MINUTES OF THE THIRTy-Third meeting

ECONOMIC DEVELOPMENT FORUM, 13 DECEMBER 2007, CASTLE BUILDINGS

Present: See Annex 1.

Apologies: Sir Reg Empey, John Gilliland, Peter Gregson, Stephen Kingon, Patricia McKeown, Bob Stronge

Action Points agreed at 13 December Plenary: See Annex 2.

1 WELCOME, APOLOGIES AND MINUTES OF LAST MEETING

1.1 The Chair welcomed Members to the 33^rd meeting of the Forum in Conference Room B5 in Castle Buildings, Stormont Estate. He informed Members he would be departing around 11am for another commitment and that Stephen Quinn would assume the Chair.

1.2 He welcomed new attendees, Trevor Neilands, Jeremy Fitch and Tony Simpson.

1.3 He also noted that the minutes of the plenary meeting on 5 September had been agreed by members, by email, and posted to the EDF website.

2 MATTERS ARISING

Progress on September Action Points

2.1 The Chair referred Members to Paper 2 which outlined the progress made against action points from the plenary meeting on 5 September. He proposed (and it was agreed) that any queries would be raised through the EDF Secretariat.

ACTION: Members to contact the EDF Secretariat by 18 January 2008 if they have any queries on action points.

Varney Review

2.2 The Chair advised Members that Sir David Varney’s Review Report had not yet been published and invited DFP to provide an update.

2.3 Mike Brennan reported that DFP had not yet seen the final report but that officials had been in discussion with HMT officials. Based on these discussions, DFP is expecting that the report will conclude there should be no fiscal dispensation for Northern Ireland. Members were also advised that the report is likely to be published before Christmas.

2.4 In response to questions from Members, Mike outlined DFP’s understanding on why the Varney Report is expected to arrive at this conclusion. Some members expressed concern and disappointment whilst noting that the recent reported statement by the Prime Minister on this matter had given a clear indication of the likely conclusions of the Review. In particular, concern was expressed about HMT’s perceived assessment of the current state of and prospects for the NI economy.

3 DRAFT PROGRAMME FOR GOVERNMENT

3.1 Linda Wilson, OFMDFM, delivered a presentation that provided an overview of the draft Programme for Government (PfG). She highlighted the PfG’s cross cutting themes and priorities and explained that each priority cannot be pursued in isolation. The Executives view is that all priorities are essential if the conditions for economic growth are to be put in place and that the PfG is supported by 23 Public Service Agreements.

4 DRAFT BUDGET

4.1 Richard Pengelly, DFP, provided an overview of the draft Budget and reminded Members of the context in which the Budget had been set. He explained that the Budget underpins the key priorities in the PfG. Members were also advised that a number of consultation events had taken place and that these had shown that the public were generally supportive of the Budget. Changes between the Draft and Final Budget would involve a zero sum game.

4.2 Members were also provided with an update on funding for Innovation and informed that discussions are ongoing between a number of NI departments, HMT and the ROI Government. They were advised that final agreement on an Innovation funding package is expected in January and that eligible projects will be required to demonstrate a strong commercial focus and consistency with the Regional Innovation Strategy.

4.3 The Chair welcomed both the draft PfG and Budget. He also welcomed and encouraged widespread discussion and contributions to the consultation process, which Members were reminded ends on 4 January 2008.

4.4 The Chair drew attention to the key economic aim of halving the private sector productivity gap with UK (excluding the Greater South East) by 2015, and acknowledged that this is an ambitious goal. He stressed that the challenge is to find ways of turning the aspiration into reality. He also confirmed that the key Public Service Agreement (PSA) targets from a DETI perspective relate to Productivity, Employment and Tourism.

4.5 The DRD Minister, Conor Murphy, provided comments on the draft PfG and Budget and highlighted a number of key infrastructure projects. He noted that growing the economy was key to tackling wider social issues. He concluded that the targets proposed are realistic and achievable, but explained that all Departments are operating from a finite pool of finance and will have to make hard decisions.

