Belfast Telegraph

Monday 20 October 2014

We have clearer economic policy, what we need now is urgency

First Minister Peter Robinson and Deputy First Minister Martin McGuinness hold copies of the Programme for Government at last month's launch

The Programme for Government (PfG) includes - as a major separate report - an economic strategy subtitled 'priorities for sustainable growth and prosperity'.

This 87-page document moves the Executive from the less satisfactory aspirational assurances of the earlier years towards clearer policies.

Of the three separate volumes that now are the inter-related parts of the PfG, the economic strategy deserves the compliment that it shows signs of useful analysis and efforts to develop operational policies based on prioritised objectives.

The strategy points towards many of the acceptable and necessary developments. Unfortunately, it reads mainly as a strategy, not as an operational plan.

The strategy is not written with the type of background economic modelling that, for example, underpins the reports for the UK from the Office of Budget Responsibility (OBR).

Ministers and their advisers do not reveal the way in which the key features of the economy are now expected to develop.

The strategy, in qualitative terms, expects to reduce the impact of the current recession, or initiate a period of expansion, but the timing and scale of an improved performance remains behind the veil.

The general shape of the economic strategy is more professional than its recent predecessors.

The strategy acknowledges the need to improve competitiveness.

There is a heavy emphasis (possibly over-stated and therefore understating the role of internal competitiveness) on recovery, rebuilding and restructuring through increased export capability for goods and services.

Many of the building blocks for an improved economy are listed.

Some are, however, less explicitly identified.

There is a mixture of ambition to achieve outputs, sometimes without reliable explanations of causation, aspirations expressed as policy drivers, and ambitions disconnected from operational decision making.

The economic strategy is not well integrated with the public sector investment strategy. Public sector capital programmes will be over 35% lower than in 2009-10.

Conspicuously, the reduced programmes affect communications, particularly road and rail.

The Executive ambition is to improve average journey times only by a very modest 2.5%.

There is little recognition of the remaining gaps in infrastructure that are relevant to the economy whether in utilities, education and skills, or other public services.

The Executive has resisted suggestions that it should take active steps to supplement its capital budget, either by exploiting alternative sources of finance or by larger transfers from current budgets into capital.

The economic strategy has attracted support because it contains a number of targets related to business expansion and job creation.

The total ambition for 25,000 new jobs in the private sector has been welcomed.

The aspiration that 25,000 new jobs can be promoted under existing policies (and before there is any impact from corporation tax changes) is notable.

However, when the different sources are analysed and there is recognition that these are gross (not net) changes, this is not a very demanding outcome.

The economic strategy would be a stronger process if each of the performance indicators was grounded in the evidence of comparative recent experience.

There are numerous policy ambitions in the strategy. Two of the most critical relate to (a) the up-skilling of the labour force and (b) the reform of systems for making planning decisions.

Neither of the main statements on skills enhancement goes beyond generic ambitions.

There is no evidence of causal linkages in aspirations to "deliver 210,000 qualifications ... [at different levels]" without any assessment of whether this is an increase and whether it is well directed.

The same applies to unidentified increases within "the STEM strategy".

The ambition to achieve "more predictable processing of planning applications" does nothing to ensure the major policy and timing changes that are needed.

Even the footnote acknowledging the impact of judicial review on planning demonstrates the lack of an agreed procedural improvement.

The economic strategy is useful as a starting point for a better articulated operational plan.

It would be a mistake if the next steps were not now urgently tackled.

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