£1.6bn for capital spending the one budget bright spot
Investing in our infrastructure puts in place the foundations for future economic prosperity. New roads, new bridges, new telecommunications and energy networks and other investments create jobs and improve our competitiveness as a country. Our ability to provide both short and long term boosts to the Northern Ireland economy were seriously hampered by the crude 40% cut to our capital budget inflicted by the Coalition Government.
Thankfully, things are changing.
This year the Executive will allocate £1.6bn of infrastructure spend to projects. This brings us back to pre-recession levels and indications from HM Treasury are positive that the level of capital expenditure will continue to increase. Capital expenditure is the one bright spot in the 2015/2016 budget.
Increasing quantities of capital to spend on our infrastructure are welcome but more money alone will not be enough.
We need to reform how we deliver infrastructure so that the success of schemes like Titanic Belfast, the A4, the South West Acute Hospital and the new Ravenhill Stadium are built upon in the future.
I am sensitive to the criticisms contained within the CBI's recent Infrastructure – Investing For Our Future report. Major public sector capital projects do need to materialise much quicker and we must give the industry more certainty about what our investment intentions are. It's also my responsibility to ensure we always get best value for money.
In an attempt to address those and other concerns, I tasked a sub-group of the Procurement Board to examine options for improvements. Having carefully considered their feedback, I now intend to recommend to ministerial colleagues that significant action be taken in three key areas; namely centralisation, prioritisation and creating a culture of delivery.
I believe that we must create a centralised construction procurement and delivery service within Central Procurement Directorate (CPD) inside the Department of Finance and Personnel (DFP) if we are to ensure that the opportunities that flow from rising infrastructure spend are to be optimised.
This new service will be responsible for the provision of technical advice, procurement, project management and contract management relating to all government building projects with the exception of social housing.
This includes projects such as government offices and health care facilities.
Responsibility for the ordering of projects will remain with the relevant departmental minister and civil engineering schemes like railways, highways and water treatment works will still be carried out by Translink, Roads Service and NI Water respectively because of their particular technical nature. As a first step towards achieving this aim, the Health Minister and I have agreed for the transfer of some health estates functions to CPD later this year.
A much more centralised approach to procuring and delivering construction building projects will reap the benefits of bringing together expertise and experience and aid in ironing out inconsistencies.
When I meet with members of our local construction sector, many have impressed upon me the importance of a clear pipeline of government projects so that the industry can prepare properly.
Equally, the failure of the Department for Regional Development to deliver the A5 road scheme as planned highlighted the absence of an agreed list of Executive infrastructure projects that we could instantly shift our focus to. So I will suggest to the Executive that we agree a portfolio of strategically significant projects, based on recommendations from my department and the Strategic Investment Board.
This will follow a 'zero-based' review of the priorities for infrastructure investments.
Projects should be reviewed on a quarterly basis to enable ministers to report on those projects that are of strategic importance. And departments should fully populate the Investment Strategy for Northern Ireland Delivery Tracking System.
This will enable the information it contains to form a regional infrastructure plan, improving the visibility of forthcoming projects to the local construction industry.
Making the most of these organisational and delivery changes will need a shift in how we in government operate in respect of infrastructure development.
I want to see a real and lasting change in how we do our business with DFP leading on a development programme for staff. This will enhance project management, commercial and contract management skills to support the creation of a 'delivery focused culture'.
More centralisation. Better prioritisation. And a culture change in government.
This road map towards better infrastructure can – if grasped by all of my Executive colleagues – ensure that we don't lose the opportunity created by increased capital spend to improve the economy and the prospects of our people.
Simon Hamilton is Finance and Personnel Minister