Esmond Birnie: Stormont MLAs need to use public money in Northern Ireland well, not just demand more funding from London

It is available for consultation until November 4.

It would be churlish of me, as an economic commentator, not to note that the executive have correctly acknowledged that raising a hitherto very low level of economic productivity (low levels of output per worker compared to Great Britain or the Republic of Ireland [the latter even allowing for the great difficulties with southern Irish GDP statistics).

That all said, in a perhaps understandable nod to there being a set of immediate pressures and then also a set of long term priorities, the executive has chosen a rather complex structure to provide a framework for its policy.

There are to be the nine themes (as announced last week) which indicate what matters most today.

They are:

• To grow a competitive and sustainable economy

• Deliver affordable childcare

• Cut health waiting times

• End violence against women and girls

• Better support for children and young people with special educational needs

• Provide more social, affordable and sustainable housing

• Safer communities

• Protect Lough Neagh and the environment

• Reform and transformation of public services

Alongside that, and opening up into the long run, there are to be the three missions of:

• People (giving everyone good life opportunities).

• Planet (eg green growth)

• Prosperity (eg increasing economic productivity).

How well the nine themes and three missions (plus a cross-cutting commitment to ‘Peace’) will marry up in practice remains to be seen.

Focusing on the emphasis raising productivity, the executive commits to a multi-million pound set of investments (what does that mean in practice?)

It also commits to prioritising high productivity sectors but I wonder if there is really acceptance that sometimes there could be short run trade offs between job creation and productivity. Also, the Department for the Economy (which has just published its three year Business Plan) will be trying to balance raising productivity with greater sub-regional balance.

Sometimes investment, particularly inward investment in business services, will gravitate to Belfast which has the ‘natural’ advantage of a large labour pool. Efforts to spread investment could actually blunt productivity improvement and could prove to be futile in the long run. In any case, the current state of ‘regional balance’ is actually more complex than perceptions of an East-West divide would suggest: according to the Department for the Economy’s Business Plan Mid Ulster is the area with the highest employment rate.

I also note that whereas the executive now has web-based Dashboard to illustrate progress in terms of the three missions, the Mission for Prosperity does not appear to include an indicator relating to productivity.

The draft Programme for Government understandably includes a commitment to build more social houses. They suggest His Majesty’s Treasury approval will be sought to allow the housing executive (NIHE) to borrow more. How feasible that will prove remains to be seen (would HM Treasury allow NIHE to borrow without counting this against other borrowing by NI government?).

There may be other approaches which could be taken to NIHE structure and status which would allow it to borrow from the private capital markets.

The draft Programme for Government points to an upcoming Investment Strategy. That is also very important and something to look forward to.

Regarding funding public spending in Northern Ireland, the draft Programme for Government perhaps over does what has become something of a mantra amongst NI political parties, “we must have fair funding… we don’t have enough funding”. There needs to be a sense of balance about this.

Taking the last 30-40 years as a whole it is far from clear that Northern Ireland has been persistently under-funded. We may not have made the best use of the money which we had. Hitherto not enough attention has been paid to achieving efficiency through the transformation of public sector delivery.

• Dr Esmond Birnie, Senior Economist Ulster University Business School