Belfast Telegraph

Government can learn from our private sector

By John Simpson

Ministers in the Executive are now tasked with the job of publishing a new economic strategy as part of the refreshed Programme for Government for the years up to 2021.

Numerous suggestions have emerged from the recent period of consultation. Ministers could be forgiven if they complained that, as might have been expected, the consultation process has not been as disciplined in the application of ideas as is now expected from ministers themselves.

Few responses were realistically constrained by recognition that Government will be short of funds.

Ministers emphasised that planning a Programme for Government (PfG) would start from a new perspective. The thrust of the new programme would be built on 'an outcomes' perspective from which specific policy applications could be framed. This procedural model has the advantage that policy making can be framed by targeting objective outcomes.

Conceptually, the planning framework is logical. Critically, that sets a better planning basis but it still calls for a series of policy decisions prioritising how outcomes will be delivered by implementing targeted policy inputs.

Sadly, some of the responses to the consultation have fallen into the trap of focusing heavily on rather imprecise 'outcomes' to the avoidance of the choice of priorities in setting the 'inputs' to drive the 'outcomes'.

There are critical constraints on the range and scale of inputs that can be deployed by the Executive ministers. First, the Executive must propose a Programme for Government that respects the budget constraints, or at least, offers ideas on what flexibility can be found in the financial arrangements for devolution. Second, there must be recognition that the budget constraints will soon be altered by Brexit, although these changes may not be clarified and realised until 2018-19.

The NI Chamber of Commerce in a brief submission endorses the general approach set by the Executive. It goes further and asks for prioritisation within the 14 strategic outcomes. Priority is suggested for 'a strong competitive regionally balanced economy', 'an innovative creative society where people can fulfil their potential' and 'a place where people want to live, work, visit and invest'.

An emphasis on the compelling logic of setting priorities is a necessary addition. Even with these suggestions, policy makers are left to consider precisely how priorities should be identified and delivered. Then, setting an even wider agenda, the Chamber asks for an additional target outcome: 'an Executive that works in partnership to deliver major societal change...'

The Executive might reasonably respond that the major societal changes need to be codified. Is this an implicit judgement on the apparent widening of income inequality in recent years or is it code language for changes in labour market regulation? The suggestion does open the door to a more targeted and constructive range of policies, social and economic.

The NI Chamber of Commerce starts with an understanding of the processes of determining a better-shaped PfG. It is in the specification and identification of outcome priorities that economic outcomes are critical but not to the exclusion of social and environmental challenges.

As would be expected, the NI Chamber commends a number of current and planned actions. It asks for a more rapid progression on key infrastructure projects, endorses steps to identify ways to improve competitiveness, asks for greater recognition of the role of entrepreneurship in stimulating economic growth, and suggests that business representatives could contribute to ideas to tackle too high energy costs, business rates and red tape.

There is no doubt that, for the local economy, this is a potentially complex series of inter-related objectives to be influenced by selected targeted inputs.

The next stage in a constructive dialogue would be for the NI Executive now to ask the Chamber (and other groups) to convert the objectives into a fully-costed action programme for policies and Government budgets. That would be very useful but is it do-able?

A meaningful and prioritised PfG is awaited.

Company Report: Concentrix

Concentrix Europe has its main Northern Ireland operations in Lanyon Place in Belfast. It is a subsidiary of a Dutch parent company which, itself, is a subsidiary of the SYNNEX Corporation in the US.

Concentrix describes its principal activity as the provision of complex outsourced business services to blue chip companies.

In recent years, annual turnover has been increasing with the exception of the most recent trading year when a fall of just under 8% was recorded. Employment more than doubled between 2012 and 2015 to reach 1,651 employees.

The company is now one of Northern Ireland’s largest employers attracting business in the information technology sector.  In an explanatory note on recent trends the company comments that the reduction in turnover in 2015 was due to a mixture of what it describes as ‘natural contract attrition and foreign exchange pressures for non-sterling billings’. The recent depreciation of sterling may have helped to sustain non-sterling trading margins.

The net trading margin fell in 2015 and this is reported to be caused by an increase in management and support costs. As an IT-based organisation, the company has incurred significant capital costs in each recent year.

The report refers to competition from economies such as India, Philippines and eastern Europe. In a possible note of reassurance, the report refers to becoming better placed to offer a range of blended customer support solutions ‘providing more complex and multilingual services’.

Belfast Telegraph