Minister's speech - Sub-Regional Economic Plan - 1 October 2024

Note: this publication may not reflect verbatim delivery by Minister Murphy.

Introduction

Leas-Cheann Comhairle

Today I am announcing a new strategic approach to economic development.

It is an approach that is locally-led, and that places regional balance at its heart.

The need for greater regional balance is clear.

Employment rates range from a high of 79.5% in Mid & East Antrim to a low of 65.4% in Derry City & Strabane.

Productivity, a fundamental driver of overall living standards, is 31% higher in Belfast than it is in Derry City & Strabane.

To date, the Department for the Economy has not had a coherent strategy for delivering regional balance.

The Department did not set regional targets for its economic development agency, Invest NI.

As confirmed by the Independent Review, Invest NI’s decision making was “centralised in Belfast”.

Its regional offices were “underutilised”, not “integrated” into the organisation, and “too modestly resourced”.

An important shift took place in 2015, when Councils assumed greater economic responsibilities.

This acknowledged the value of local areas leading their own economic development.

However, Councils cannot be expected to transform local economies on their own.

In order to turn the dial on regional economic performance, we need everyone pulling together as part of a coherent ecosystem.

I intend to establish that ecosystem.

Local Economic Partnerships

The new approach to economic development starts with local communities identifying their own priorities.

Councils will be asked to establish Local Economic Partnerships, bringing together central government, the business community, universities and colleges, local enterprise agencies, and civil society.

In order to minimize bureaucracy, existing partnerships could be modified to fulfil this new remit.

And Councils are free to come together to tackle common concerns, and to pool resources and expertise.

Partnerships will identify the main barriers to economic development and the priority interventions that will build the region’s value proposition.

These priorities will be continually updated, as circumstances change over time.

Interventions could involve for example support for local clusters, skills programmes tailored to local businesses, preparing more land for business expansion, the development of new start up and follow on units, the regeneration of empty buildings for business use, and key infrastructure projects.

My Department will recalibrate its programmes and budget to help meet these priorities.

For example, my Department is in the process of taking responsibility for the funding provided by the local Council to the City of Derry Airport.

In addition to recalibrating mainstream funding, I intend to support Local Economic Partnerships with dedicated funding of £45 million over the next three years.

Invest NI

Invest NI will put a new focus on regional balance and will be a driving force within Local Economic Partnerships.

Staff numbers in Regional Offices will be increased by an initial 40%.

Regional Offices will assume responsibility for managing local clusters and businesses with a turnover of up to £2 million.

A lack of available land for commercial and industrial use is a major barrier to development in a number of Council areas.

Invest NI will therefore deliver and finance a new Regional Property Strategy, which will be delivered through Regional Offices.

Property specialists will be recruited to develop land and property for business use.

Invest Headquarters will support Regional Offices, providing specialist advice and expertise, and coordinating with key public bodies such as NIE Networks and NI Water to ensure local needs are articulated and met.

Consequently, the whole of Invest NI, not just Regional Offices, will be reorientated towards developing local economies.

Crucially, I am setting a clear and ambitious bottom-line target for Invest NI to promote regional balance.

58% of the population is outside of the Greater Belfast Area.

Yet this area outside of Greater Belfast makes up 48% of the economy, as measured by Gross Value Added.

In order to help redress this imbalance, within three years 65% of the agency’s investments should be outside of the Belfast Metropolitan Area.

Delivering this target will require changes in organizational structure, decision-making processes, policy, practice and culture.

The Chief Executive of Invest NI has informed me that reaching this target will be challenging.

But he, his staff, and his Board are committed to serving the entire region and they will do everything in their power to deliver this target.

Conclusion

Leas-Cheann Comhairle

The approach I have outlined today involves a profound change in how we deliver economic development.

It starts with local communities working in partnership to define their own priorities.

It then builds an ecosystem to deliver those priorities.

The new structure will be operational from the start of the next financial year.

This is a challenging timeline given the extent of change involved, so I would ask everyone to get behind this approach in the spirit of collaboration.

Because it is only by working together that we can reverse historical imbalances, and deliver prosperity for all.