BLIC expenditure on trade, industry, energy and employment and regional assistance in the North should be reduced by at least 15 per cent between 2000 and 2005, according to the Northern Ireland Economic Council.

Spending should then be re-allocated to promote longer-run productivity growth in the economy, it says.

The council warns that to realise the recommendations in the latest economic development strategy for the North, Strategy 2010, credible timetables and clear unambiguous benchmarks must be introduced along with delivery mechanisms to ensure they are met.

"Otherwise it seems likely that failures in the 1990s will be repeated in the first decade of the next century," it says in a report on the lessons to be learned from implementation of economic strategy in the 1990s.

Spending cuts in trade, industry, energy and employment should be concentrated on selective financial assistance for both existing inward investors and indigenous firms. The council recommends that the average annual grant rate be reduced by at least 50 per cent over the five-year period.

The money should then go to areas designed to raise the economy's long-term productivity. Ways in which this could be done include more places in higher education, accelerating nursery school provision and reversing recent cuts to government-funded university research and development, it says.

Efforts to encourage investment in marketing, R&D, management development and training should be strengthened.

In the report, the council finds some agencies have performed better than others in implementing economic policy. LEDU, the small business agency, IRTU, the agency charged with increasing R&D and T&EA, the agency responsible for the labour market, all made progress in their areas.

But the council is critical of the performance of the North's Industrial Development Board which, it says, made "very limited progress" in implementing key elements of the Government's economic strategy.

It recommends that in future, the development agencies should publish annual reports setting out how they have complied with directions while it also suggests that the IDB board should include representatives from leading international firms and others familiar with best practice.

Regarding the suggestion that a single development agency be created, the council says it would have to be structured so that the success of agencies like LEDU and IRTU were not compromised but built upon and enhanced.