4.6 Members welcomed the draft PfG and Budget and offered their congratulations to the Executive on a very solid piece of work. Members also noted that they were impressed with the speed with which the Executive had grasped the significance of economic growth to Northern Ireland’s long-term wealth and prosperity.

4.7 Members urged Ministers to ensure that the Executive continues to focus on the detail of how the goals and targets will be delivered. They also identified a number of issues of concern and sought clarification on various points. These included the disparity in GVA per head between Belfast and the North West; the need for funding for specific infrastructure projects; the impact of creating 6,500 jobs; the future of public sector jobs; and, in particular, the need to build skills capacity to attract FDI. In particular, Ian Crowe highlighted the need to address concerns over the A6 from east of Dungiven to Derry and the DRD Minister acknowledged the concerns.

4.8 In the discussion on the draft Budget, investment in Skills in Year 1 of the Budget period emerged as a key discussion point and a number of Members stressed the importance of ensuring that adequate funding was made available in the short term to address skills issues. Questions were also asked about funding for the Careers Strategy. Members stressed the key role which skills play in attracting FDI and emphasised that action needs to be taken now to address current skills shortages.

4.9 Members also questioned whether the budget will enable the achievement of the ambitious goals set out in the PfG and enquired if there was any flexibility in how budgets were spent. In response, DFP officials referred to steps that are being taken to improve the flexibility which departments have within departmental budgets.

ACTION: Members to provide comments on the draft PfG and Budget to OFMDFM and DFP, through the consultation process, by 4 January 2008.

4.10 Members also discussed the future role of EDF and it was suggested that the Forum needs to change its focus and provide a stronger challenge function if it is to be a useful tool for both government and business. In particular, rather than covering a wide range of issues at Plenary, it was suggested that EDF might focus on ensuring that actions are taken forward to address specific issues identified at Vision Sub-Group level.

ACTION: EDF Secretariat to arrange a meeting with the Chairs of the Vision Sub-Groups to discuss the role and agendas of EDF going forward.

DETI Minister leaves meeting and DETI Permanent Secretary takes over as Chair.

5 DRAFT INVESTMENT STRATEGY (ISNI 2)

5.1 David Gavaghan and Martin Spollen, Strategic Investment Board (SIB) delivered a presentation setting out the Executive’s priorities in the PfG and the linkages with the investment strategy’s six infrastructure investment pillars. Members were advised that ISNI 2 reflected a step change from ISNI 1 and is a solid, achievable strategy. In addition, Members were informed that the Capital Realisation Task Force was due to report on the 14 December and were provided with some detail on the Monitoring and Communication Strategy. In relation to this, Members were advised that work on the development of the strategy by DFP and OFMDFM is ongoing.

5.2 Members were also informed that Sub-Pillar investment delivery plans will be published by departments to complement the Investment Strategy and that feedback at consultation events had been largely positive.

5.3 The Chair of the Infrastructure Sub-Group, Jim McCusker, reported that the Sub-Group had held a recent meeting to discuss the Investment Strategy and presented the Sub- Group’s findings. He noted that the Sub-Group welcomed the proposals on ‘turn-around-times’ for planning applications but voiced a concern that care needs to be taken that these are not further delayed due to the reorganisation of local government. He reported that the Sub-Group welcomed the idea of health and care centres. However he noted that there was a lukewarm statement on the use of school sites for the location of other public services. He commented that the Sub-Group was disappointed with the lack of vision for 2018 and that it was not clear how ISNI 2 would contribute to the aims of the NI Economic Vision or the Sustainable Development Strategy. It was also suggested that ISNI 2 lacked a people focus. He concluded by noting that the Sub-Group would find it helpful to have sight of, and the opportunity to consider, the London Economics report, (used by SIB in the formulation of ISNI 2), in order to come to a definitive conclusion on priorities, including the high priority given to roads. To assist in the planning and delivery arrangements the Sub-group would like to follow up the London Economics report, the investment development plans and the outcome of Capital Realisation Task Force.

