How NI cities are missing out on hundreds of millions of investment

28 Feb 2017 Nick Garbutt    Last updated: 28 Feb 2017

Paul Givan: retained regeneration powers

Northern Ireland is missing out on hundreds of millions of pounds of regeneration money, partly as a result of the refusal by Stormont to devolve power to councils. 

Across the UK the British government is pumping huge funds into local authorities as part of a strategy to regenerate cities.

The “City Deals” strategy is based on four core principles, to:

  • put cities in control of the economic opportunities and challenges they face as a city
  • work with a city’s wider metro area – encouraging deals across the wider economic area will increase the ‘scale of deal’, meaning City Deals will reach more people through a wider geographical reach
  • work across local enterprise and local authority boundaries, sectors, and professions – bringing together governments, cities, neighbouring authorities and local business leaders
  • give real power to city authorities so they can create economic growth

The sums on offer are vast and not confined to England. For Aberdeen, the UK Government and Scottish Government are jointly investing up to £250m whilst Aberdeen City Council, Aberdeenshire Council and local partners are committed to investing up to £44m over the next decade. 

Glasgow is getting a £1.13 billion infrastructure investment fund, which is estimated to deliver around 29,000 jobs in the city region and lever in an estimated £3.3 billion of private sector investment. There are similar arrangements in place for both Cardiff and Swansea.

It is important to note that in the other devolved regions significant money is being supplied over and above that provided through the Barnett formula.

Yet not a penny has been received by Northern Ireland’s cities, and there appears to be no appetite either at Stormont or Westminster to address the disparity.

Instead regeneration powers have become the subject of a power grab.  

Shortly before 4pm on 22 November of last year the then Communities Minister Paul Givan made a statement to the Northern Ireland Assembly.

He announced that he was not going to devolve regeneration powers to local authorities as had been planned. Instead he was to keep this responsibility to himself. His rationale was twofold: the new Programme for Government, meant that departments now need to work in a “joined up way” . He said: “It is my assessment therefore that the new context calls for a new direction of travel. I want my Department to be at the forefront of that change, using all the powers and resources at its disposal to achieve the outcomes and the ambition that the Executive have for our society, as set out in the Programme for Government.

In the debate that followed he added: “Let me be clear: the end users of all these services do not differentiate between the ratepayer and the council delivering them or the taxpayer and Stormont delivering them; they want services to be delivered in the most effective and efficient way possible.”

Needless to say this is not a view shared by many local politicians.

Councillor Tim Attwood, SDLP leader on Belfast City Council said: “This is about the vanity of Ministers, wanting to make good news announcements and civil servants who don’t want change, especially when it means losing responsibility. “

And yet in Mr Attwood’s view local authorities are much better placed to fund regeneration initiatives because the borrowing rules which apply to them mean they have much greater flexibility in raising funds and spending them than government departments.

“Belfast City Council was a basket case for 40 years, but for some time now we’ve had a good set of party leaders who are prepared to work together on projects they can agree on.”

He cites the extension of the Waterfront Hall. Investment in high quality conferencing facilities boosts the city’s economy by attracting more visitors, which in turn leads to more hotel development and greater spending in the city’s bars, restaurants and retail outlets.

The Westminster government believes that devolving more economic power to cities will be transformative. Stormont is going in the opposite direction, centralising regeneration in order to promote more “joined-up” working. It is hard to square the circle if we want more Westminster investment: the City Deals are predicated on giving more power to cities rather than taking it away. They are formal agreements which empower but also give responsibility. It is difficult to imagine such agreements being arranged for our cities whilst the responsibility rests elsewhere,

The irony, of course, is that the Department has retained regeneration powers just as Northern Ireland is entering a period of political uncertainty.

An unintended consequence of Mr Givan’s decision is that although his old department may have regeneration powers, it will struggle to use them without an effective government in place.

If we end up with Direct Rule that will mean that key decisions about the regeneration of the economy will be made, not by people who are close to communities and understand the economies and skills sets in their local areas, but by people who are elected elsewhere and do not.

In the meantime cities in England and Scotland and Wales will flourish thanks to massive investment projects. It is hard to see how Northern Irish cities can compete with that.

It is also important to note that councils have moved on from the bad old days. They are not perfect, for sure, but they do function, which is more than can be said for the Executive at the moment. Devolving power closer to communities would be one answer to the looming democratic deficit, in the case of regeneration, however, that is not an option.

As cities elsewhere power ahead we will be left behind, unable to compete. Even if a government is formed, without the extra cash City Deals would provide, it will struggle to match what is being funded elsewhere.


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