| 10°C Belfast

Invest NI to return £15m of unspent investment grants

A business lobby group has said it is “disappointed” that Invest NI will return to government coffers over £15m allocated as grants for companies investing in Northern Ireland.

The agency, which has a budget of £185m, is understood to be giving £17.5m back to the Department of Finance and Personnel (DFP) following a routine examination of its expenditure.

A spokeswoman for the Department of Enterprise, Trade and Investment (DETI), said it had notified the DFP of some “reduced requirements” as part of the October monitoring exercise in which all departments participate.

A “significant proportion” of those were from Invest NI, she said, as slower-than-expected economic recovery had dented business confidence.

“As a result companies have not submitted grant claims in the volumes that Invest NI had originally anticipated.

“There is also evidence of companies slowing down planned investment plans, and in some cases postponing projects.”

Speaking at a retail conference in Belfast yesterday, First Minister Peter Robinson said: “What I am hearing is that businesses cannot get further funding from the banks to continue their projects.”

The Institute of Directors (IoD) said it was “disappointed” about the underspend. Director Linda Brown said it found it “difficult to understand” why Invest NI could not reallocate the funding or carry the funds into next year.

“However, if the money must be surrendered, we trust that the Executive will see fit to allocate it to projects that will support economic growth such as skills development.”

Representatives of Invest NI and DETI are to give evidence to the Assembly’s enterprise committee today on the matter.

Committee chairman and SDLP MLA Alban Maginness said: “Clearly there’s an underspend by Invest NI and that’s reflective of the current uncertainty of the economy — but we don’t know much more than that.”

Northern Bank chief economist Angela McGowan said it was “no surprise” that attracting foreign investment had proved difficult — but she said job creation could also come from “enterprise, innovation and skills”.

“Foreign investment is obviously important for job creation but it is only one part of a large equation,” she added.