The return of the NI Executive after three long years away is excellent news and has been enthusiastically welcomed across the business community. However, simply being back at the desk is just the start, the hard work begins now.
Brexit may grab the headlines but our economy and society is being transformed by automation, digitalisation, climate change and the threat from new competitors. This means the new Executive will need to be brave, progressive and collegiate to create the conditions for success.
Firms have coped admirably in the absence of devolved decision making, particularly when considered in tandem with the confusion surrounding the timing and implications of Brexit. Job growth has been significant and EY and our colleagues in the other large professional services firms have remained extremely busy.
Our neighbours in the Republic of Ireland have enjoyed a period of remarkable growth despite the mood of uncertainty. This, however, should not distract from the difficulties businesses have faced. Overall growth figures have been poor, the demand for restructuring work has accelerated, investment decisions have been delayed, attracting staff to Northern Ireland has become more challenging and resource has had to be diverted to preparing for a range of possible outcomes.
Compounding this has been the absence of decisions being made on critical issues such as higher education funding or infrastructure projects. A strong labour market has perhaps masked some of the damage from citizens, but the cost is clear. Early discussion, perhaps understandably, of the New Decade, New Approach document has focused on the promises within, most specifically the financial commitments.
The indication of an extra £1bn of funding has been dismissed by the new Finance Minister as well short of need.
It would be wrong to focus wholly on the money available. Whilst we all want to see Northern Ireland prosperous we must also be aware that the UK and Republic of Ireland have significant socio-economic pressures of their own that their taxpayers are exercised about. The reward for being in government is the ability to craft policies and conditions that attract investment and allow firms to proposer, the time has now come to develop a long term strategic plan that will enable Northern Ireland to not only deliver best in class services but to also further enhance the regions capability and offerings. Funding is promised to help with hospital waiting lists and to deal with housing stress and welfare concerns. These are not problems unique to Northern Ireland, though the scale is often greater. In truth a sustained period of reform will be needed across many of the services we hold most dear, costs are spiralling and demand rising. This involves an openness to different delivery models and funding avenues.
For businesses the refrain is always for the removal of uncertainty, even though they recognise that is the nature of the world in which we operate. The indication of multi-year budgets and a more long-term legislative programme is very welcome, the short-term nature of the budget setting during the hiatus has been very damaging. Though the document is full of promises, corporation tax reduction is notable by its absence. Perhaps with unemployment so low, the UK rate soon to be 17% and the shifting public mood, its disappearance is unsurprising.
But there are lessons to be taken from the corporation tax journey. It took far too long from idea to implementation, this cannot be allowed to happen with any future major policy shifts. The recognition of the need to invest in infrastructure and public services is acute and firms and citizens recognise that tax reduction is not a current policy focus. Tailored support and improved service provision appear the order of the day.
The greater prominence of business organisations during the Executive’s hiatus is something that should be built upon, ensuring a new closer relationship existing between private and public sector which was testament to everyone who played their part.
The strategic direction set out in what will likely be a refreshed Programme for Government and a raft of new strategies and policies can perhaps be co-created and less the singular responsibility of Government. This requires firms to recognise the societal and environmental responsibilities they increasingly have and develop a greater level of empathy for the challenges facing politicians.
The complex political system in Northern Ireland means that agreeing priorities is not straightforward. Dealing with the practicalities of Brexit will require close collaboration to deal with an issue the two main parties have very different perspectives on. Co-production across departments and with external organisations may be the only way to make the boldest of policy choices.
The diversity and strength of Northern Ireland’s business base is considerable, and our ingenuity has navigated a challenging time remarkably well. EY’s Entrepreneur of the Year programme continues to showcase fabulous NI companies flourishing in the uncertain world we find ourselves in. Opportunities are plentiful despite the obvious challenges and disruption, the new Executive can help to establish the conditions in which these firms and the people working in them can reach their potential.
It is not about how much money someone gives you to solve your problems, it is about generating enough success that you don’t need the money in the future.