Belfast Telegraph

Assembly dysfunction has highlighted the true potential of councils

Economy Watch

Closed for business: The gates being shut at Stormont has opened the door for councils to tackle economic challenges
Closed for business: The gates being shut at Stormont has opened the door for councils to tackle economic challenges

By Andrew Webb of Baker Tilly Mooney Moore

in an earlier column, I've predicted that this would be the year that our local councils become the driving force in economic development. Working closely with councils feels like a parallel universe to the one we see at Stormont - one where multi-party agreements are achieved with relative harmony and cohesive policy emerges.

This is most welcome because many of the long-standing challenges that Northern Ireland faces (eg, low levels of entrepreneurship, unacceptable levels of poverty, long-term economic inactivity, ensuring sufficient skills pipelines, etc) fall within the sphere of influence of our councils.

Councils are increasingly well versed in recognising the challenges the economy faces. They listen. They plan. Then they act. The listening and the planning has been extensive. The action phase now has to be purposeful and productive.

My sense that councils are primed and ready to step into an economic development leadership role was reaffirmed at a recent event run by NILGA, the representative body for the 11 councils here. The theme was 'Driving the economy forward through our councils' and the mood in the room was one of ambition and determination to see councils deliver more. It was interesting to note from contributors that our councils, despite recent devolution of powers to them, enjoy fewer responsibilities than in many other jurisdictions.

This prompts many questions about our model of governance - is our Assembly hogging policy levers that would otherwise be delivered at a council level and how 'local' is still practical in a population of less than two million people? Does delivery by 11 councils lead to duplication and inefficiency, and hold back truly transformative economic development? The longer the Assembly remains dysfunctional, the louder I would expect these questions to become.

If, as I believe, our councils are truly going to step forward to be the drivers of economic development, I thought it useful to focus my Economy Watch contributions at a more localised level and begin a series of thematic articles to track economic performance across a range of themes amongst our councils.

When it comes to entrepreneurship, our council areas are a diverse bunch. Levels of entrepreneurship here are well documented as being low in comparison to other regions. Since the review of public administration delivered new councils, they have had more responsibility for economic development. A key element of that is that they are now responsible for delivering the business start programme 'Go For It' and promoting entrepreneurship.

Across our councils, there is a broad mix of entrepreneurial appetite. The Global Entrepreneurship Monitor (GEM), an international project by Aston Business School that measures entrepreneurial activity recently released a NI edition.

It revealed interesting findings. For example, when the GEM study was first undertaken in the early 2000s, there was little divergence in entrepreneurial activity across NI. Since the recession at the end of the 2000s, divergent trends have emerged.

Following a surge from about 2009-10, Mid Ulster is now the entrepreneurial capital of NI with just shy of one in 10 adults involved in early-stage entrepreneurial activity. Mid Ulster is around three percentage points higher than the NI average, followed by Causeway Coast and Glens, Newry, Mourne and Down, Fermanagh and Omagh and Mid and East Antrim as councils that report entrepreneurial activity above the NI average.

Fermanagh and Omagh's performance is striking as it was languishing at the bottom of the pile in the 2012-14 period. Derry and Strabane, which had managed to climb above five other councils, has returned to the bottom of the league in what is proving to be a reasonably volatile measure.

In seeking to understand why people here are motivated to become entrepreneurs, the findings from the GEM report suggest that opportunity (pull factors) are far outweighing necessity (push factors). That finding would be consistent with the strength of the labour market in recent years which has added around 60,000 jobs since the depths of the recession.

The age profiles of people engaged in entrepreneurial activity also throws up some interesting differences across councils.

The GEM report looks at rates for 18-29 year olds and 30-64 year olds. For Northern Ireland as a whole there is little difference in the entrepreneurial activity of two age groups. Across councils, the most noticeable differences are in Derry City and Strabane where the TEA rate of 18-29 year olds is around two fifths that of 30-64 year olds, and conversely, in Mid Ulster where the TEA rate of 30-64 year olds is 150% that of 18-29 year olds.

Entrepreneurship matters more than ever across our council areas. As Brexit uncertainty places a cloud over future prospects for inward investment, and as about 80% of FDI projects go to Belfast anyway, entrepreneurship is vital to local wealth building and delivering on economic growth ambitions.

In next week's Economy Watch, we hear from Ulster Bank chief economist Richard Ramsey

Belfast Telegraph