Foreign investors who were keen to set up in Northern Ireland are going elsewhere because the fall of the Executive means money meant to support firms cannot be released.
he Belfast Telegraph understands Northern Ireland is losing the interest of a number of international companies because Invest NI cannot free up funding.
Support for job and skills creation by local businesses is also being held up.
Mark O’Connell, of investment advisers OCO Global, said he was aware of two US firms that had been keen to invest in Northern Ireland, only for their projects to stall over funding, with the companies forced to consider alternative locations.
It is understood that one US businesses that wanted to set up here instead opted for Wales, with a second company choosing the Republic.
Mr O’Connell said: “Generally, most mobile investment projects shortlist two or three options. If and when the preferred one is knocked out, they revert to option two.”
The Department for the Economy was already short of funds because of the loss of European money from Brexit.
Sharon Hetheringon, the department’s finance director, previously told a Stormont committee that the loss of £23m a year in support from the European Regional Development Fund would hit Invest NI badly.
It could mean the loss of up to 6,000 potential jobs and lost investment of up to £584m, she explained, citing figures from Invest NI.
The development agency’s financial position deteriorated further following confirmation that Stormont’s draft budget could not be passed because of the collapse of power-sharing.
Asked about lost US investment projects, Invest NI maintained that it was “not aware of the projects you refer to and does not comment on rumour or speculation”.
A spokeswoman added: “Invest NI has been working closely with the Department for the Economy to consider the implications of the draft budget position. No final decisions have been made at this stage and we await clarification of our 2022/23 budget allocation.”
Finance Minister Conor Murphy announced on Tuesday that his draft three-year budget could not be introduced.
It had been out for public consultation when the DUP withdrew Paul Givan from the first minister’s position as part of its protest against the Northern Ireland Protocol.
Mr Murphy told the Assembly he had been advised that the Executive had to agree the budget for it to pass.
A person affected by the stalemate, but who wished to remain anonymous, said: “What’s clear is that Invest NI was given clear direction in December by the department not to execute any new projects or initiate any new funding, including any rollover projects.
“There are other projects which it looks like have been lost where American companies, in particular, have decided that they can’t wait any longer and have gone to the South or gone to Wales.
“What’s clear is that the failure of the Executive means the budget situation is even worse because the rollover situation will leave them even further short of where they would be.”
Andrew Webb, chief economist at business advisory firm Grant Thornton, added: “Invest NI works diligently to support businesses growth in the context of an uncertain economic backdrop that includes the pandemic and Brexit.
“I think it is a shame that businesses and Invest NI, all working in good faith, should find themselves in a situation where political uncertainty has bled into our credibility as a place to grow a business.”
SDLP Foyle MLA Sinead McLaughlin said economic activity in the north-west was also being held up.
“I have had angry complaints from two businesses that understood they had received agreement for investment projects in Derry but which they now believe are no longer being supported by Invest NI for budget reasons” she added.
“One of these is for a very large investment that is of enormous importance to Derry.
“The other is a new-start investment from a company coming to the city for the first time.
“I have arranged to meet with Invest NI precisely because of my serious concerns around this.”
The Department for the Economy did not return a request for comment.
