1 / 22

Responding to the Independent Review of Economic Policy

Responding to the Independent Review of Economic Policy Chartered Accountants in Business Annual Lunch David Sterling DETI Permanent Secretary 10 June 2010. Overview. 1. 2. CURRENT POSITION. ECONOMIC STRATEGY. Recession. Programme for Govt & IREP. Executive Sub Group.

otylia
Download Presentation

Responding to the Independent Review of Economic Policy

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Responding to the Independent Review of Economic Policy Chartered Accountants in Business Annual Lunch David Sterling DETI Permanent Secretary 10 June 2010

  2. Overview 1 2 CURRENT POSITION ECONOMIC STRATEGY Recession Programme for Govt&IREP Executive Sub Group Economic Prosperity Economic Strategy Jobs Wealth Key Themes & Issues

  3. The UK economy has faced its longest recession since records began… Recession Last recession almost 20 years ago Growth Unbroken economic growth for 63 quarters Recession UK economy contracted for six quarters Greater South East 44% of UK output is driven by London, South East and East of England

  4. …and the Northern Ireland economy has also been badly impacted… LARGER SECTOR Contraction Business & Finance, Manufacturing and Construction severely impacted during downturn Business & Finance Manufacturing Retail Construction Transport Other Services LARGER CONTRACTION Hotels & Restaurants Energy Mining

  5. …but low prosperity has been a long term problem… Lower Prosperity than NI North East, Wales N Ireland relative to Rep of Ireland GVA per capita was 48% of RoI (2008) Prosperity Gap Northern Ireland living standards have remained around 20% below UK average

  6. Low prosperity is due to jobs and wealth creation MAIN REASONS FOR LOWER PROSPERITY JOBS Not enough people in employment and too many economically inactive WEALTH Not enough high value added employment in the private sector

  7. Overview of Labour Market IN EMPLOYMENT 740,000 TOTAL WORKING AGE POPULATION 1,097,000 UNEMPLOYED 48,000 INACTIVE 309,000 85 % 15 % 40 % 27 % Don’t Want Want Job Long Term Youth 60 % 73 % Other Other 30 % Sickness 23 % Family 37 % Student 6 % Retired 3 % Other

  8. Northern Ireland was successful at job creation until the downturn… Job Growth NI economy added over 177,000 jobs between 1994 and beginning of recession Job Losses NI economy has lost 33,500 jobs since March 2008

  9. …but is under represented in high value added activities… Public Admin Over Represented Including public services and lower value added sectors Manufacturing Health Construction Education Agriculture Retail Energy (Tourism) Hotels & Restaurants Under Represented Including high value added business and financial services Mining Other Services Transport Financial Services Business Services Output (NI vs GB)

  10. …and lacks sufficient large firms to invest in high value activities… Small Firms Northern Ireland economy is dominated by small firms 18% Large Firms Northern Ireland lacks critical mass for R&D, exports and investment 29%

  11. ECONOMIC • STRATEGY 2

  12. The economy is at the centre of the PfG… Economy Growing a dynamic, innovative economy is central to achieving all goals in the Programme for Government PRODUCTIVITY EMPLOYMENT Recession These priorities remain key to driving economic growth

  13. Restructuring of Economic Policy: 4 Key Areas 1 The way economic policy is coordinated in NI 2 The way DETI and Invest NI provide assistance to businesses 3 The freedom and flexibility Invest NI needs to do its job. The way policy is developed and monitored. 4

  14. 1. Restructuring of Economic Policy: The Co-ordination of Economic Policy in NI Department of the Economy • Executive has agreed to consider establishing a Dept of the Economy as part of the Strand One Review. Sub-Committee of the Executive • First meeting of the Sub-committee took place on 20 May 2010. Economic Strategy • Executive sub-committee on the economy to develop draft economic strategy for Northern Ireland by end of 2010.