ACTION: SIB to provide London Economics Report to Infrastructure Sub-Group.

5.4 Members discussed ISNI 2 and welcomed the change in focus from ISNI 1 to ISNI 2, reflecting an increased emphasis on economic investment. Members highlighted the need to ensure that maximum value is captured from the realisation of capital assets, noting that the timing of the sale of assets will need to be carefully controlled to maximise proceeds.

5.5 The Chair noted that a number of recurring topics/themes had emerged during the discussion on the draft PfG, Budget and ISNI2. These were: a need to address short term Skills supply issues; the attraction of FDI; the priorities in ISNI 2; and the ability of the Public Sector to deliver the enhanced capital programme. It was agreed that a brief response would be provided by Department officials to the issues raised and the discussion would be opened to members at a later date.

Skills

5.6 Aideen McGinley, DEL, addressed a number of points raised by Members in relation to immediate skills priorities, DEL’s budget settlement and cross departmental PSA targets. She acknowledged that particular challenges existed in addressing issues such as funding for adult apprenticeships, budgets for FE and HE, funding for Innovation, and the rising cost of student support.

5.7 Members re-affirmed their concerns on short term skills shortages, suggesting that immediate, funded interventions were needed. The HE and FE members also expressed concerns about the draft DEL budget, especially in year one, and, in relation to Regional Colleges, Members were reminded these were being reorganised and that this may result in further budget pressures. It was also suggested that a discussion between DEL, Invest NI, the FE Colleges and the business sector organisations would be useful to clarify the short to medium term needs of the business community.

5.8 Additional funding for PhD studentships was also discussed and Members expressed concerns that the allocation of the Innovation funding across a number of Departments might dilute its impact. Clarity was sought on the types of projects to be considered under the funding for Innovation. Further information was also requested in relation to Capital Funding for Higher Education. The lack of resources for conversion courses was also highlighted.

ACTION: DFP to provide further information on the types of projects to be considered under the Innovation Fund and on Capital Funding for Higher Education.

5.9 Will Haire indicated that, like all other Ministers, the DE Minister had to take some tough decisions in relation to priorities in education allocations. He noted that some of the key challenges for DE had been identified by Members, namely, the promotion of STEM subjects and of basic skills.

FDI

5.10 Jeremy Fitch indicated Invest NI’s agreement that an appropriately skilled workforce is crucially linked to the attraction of FDI. In particular, he pointed out that the skills set of the Northern Ireland workforce is a key selling point for potential inward investors. He assured Members that Invest NI and DEL are working in partnership to continue to attract FDI, by seeking to ensure that NI has a relevantly skilled workforce. He noted that, in turn, this will increase the number of high skilled, well paid jobs, especially in the field of Information Technology and Financial Services sectors.

5.11 Members welcomed the responses and comments from Departmental and NDPB officials and emphasised that availability of the requisite skilled labour will be key to the future attraction of FDI. It was noted that Invest NI should continue to focus on raising entrepreneurial activity in NI as well.

2018 Vision and Priorities in ISNI 2

5.12 SIB officials stressed that ISNI 2 represented a significant step change from ISNI 1 i.e. £15 billion to £25 billion. They explained that some further investigation might be necessary in relation to the population assumptions underpinning the ISNI and that this may have implications on infrastructure investment.

ACTION: Members to provide suggestions on the vision and priorities for ISNI 2 directly to SIB.

Public Sector ability to deliver

5.13 David Sterling advised Members that DRD has plans in place for a major investment in infrastructure and highlighted the department’s strong track record in delivering such investment. He noted, however, that there was no room for complacency. Members commented that the availability of suitably skilled labour issue may also impact on the delivery of the infrastructure projects set out in ISNI 2. David acknowledged this was a concern, citing difficulties which DRD has encountered in attracting engineers to work in Roads Service.

