Should Stormont appoint a new Economic and Infrastructure Expert Panel to put Northern Ireland on a pathway to economic success?

Infrastructure Minister, Liz Kimmins, has just made a shock announcement to the Assembly to send forensic accountants into NI Water to investigate a potential budget overspend. The short-term and long-term funding of the water industry and infrastructure is clearly becoming a political ‘hot potato’!

Back in 2020 the then Infrastructure Minister, Nichola Mallon, published a report from the Ministerial Advisory Panel on Infrastructure detailing proposals for new Infrastructure Commission. In the same year Economy Minister, Diane Dodds, announced a reconstituted Economic Advisory Group to provide strategic advice on how to regrow our economy as we dealt with the COVID-19 pandemic.

Ever since the problems have been stacking up and Stormont ministers now face a housebuilding crisis, a dilapidated public drainage system, historically high economically inactivity rates and the risk of punitive tariffs from the US.

To help tackle these serious challenges should Stormont create a new Economic and Infrastructure Panel to help advise ministers on a way forward?

The linkage between the investment in public infrastructure and economic growth is well established. A report published by the Global Infrastructure Hub, which is part of the World Bank, highlighted the vital role of infrastructure in economic growth and development. The report stated that:

‘Infrastructure investment has a strong impact on economic growth, as evidenced by a 2020 GI Hub study that found the economic multiplier for public investment (including infrastructure) is 1.5 times greater than the initial investment in two to five years – much higher than other forms of public spending.’

This report concluded that government investment in infrastructure is ‘more effective than other types of public spending in increasing economic output’. The OECD has also published various reports concluding that the UK has spent less on infrastructure compared to other OECD countries over the last few decades.

Nowhere is this more acute than in Northern Ireland. We have the proposed A5 Western Transport Corridor bogged down in public inquiries, legal challenges and inaction for over a decade, our wastewater drainage system is barely beyond repair as housing and commercial developments are at a standstill, but we have a critical skills shortage in the local construction sector, despite having the highest employment inactivity rates in the UK.

Something is going seriously wrong. Why have we got the lowest productivity and the highest economic inactivity across the UK and Ireland?

To answer this question, we probably need to delve into our troubled past, the impacts and legacy of the conflict, a stop-start government at Stormont and an Executive intent on blaming everyone else and choosing to make populist policy decisions at the expense of the more difficult ones.

But it really doesn’t matter how we got here, what we need to concentrate on is how we get ourselves out of this mess. We need to give our younger people some greater hope for the future.

To tackle the infrastructure deficit there have been previous calls for a new Infrastructure Commission – similar to the National Infrastructure Commission in England which is chaired by civil engineer Sir John Armitt CBE.

A new commission would need to gain cross-party support and provide technical and strategic advice to ministers on the long-term planning and development of our relevant infrastructure. It would also need to take an out-come based approach so that it could demonstrate the correlation between the successful delivery of an infrastructure project and the benefit to NI and its population.

There is recognition at Stormont that we have infrastructure problem. Last week Infrastructure Minister, Liz Kimmins, launched a new public consultation on developer contributions for wastewater infrastructure which I have previously written about: Developer Contributions won’t solve the Housebuilding and Wastewater Crisis… – Slugger O’Toole and today she made the shock announcement to the Assembly that she was sending forensic accountants into NI Water to investigate a potential budget overspend.

Also, despite the initial reaction from housebuilders and developers that they don’t want to pay an additional levy for a drainage connection I believe that most developers now accept that an additional charge is now inevitable. Their counterparts in England and Scotland don’t pay these charges as the water infrastructure there is largely funded from customers water bills.

If developer contributions are brought in they would help more housing and commercial properties get connected to the public drainage system, but they won’t resolve the wider problems caused by decades long under-investment in our water industry.

This wastewater crisis clearly demonstrates what happens when we fail to make the crucial decisions on upgrading and constructing new infrastructure. Businesses and economic growth are negatively impacted, high skilled jobs are lost to other regions and our young people start to see their future elsewhere.

The most galling thing about the situation that we find ourselves in is that this was all entirely preventable. If politicians at Stormont had received the correct advice and had acted upon it, we could have had an entirely different outcome.

But not everything is gloom and doom. Data from the Northern Ireland Statistics and Research Agency (NISRA) indicate that NI’s economic output is now 9.7% higher than the pre-pandemic level in 2019. This shows that our businesses are resilient despite all the current problems but just imagine what things could be like if we were to unlock our full economic potential.

This brings me to my main point. Would a new Economic and Infrastructure Panel at Stormont help advise ministers on the best way to set Northern Ireland on a pathway to economic success?