Invest NI in need of 'fundamental reform' - Archibald

» Caoimhe Archibald

"If we are to rebuild an economy in which everyone shares in growing prosperity, Invest NI must be transformed" - Caoimhe Archibald MLA

The Covid crisis has caused significant damage and disruption to the economy. As the region’s Economic Development Agency Invest NI should be at the forefront of protecting businesses and jobs. With a £100m budget and over 600 staff the organisation is certainly well resourced for the task.

One of the groups most in need of support is sole traders. As many do not operate out of commercial premises sole traders didn’t benefit from the grant schemes rolled out to ratepayers at the onset of the pandemic. The Finance Minister therefore allocated an extra £40m for Invest to create a Hardship fund for businesses that didn’t benefit from the grant schemes. However, days before the scheme was due to launch, it was announced that sole traders would be excluded. With this key group omitted, approximately £16m of the £40m allocated went unspent and to date there has been no support forthcoming for this group

While sole traders still wait for support, Invest launched the Business & Financial Planning scheme. It pays up to £8,000 for a consultant, who must be on Invest’s ‘approved list’, to develop a business plan for them. Given that the problem is a cash flow crisis brought on by a global health pandemic, it is unclear what benefit this will be to businesses. It is however a nice little earner for Invest’s approved consultants.

Another sector left behind is Social Enterprise. Invest’s disinterest in social enterprises led the Department for Communities to develop a scheme for the sector, despite this being outside its remit. Similarly the Department for Infrastructure has had to pick up taxi drivers due to Invest’s unwillingness to assist.

The problem dates back to Invest’s creation in 2002. It merged the IDB which had a remit for large companies and FDI, and LEDU which grew small firms. However the new organisation’s strong focus has been on the function previously carried out by IDB. Client companies and consultants are well catered for but there is less interest in those outside the golden circle.

That Invest’s role is to serve the whole of the economy is a concept the agency has long struggled with. Regional economic balance is an agreed objective of the Executive and enshrined in its Programme for Government. There is a huge international literature on how economic development agencies can stimulate employment in deprived areas and promote regional balance. Yet Invest barely pays lip service to the very notion that regional economic balance is an objective it can and should actively contribute to.

It would be easier for Invest to defend its record if it had delivered high rates of economic growth. Yet before the emergence of the Covid pandemic the north had the lowest growth rate and lowest productivity on these islands. Invest NI has therefore managed to combine low growth with a small set of interests benefitting from that growth. Covid has further exposed Invest’s narrow focus on favoured companies and consultants. If we are to rebuild an economy in which everyone shares in growing prosperity, Invest NI must be transformed.