THE NORTHERN economy is facing a crisis and must make a significant step change, the author of an economic review has told a committee of Assembly members.
Prof Richard Barnett said the scale of the public sector, government spending cuts and the scaling back of EU funds posed challenges to the local economy.
Calling for a programme of policy regeneration with a new emphasis on research and development, he appealed for radical reform.
Prof Barnett, author of the Stormont-commissioned Independent Review of Economic Policy, warned: “We are actually facing a potential crisis unless we change. Can we change before getting into the crisis, where we are going to have tighter public expenditure?”
He added: “We are facing that crisis. Can we actually anticipate that and move on because other countries are meeting the crises and then changing?”
He told the committee Northern Ireland was not the special case it once was within the EU, with more attention now going to the accession states. Added to this was the fact that neither the British nor Irish governments had funds on the same scale as before to help build a vibrant Northern economy.
“There is a danger if we think if we make a special case we will carry on being treated as something special,” he said. “Those days are over. With the EU and the other countries coming in we are not that special and London and Dublin simply don’t have much money to give us in any case.”
Recalling recommendations made in his review document, Prof Barnett called for a single Stormont department to take control of economic policy.
“You need a committee of the Executive on the economy that actually discusses and formulates policy,” he said.
“It is a demonstrative effect as much as everything else, it shows that this is important here . . . that this is discussed at the highest level.”
Economies elsewhere usually made a policy step change at times of great challenge, he said. The current crisis also represented opportunities for Northern Ireland.
Prof Barnett’s review of economic policy has been welcomed by Industry Minister Arlene Foster, who has put his recommendations out for six weeks’ consultation. She told The Irish Times she intends to bring a policy document to the Executive shortly after the consultation ends.
The Barnett report criticises the strategy of the main development agency InvestNI.
It has spent some £1 billion over the past seven years since its foundation. Prof Barnett is urging the case for knowledge-based industries to be attracted to Northern Ireland in preference to low-wage and highly mobile employers who migrate easily to lower-cost countries.
