A corporate review

Tough times ahead for the province mean it is time for politicians to redouble their economic efforts, writes Gary McDonald.

The most deep-rooted recession in 60 years may have ended, according to official government figures, and the UK’s economy is beginning the slow climb back to growth, albeit by taking baby steps. But in Northern Ireland it just won’t feel like the pain is over.

For us, it could take years (up to a decade, if you listen to some doom-mongers) for this regional economy to fully claw back the lost ground of the past 18 months, with unemployment spiralling, more companies going to the wall and house repossessions increasing as cash-strapped consumers’ personal finances diminish.

Indeed Bank of Ireland economist Alan Bridle has described it as “entering the twilight zone” between the recession technically ending and any real momentum in our recovery. His Ulster Bank counterpart Richard Ramsey insisted anomalies such as higher electricity costs and no tax-raising powers will mean more local firms will continue to experience a more intense profit squeeze than those in Britain.

Budgeting

There’s the possibility, of course, that the upcoming general election, and with it the potential return of a Tory government, could herald some developments in regional economic policy, with lower corporate tax and “enterprise zones” back on the agenda.

For Northern Ireland, the quid-pro-quo for any tax changes would be a reduction in the block grant – an unpalatable prospect as the local Executive prepares for a more intense fiscal squeeze from 2011.

Stormont departments in charge of hospitals, schools and roads are set to bear the brunt of near £400 million cuts in spending, which are necessary because of the deferral of water charges, freezing of the regional rate, free public transport and now free prescriptions.

The cuts are necessary because Finance Minister Sammy Wilson has little or no wriggle-room in balancing the books, although he insists his blueprint for 2010- 2011 is a “prudent step” to avoid problems in the future.

While the business of politics continues to be characterised by disharmony and strained relations, Wilson insists that when it comes the economy, every MLA is singing off the same hymn-sheet.

Not everyone agrees with that assessment, however. His DUP colleague and First Minister Peter Robinson lauded the Stormont regime for “greatly improving the situation for our community, businesses and householders”. Yet UUP leader Sir Reg Empey described the same set-up as “irrelevant and distant from the everyday worries and concerns of families struggling to survive with increasing unemployment and economic uncertainty”.

The apparent discord prompted Wilson to take the unusual step recently of publicly castigating the “armchair experts” who sit on the sidelines criticising the Executive for not delivering real improvements to people’s lives.

He pointed out that in the last year alone, 14 major school building projects were completed with a further two projects imminent, and funding of £200 million was made available to Northern Ireland’s two universities to cover teaching, learning and research.

Several construction schemes were also accelerated, including the new South West Hospital in Enniskillen, new health and well-being centres in West Belfast and 2,250 houses; and major roads projects came on stream, including the M2 improvement and the award of a contract for the A8 Belfast to Larne link.

“With the ever-tightening fiscal situation and continuing economic problems gripping us, the local administration has been able to respond to local needs, and those critics who revel in highlighting apparent failings of the Executive are contributing nothing,” he fumed.

Investing

Despite the global malaise and dearth of foreign direct investment, Northern Ireland continues to argue the point that it remains a strong proposition to potential investors.

One of the keys will be just how future policy is delivered, now that many of the 58 recommendations made last year in the Independent Review of Economic Policy document, which covered a broad range of issues associated with economic development and delivery, are now being implemented.

In comparative terms, however, Northern Ireland has consistently performed better than many other regions in the UK and has shown it can meet the demands of even the most advanced sectors.

In the past few months Wall Street financial giant NYSE Euronext, for instance, turned to Belfast for a multimillion pound investment creating 400 highly-paid software jobs, while Seagate Technology is ploughing in £60 million in two major research and development projects in Belfast and Londonderry.

“At a time when the global competition for mobile investment is greater than ever, investment like these send out a very clear message that Northern Ireland has a competitive and compelling offer,” according to Economy Minister Arlene Foster.

With her brief stint “acting up” as First Minister now behind her, much of her upcoming itinerary includes glad-handing would-be investors both in Europe and America, and areas like tourism, for instance, present rich pickings for local businesses, especially with visitor numbers soaring.

While the recession in the technical sense is over, the Northern Ireland economy has yet to turn the corner. It’s vital now that politicians and agencies redouble their efforts in 2010 to make a significant contribution to the shared aim of growing a dynamic and innovative economy and to raising living standards across Northern Ireland.

Docklands committed to Excellence

Docklands Ltd (Chartered Accountants) based at Clarendon Dock in Belfast are proud as a Northern Ireland SME and local employer to continue to provide excellent services to its public sector clients.

Stephen Moore, Director of Docklands, outlined: “After seven years of business Docklands has delivered high quality financial and systems accountancy, risk management, internal audit and economic appraisal services to both the public sector in Northern Ireland and the Republic of Ireland. In an increasingly competitive market we continue to explore further opportunities within emerging markets in Europe as part of our overall strategic plan.”

Stephen continued: “We are committed in Docklands to providing a quality service to all our clients. We are particularly proud of our achievement of being a key service provider to the Northern Ireland Civil Service, through the Central Procurement Directorates, Financial / Management Services and Recruitment Framework agreements. This opportunity has allowed us to provide advice and guidance from a high calibre pool of accountants to an impressive list of Northern Ireland public sector clients.”