6 DRAFT DETI CORPORATE PLAN

6.1 The Chair advised Members that the structure of the draft Corporate Plan was very closely aligned with the draft PfG and PSA framework. A first draft of the plan (Paper 6) was being presented to the ETI Committee (on the 13 December) for its consideration. He invited Members to consider this first draft and asked them to provide their initial comments, which would be considered before the plan is published for formal public consultation.

ACTION: Members to provide views to EDF Secretariat on the draft DETI Corporate Plan no later than 18 January 2008.

6.2 Members broadly welcomed the draft DETI Corporate plan, noting that it was a clear and succinct document. They queried whether it would be useful to break down the overarching productivity target into milestones and were advised this suggestion would be considered.

6.3 Aideen McGinley drew attention to a number of cross cutting PSA targets, noting that DEL would be working closely with DETI on these targets. She advised that DEL’s draft Corporate Plan will be published in advance of the next EDF Plenary and will be circulated to Members for consideration.

ACTION: DEL to provide EDF Secretariat with a copy of the draft DEL Corporate Plan for circulation to Members in advance of March meeting.

7 VISION SUB-GROUPS

7.1 Members noted Papers 7, 8, 9 and 10, which provide an overview of the current work of each Vision Sub-Group and also outline each Sub-Group’s plans for the next six to nine months.

8 ANY OTHER BUSINESS

Press Release

8.1 Members agreed to issue a Press Release setting out that the majority of Members were supportive of the draft PfG, Budget and ISNI 2. Members stressed that this should note the importance accorded by Members to an appropriately skilled workforce and the need to ensure levels of investment in the short term were adequate to support the goals relating to raising productivity and FDI.

ACTION: EDF Secretariat to draft a Press Release and clear this through the Sub-group Chairs.

Date of Next Meeting

ACTION: EDF Secretariat to contact Members to confirm 6 March 2008 as the date for the next meeting.

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ANNEX 1

EDF MEETING – 13 DECEMBER: ATTENDEES

LIST OF ATTENDEES
Nigel Dodds MP MLA	Minister DETI (Chair)
Conor Murphy MP MLA	Minister DRD
Frank Bryan	IoD
Declan Billington	CBI
Mark Sweeney	NICCI
Bob Barbour	Centre for Competitiveness NI
Wilfred Mitchell	Federation of Small Businesses
Seamus McAleavey	NICVA
Jim McCusker	NIC/ICTU
Peter Bunting	NIC/ICTU
Clarke Black	Ulster Farmers Union
Prof Gerry McCormac	Higher Education – QUB
Prof Richard Barnett	Higher Education - UU
Trevor Neilands	Further Education
Peter McNaney	SOLACE
Ian Crowe	Londonderry Chamber of Commerce
Jeremy Fitch	Invest NI
David Gavaghan	SIB
Martin Spollen	SIB

OFFICIALS
Stephen Quinn	DETI
Aideen McGinley	DEL
Will Haire	DE
Richard Pengelly	DFP
Michael Brennan	DFP
Linda Wilson	OFMDFM
Tom Reid	OFMDFM
David Sterling	DRD
Tony Simpson	DETI
Stephen Moore	DETI
Yvonne Curran	DETI

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ANNEX 2

ACTION POINTS AGREED AT 13 DECEMBER PLENARY

ISSUE	ACTIONS ARISING	LEAD RESPONSIBILITY	TIMESCALE
Progress on September Action Points	Members to contact the EDF Secretariat by 18 January 2008 if they have any queries on action points.	EDF Members	18 January 2008
Draft PfG and Budget	Members to provide comments on the draft PfG and Budget to OFMDFM and DFP, through the consultation process, by 4 January 2008	EDF Members	4 January 2008
Role and Agendas of EDF	EDF Secretariat to arrange a meeting with the Chairs of the Vision Sub-Groups to discuss the role and agendas of EDF going forward.	EDF Secretariat	By end of February 2008
Draft Investment Strategy	SIB to provide London Economics Report to Infrastructure Sub-Group.	SIB	18 January 2008
Innovation Fund