Tina McKenzie: How local government can help out businesses
The business community in Northern Ireland is facing unprecedented challenges. We have found ourselves at the crux of the ongoing Brexit negotiations, as the UK and the EU grapple over the complexities of how the Irish border will be navigated. This uncertainty is no doubt impacting business confidence across the island, hampering local entrepreneurs and potential investors.
The latest employment figures present a complex picture of low unemployment and troubling levels of economic inactivity, people of working age not in work or seeking employment.
There is a huge chasm between the rate of economic inactivity in NI at 28% compared to the overall UK rate at 21%.
If this is not addressed it will cause significant issues for businesses who require access to skills and labour, and will also have wider social implications.
However, it's certainly not all doom and gloom for the NI economy. The Quarterly Employment Survey for Q1 2018 demonstrated that private sector jobs increased over the quarter to their highest level, representing significant progress as we look to rebalance the economy.
SMEs in NI employ more people than all larger businesses and the entire public sector combined, so have a key role to play as we look to further develop the local private sector. With that in mind, it's crucial that they are given the necessary tools and support to thrive in the current business environment.
Government in Northern Ireland has a key role in creating the right conditions for business to prosper. However, in the continued absence of a functioning Assembly and Executive, local government has an increasingly important role to play in fostering a positive business climate. Previous FSB research has shown that there are thousands of SMEs in each local council area, spread right across Northern Ireland.
So what do businesses want to see from local government? A streamlined, efficient, planning system which uses common sense and enables business growth and the development of local communities. Planning issues are consistently identified by FSB members as a major barrier to their development, whether it's change of use, improvements to their premises, or building new developments. Unfortunately, when we speak to colleagues in GB, their experiences of planning are typically more positive than we experience locally. Planning authorities should ensure that economically important local applications, such as those submitted by small businesses, are expedited as quickly and efficiently as possible.
Businesses also expect government to pay their bills promptly. Councils should ensure they follow best practice when it comes to prompt payment of invoices. The value of payments received from local councils is vital for the cash flow of small businesses. In the last financial year, councils paid 302,996 invoices worth £622.3m. On average, 48% of those invoices were paid by councils within 10 working days, against a target of 90%. Late payments from government can potentially force small businesses to the wall. While the FSB will publish the full details of their 2018 Prompt Payment Report soon, it is clear that some councils are not up to speed when it comes to paying businesses promptly.
Following the enhancement of local government powers as a result of the Review of Public Administration, councils have an increased role in economic development. NI has the lowest business birth rate of any region in the UK, with only a small margin separating our business birth and death rate. NI is a great place to start a business, but we need to support our entrepreneurs to get business ideas off the ground, to make them sustainable, and foster them into the global brands of the future.
Studies have shown that people who have undergone some sort of enterprise training are twice as likely to be engaged in entrepreneurial activity and councils can help by being valuable sources of business advice and support. With the 'NI Business Start Up Programme' now delivered at local government level, this provides the opportunity for councils to advance a culture of entrepreneurship, which can have a transformative impact on local communities, driving employment and creation of wealth.
These are just three asks of local government from the business community. Given the political vacuum, the new super councils must now realise their potential and support SMEs as they navigate the difficult economic terrain ahead.
- Tina McKenzie will address the NILGA agm on Thursday at Seagoe Hotel, Portadown