Economy Minister publishes Sub-Regional Economic Plan

In October 2024, Economy Minister Conor Murphy MLA launched a new plan to drive regional balance in the economy.

According to the Department for the Economy (DfE), economic disparities between regions in Northern Ireland have worsened amid systematic barriers and persistent problems.

Insisting that all communities should be facilitated in realising their potential, the Department has placed improved regional balance “at the heart of the economic vision”. Indeed, alongside increased productivity, more good jobs, and decarbonisation, regional balance is one of the four objectives of this vision.

In this context, as per the Place 10x actions for 2023/2024, the Department has developed a new economic plan “with measurable targets” to tackle sub-regional disparities.

Published by the Minister for the Economy, the Sub-Regional Economic Plan is a “new strategic approach to economic policy” which DfE says is
locally-led, supports collaboration, and has regional balance at its core.

Aimed at empowering local communities “to identify their own economic priorities”, the Sub-Regional Economic Plan contains three key elements:

1. creating local economic partnerships;

2. restructuring the economic development agency, Invest NI; and

3. adopting a new approach for DfE to mainstream regional balance, including via departmental restructuring and the creation of a new Regional Balance Unit.

In his foreword to the Sub-Regional Economic Plan document, Murphy notes: “Working in partnership with my department, the Invest NI Board and Chief Executive will oversee this profound change in its approach, with clear and ambitious targets agreed to monitor performance… In the spirit of true co-design and collaboration, we can start to reverse historical imbalances and deliver prosperity throughout the region.”

Local partnerships

The new approach, Murphy says, is underpinned by local economic partnerships – comprising central government, the business community, universities and colleges, local enterprise agencies, and civil society – identifying specific barriers to, and priorities for, economic development. Over three years, the Sub-Regional Economic Plan says that these partnerships will be allocated dedicated funding of £45 million.

“Partnerships will identify the main barriers to economic development and the priority interventions that will build the region’s value proposition,” he explains, adding: “My department will recalibrate its programmes and budget to help meet these priorities.”
Invest NI

Meanwhile, staff numbers in Invest NI’s five regional offices in Ballymena, Craigavon, Derry, Newry, and Omagh will be boosted by “an initial 40 per cent” and will be tasked with managing “local clusters and businesses with a turnover of £2 million”. In support, Invest NI’s headquarters will provide specialist advice, reorientating the entire organisation towards balanced regional development.

Ultimately, this initiative aims to ensure that 65 per cent of Invest NI’s investments are allocated beyond the greater Belfast area.

Welcoming the plan’s publication, Invest NI CEO Kieran Donoghue reiterated: “We are committed to working in partnership with the Department for the Economy and other key stakeholders to support the achievement of the Minister’s policy priority of increased regional balance.”

Invest NI’s imminent three-year business strategy, the CEO reveals, incorporates regional development as a key objective and is set to provide additional detail on the organisation’s approach.

Speaking in the Assembly, the Minister highlighted: “58 per cent of the population is outside of the Greater Belfast area. Yet this area outside of Greater Belfast makes up 48 per cent of the economy, as measured by Gross Value Added. In order to help redress this imbalance, within three years 65 per cent of the agency’s investments should be outside of the Belfast Metropolitan Area.”

Furthermore, Murphy advised that the CEO had “informed me that reaching this target [of 65 per cent] would be challenging”, though his organisation was committed to doing “everything in their power to deliver”.

Assembly statement

In his statement to the Assembly, the Minister describes his new strategic approach to economic development as “locally-led” and as placing “regional balance at its heart”. Contextualising the rationale informing the need for improved regional balance, he outlines the disparities which exist in employment, productivity, and living standards.

Explaining that DfE has never before development a coherent strategy for balanced economic developed, he references the Independent Review of Invest NI which found that decision-making was “centralised in Belfast” and that regional offices were “underutilised”, not integrated, and “too modestly resourced”.

Crediting the work of local government, he emphasises that councils “cannot be expected to transform local economies on their own” and that any substantive change in regional balance hinges on a “coherent ecosystem”.
Reaction

SDLP economy spokesperson Sinéad McLaughlin MLA criticised the Economy Minister’s “failure” to support her proposal for legislation to place “binding obligations across government for regional economic balance”.

“Today was an opportunity for the Minister to set out his stall and give the Assembly confidence in his stewardship of our economy. While I welcome a focus on regional economic balance, productivity, and on the development of the all-island economy, today’s statement falls well short of what is required,” she said.

“Commitments have been made in previous visions, strategies, and plans laid before the Assembly and those commitments remain undelivered… The proof of today’s economic vision will be in the transformation of life outcomes for people, not just where they are already doing well, but in those most deprived areas that require intervention. Based on this statement today, I fear we are still relying on the same failed approach as before, with little accountability.”

On the other hand, Derry Chamber of Commerce President Greg McCann welcomed the plan as a “step in the right direction” towards “more bespoke economic action addressing regional balance”.

“The setting of concrete targets – such as 65 per cent of Invest NI investment being outside the Belfast Metropolitan Area within three years – will be further cause for confidence as it will give those of us invested in the delivery of regional balance a yardstick against which to measure our progress. We look forward to assisting in the implementation of the plan and seeing the North West continue to grow and reach its potential,” he said.

Next steps

From now until the end of 2024, DfE and Invest NI have committed to continued engagement with local government and local stakeholders to “support the formation of the local economic partnerships” and co-design the funding allocation model.

Subsequently, between January and March 2025, the local economic partnerships will be tasked with proposing projects which align with the Economy Minister’s productivity, good jobs, emissions reduction, and regional balance priorities. These must be agreed by the end of the financial year, ensuring that funding can be drawn down from April 2025.

Between April 2025 and March 2028, DfE and Invest NI have committed to reviewing and approving proposed projects which will then be delivered via dedicated funding.

Acknowledging the ambitious nature of this timeframe, the Sub-Regional Economic Plan insists: “By working together in partnership, we can deliver tangible change at a local level.”