  15. 2. Restructuring of Economic Policy: DETI and Invest NI Assistance to Industry Concept of Client Company • Invest NI to develop proposals for a tiered portfolio of support to the wider business base by September 2010. Rationalise Programmes • Invest NI to review the number and breadth of programmes by June 2010. Shift towards R&D&I • IG to bring forward recommendations on when and where SFA should be used by June 2010. • DETI / Invest NI to consider how shift toward R&D&I is further addressed in 2011-14 PfG. • IG to consider the potential use of debt instruments in appropriate circumstances. Business Expansions • Invest NI to continue to intervene where appropriate to support the development of the venture capital market. • Invest NI to outline its proposed VC strategy going forward. Venture Capital

  16. 3. Restructuring of Economic Policy: Autonomy, Flexibility and Decision-making • Proposals to increase Invest NI delegated limits agreed in principle. Increased Autonomy Economic Appraisal • A new protocol for handling cases has been agreed. • A new appraisal methodology for R&D projects is being developed • IG currently exploring what greater flexibility might be achievable but unlikely that recommendation can be implemented. End of Year Funding • Precise role and remit will be reviewed in the context of the work on revising governance arrangements. Invest NI Board

  17. 4. Restructuring of Economic Policy: Policy Development and Monitoring DETI Policy Development • DETI currently undertaking a review of staffing structures to ensure that resources reflect priority areas. Target for initial proposals - June 2010. Invest NI Performance • DETI will oversee the production of the next Invest NI Performance Report - end of 2010/11. Economic Dev. Body • The Minister has stood down EDF. A smaller economic advisory group (drawn from business and economics) met for the first time on 28 May.

  18. A cross-departmental Executive sub-committee on the economy has been established… EXECUTIVE SUB COMMITTEE ON THE ECONOMY Other departments as necessary

  19. …along with the EAG to strengthen independent economic advice to the ETI Minister ECONOMIC ADVISORY GROUP (EAG) ECONOMICS Kate Barker Frances Ruane BUSINESS Michael Ryan, CBE Mark Nodder Alan Armstrong Stephen Kingon Gerry Mallon Lorraine Hall SKILLS Bill McGinnis

  20. A new economic strategy will build upon existing economic strategies… EDUCATION &SKILLS Success through Skills 2 FE Means Business Essential Skills for Living STEM Strategy School Improvement Programme INNOVATION Regional Innovation Strategy MATRIX Higher Education Strategy ENTERPRISE Draft Enterprise Strategy Social Economy Strategy Draft Tourism Strategy NEW ECONOMIC STRATEGY FOR NI INFRASTRUCTURE Regional Development Strategy Investment Strategy for NI OTHER Anti-Poverty Strategy Rural White Paper Sustainable Development Strategy for NI EMPLOYMENT Protecting employment in short term Attracting new jobs through FDI Welfare reform agenda

  21. …and will focus on six key themes as drivers of the Executive’s overarching goals 1. CONNECTIONS TO THE GLOBAL ECONOMY (attracting inward investment, growing exports) 2. ENCOURAGING BUSINESS GROWTH (entrepreneurship, social economy, green economy, tourism, access to finance, planning) IMPROVING PRODUCTIVITY INCREASING EMPLOYMENT 3. STIMULATING INNOVATION AND R&D (R&D and absorptive capacity, wider innovation, business to business / HE / FE collaboration) CROSS CUTTING THEMES (equality, sustainable development) 4. IMPROVING LEVEL AND RELEVANCE OF SKILLS (literacy, HE, FE, existing workforce, low skilled) 5. ADDRESSING SUB-REGIONAL GROWTH (role of cities, rural economy, housing) 6. DEVELOPING ECONOMIC INFRASTRUCTURE (transport links, energy, telecoms, tourism product)

  22. Global economic outlook Public expenditure cutbacks Implementing change Gaining consensus on the right economic strategy for Northern Ireland Key Challenges

More Related