CBI's message is clear: it is time for fresh thinking from Government
Published 21/02/2012 | 17:00
In response to the Programme for Government (PfG), the Confederation of British Industry (CBI) concludes that "there is much to welcome and support". It also has serious reservations.
Ministers in the Executive have been offered helpful ideas on policies and actions that would improve the PfG. CBI offers a dialogue where ministers could take helpful advice from well-informed critical stakeholders.
There is agreement that the PfG is a major improvement on the efforts of the previous Executive. However, there is now also the opportunity to do better.
In the wider business community there has been a recurring criticism that, in the past, the Executive has insufficiently identified and implemented policies that could gain best possible economic outcomes. Ministers tend to be defensive. They sometimes too readily argue, implicitly, that ministers know best and have little to gain from real dialogue, where real dialogue is much deeper than the lighter conversation at social public events.
Responding to the draft Economic Strategy the CBI stresses the need "to secure a positive decision (no later than this summer)" on devolution of corporation tax. Then CBI adds a plea for action to tackle the shortage of finance for businesses, drawing attention to the proposed £50m loan fund as being insufficient to meet local needs.
Sequentially, CBI then asks for measures that will help deliver a more comprehensive strategy to increase the level of exports by local firms. The existing draft strategy is seen as being "very disappointing".
The more intensive exporting strategy should be supported by access to increased sources of export finance, whether as loans or guarantees, along with an increased emphasis on key skills - and languages - directed to export sales and marketing. In parallel, CBI asks for more capital funds to be earmarked for (mid-sized) fast growth companies.
Proposals to support businesses with skilfully targeted additional finance will call for the selective development of schemes which will seriously test local policymakers. That is no excuse for not making the effort.
In response to the argument 'where is the money to come from', CBI has restated its earlier documented suggestions that the Executive should take action to reduce by about £100m pa the current level of subsidies (and reduced charges) financed by the Executive.
This means less financing for water and sewerage services, free prescriptions, concessionary travel fares and lower (university) tuition fees.
High on the priorities identified by CBI is a plea that ministers should use the flexibility of devolution with respect to employment regulations.
A recent sample survey, which concluded that nearly half of all employers believe that existing employment legislation is discouraging job creation, is quoted in a plea for changes.
The example used to illustrate the merits of this suggestion is drawn from the experience of employers with the current operations of the Industrial Tribunals which are described as needing to be more accessible, speedier and less expensive.
The CBI makes proposals in a large number of other aspects of the PfG. Each merits careful reading and further elaboration.
- Special actions to reduce unemployment amongst young people;
- Much more ambitious targets to improve GCSE standards in schools;
- Assurance that the delivery of the planning system really will be improved;
- The continuing absence of a tourism strategy;
- Improved delivery of the systems for Public Procurement contracts;
- An increased level of investment in infrastructure projects.
One of the proposals that is most challenging is that the provision of public services should be put under scrutiny to test their competitiveness including the adoption of policies that envisage competitive outsourcing where this may be advantageous. Ministers have not, previously, shown a willingness to be radical with the organisation of public services.
As public sector budgets tighten further, some of the (apparently) unpopular ideas may become more a necessity; not an option!