Section 75 or they won't? The problem with the approach in this EIA is that the intentions of the DETI do not seem clear enough, and there appears to be a lack of information on which a consultee can provide an informed response.

There are also a number of other issues that I would like to draw to you attention. For example in relation to relocation we note that you recognise that any proposal to relocate might potentially have differential effects on religious and political grounds (Para 5.4.3, page 20). You state that any changes will be subject to discussion and, where appropriate, negotiation with NIPSA. This is contrary again to the Practical Guidance, which would require that any relocation issues need to be considered as part of the EIA, covering all nine categories, and consulting with all categories. NIPSA should be included but cannot be the sole interlocutor, not least, because potential as well as existing stakeholders need to be part of the consultation and participation process. This advice is in accordance with the Commission's Guide to the Statutory Duty - see para 4.1 of the original guidelines.

Furthermore, in relation to the issue of assessment of the client base, the EIA states that impacts would be determined after the agency is set up, rather than through any provisions of the Bill. Again however, one must question how impact of the client base can be separated from - the key parameters of the membership, remuneration, etc of the Board of the agency and its staffing and financial arrangements. Moreover, a key issue in light of previous studies surrounding the work of eg IDB, is what will be the impact on the potential client base of the new Bill, and ultimately the new agency? Again, it would seem that issues such as membership of the Board etc, would have some impact in this respect.

These comments are by no means exhaustive, merely some preliminary thoughts on what is a new kind of document. I do hope that they are of some use to you and we would refer you again to the Practical Guidance document as a reasonable starting point. We look forward to hearing any views you may have on this matter and wish you well as the debate progresses.

MAGGIE BEIRNE
Research and Policy Officer

PS I note that in relation to formal consultation (Para 7, page 23) your EIA refers to alternative formats, advertisements in the Belfast Telegraph etc. What other arrangements were made in relation to consultation to ensure compliance with the Guidelines eg meetings etc, (see especially Practical Guidance, chapter 7)? You are obviously aware that impact assessments are in fact meant to be a matter of consultation with affected groups and individuals and, as such, require more targeted consultation than was required for comments on the Equality Scheme etc.

WRITTEN SUBMISSION BY:
COMMITTEE ON THE ADMINISTRATION OF JUSTICE (CAJ)

18 September 2001

Thank you for your letter dated 5 September 2001 regarding the Committee's views on our submission to the Industrial Development Bill. We are very pleased to hear that the Committee are interested in hearing our views on the Department's response to the concerns that we raised in our initial response to the impact assessment.

We would also like to state that we do not believe that all the issues CAJ raised in our submission to the equality impact assessment have been dealt with adequately by the Department. Indeed we note that according to the results of the equality impact assessment (EIA) (page 3 para X) "none of the comments received and accepted will impact on the terms of the Bill".

Looking at the way in which the Department has addressed the concerns of CAJ (and other consultees), there seems to be a number of problems. Firstly, where DETI states that CAJ recommendations have been accepted there are a number of instances where the 'acceptance' in our view fails to address the substance of our comments. For example, looking at the background to the Bill, the EIA states that our recommendation in relation to defining the aims of the policy has been accepted. From our point of view, however, and in line with the Practical Guidance on Impact Assessment issued by the Equality Commission, the list of aims provided in the final analysis is still lacking in substantive detail. Moreover, our comment about the need for the new structures to outline whether they will lead to the promotion of equality of opportunity or not has also not been adequately addressed. The response being merely that there is an obligation to safeguard the employment of staff working in the existing agencies.

Another area of concern from CAJ's point of view relates to those comments which have not been accepted by DETI. Again, in this respect we would question the rationale of the Department. For example, CAJ stated that the statistics on religion and gender indicated a prima facie case of under-representation in some of the other Section 75 categories. We argued that the under-representation of Catholics for example would indicate the likelihood of an under-representation of Nationalists/Republicans. According to DETI however, this argument was not accepted and that this was not a valid or accurate basis on which to draw conclusions. In our view this not only belies a lack of appreciation of the concept of 'adverse impact', and the rationale of Section 75, but is also contrary to any common sense interpretation of monitoring data.

These concerns are merely intended to be illustrative of the sorts of problems we have identified in relation to the impact assessment. Indeed that there are a number of other points that we would also wish to raise with the Committee should you wish to invite us to give oral evidence.

MAGGIE BEIRNE
Research and Policy Officer

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