Belfast Telegraph

Northern Ireland's public sector 'can be a real asset'

New Finance Minister confident 'economic driver' will be more efficient and creative

BY DAVID ELLIOTT

Northern Ireland's relatively big public sector will be an asset for the wider economy in the future if used properly, according to the new Finance Minister.

Speaking to the Belfast Telegraph after only three weeks in the job, Simon Hamilton said the size of the sector is unlikely to shrink "for the foreseeable future" so it needs to become as innovative and creative as possible.

"We've been through six years of recession and cuts coming into public spending and we haven't shrunk its size," he said. "We have taken a conscious decision not to because we recognised it is an economic driver."

The minister said there is "probably a lack of political courage" to take any radical steps to change the public sector.

"But rather than dwell on what those radical steps are, we should realise that if we're employing a third of our people in the public sector then we should be concentrating on making it more efficient and ensure we get more creativity out of it," he said.

"We tend to look at the public sector as a big drag on the economy and that every pound spent is a negative, but that's not the case. We spend £3bn a year on government procurement and even the wages paid to people in the public sector help the economy by being spent in shops and restaurants."

The minister said he was focused on procurement spending, something he said should be used to sharpen the global competitiveness of companies, particularly small ones, in Northern Ireland.

"I take a view that instead of simply buying a pen, buying a piece of paper or buying a process, we (the public sector) should be encouraging companies to develop the best pen, the best piece of paper or the best process and making sure our procurement goes to local firms," he said.

He said 75% of public sector procurement goes to "local" companies at present.

On the issue of lending, Mr Hamilton reiterated his call for companies in search of credit to challenge banks' assertion they are ready and willing to lend.

He said it was incumbent on firms to present their projects to the banks rather than assume credit would be refused.

"If they don't get everything they want then that's where we can come in with some of the products we've developed through Invest NI, but they need to go out and challenge the banks in the first instance," he added.

He pointed out that an appeals process for those who believe they've been refused credit incorrectly exists with the British Bankers Association and is being under-utilised. "They are reporting that very few companies are taking it up despite a high success rate for those that do," he added.

But Mr Hamilton majored on dealing with the public sector.

"I accept we have an imbalance in the economy," he said. "I haven't jettisoned my hope we get a rebalanced economy, but I see it as the private sector growing and public sector becoming more efficient rather than one growing and the other going down.

"We've a tendency to compare ourselves with the rest of the UK but we should really be looking at other countries like Sweden and Denmark where a big public sector goes side by side with an efficient economy.

"It's not mutually exclusive to have big private sector and a big public sector."

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