MINUTES OF THE THIRTy-SEVENTH meeting
ECONOMIC DEVELOPMENT FORUM, 4 DECEMBER 2008
STORMONT HOTEL
Present: See Annex 1.
Apologies: Conor Murphy MP, MLA, Jim McCusker, Prof Peter Gregson, Bro McFerran, Bob Barbour, Will Haire, Leo O’Reilly, Peter McNaney, Seamus McAleavey, Stephen Kingon.
1 WELCOME, APOLOGIES AND MINUTES OF LAST MEETING
1.1 Members were welcomed to the 37th meeting of the EDF.
1.2 The Chair welcomed new attendees, Bill McGinnis, the newly appointed Northern Ireland Adviser on Employment and Skills, Gavin Boyd, Chief Executive (Designate) from the Education and Skills Authority, deputy for Will Haire and Lisa Mc Elherron (NICVA), deputy for Seamus McAleavey.
1.3 The Chair also advised that minutes of the plenary meeting on 25 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 against action points from the previous plenary meeting. The paper was noted by Members.
3 CURRENT ECONOMIC SITUATION
DETI Perspective
3.1 The Chair introduced a short paper outlining the latest output forecasts for the NI Economy. Members were advised that the forecasts presented at the September meeting had been significantly downgraded, highlighting how difficult it is to produce robust economic forecasts in such a dynamic environment. She indicated that 2008 has been a difficult year and the downturn may be sharper in 2009. She advised that this is in line with the trends suggested for UK as a whole. However, she reminded members that the paper suggests that NI is no worse-placed than the rest of the UK. She advised Members that the forecasts would be reflected in the forthcoming DETI Quarterly Economic Report (QER).
ACTION: EDF secretariat to circulate QER to EDF Members once published.
Business Alliance Perspective
3.2 Brian Ambrose presented a paper outlining the Business Alliance perspective on the current economic situation. He emphasised that the Executive can help the economy at this time, but stressed the need for an urgent strategic response.
3.3 He welcomed the initiatives already introduced, e.g. 10 day invoice processing, the introduction of PPS 21 and the announcement on the Titanic Signature Project. He stressed the need for further actions, consistent with PSA 1 and 3.
3.4 He also outlined a number of additional measures for consideration to stimulate economic activity over the next 6-12 months, and suggested that a sub-group of EDF should be set-up to review these issues and come forward with recommendations.
3.5 Members outlined support for the proposals put forward by the Business Alliance. Wilfred Mitchell noted a significant increase in the number of calls his organisation is receiving in relation to debt, dissolving partnerships and redundancies. Members stressed the need for interest rate cuts to be passed on to businesses and consumers by the banks.
3.6 The Chair recognised the problems businesses were facing in relation to cash flow. Members were advised on the ongoing discussions with representatives from the local banking sector. Stephen Quinn advised Members that he had recently met with the NI Regional Agent of the Bank of England. Members welcomed any influence that the Executive could bring to bear on the banking sector.
ACTION: DETI to provide EDF Members with an update on interactions with the Banking Sector.
ACTION: EDF Secretariat to liaise with Brian Ambrose on composition, terms of reference, work-plan and timelines for the sub-group.
Trade Union Perspective
3.7 Peter Bunting presented a paper outlining ten key actions to be implemented in order to minimise the damage caused to working people and their families by the recession. He also advised that NIC/ICTU had written to OFMDFM requesting an economic summit and were awaiting response.
3.8 The suggestions from the Business Alliance paper were endorsed. He emphasised the need for acceleration of the Investment Strategy expenditure. He also called for more support for those made redundant, proposing increased redundancy pay and unemployment benefits. He advocated a Workers Protection Fund, especially in light of recent announcements e.g. Woolworths. He suggested the need to identify business sectors of strategic interest, such as the Green Sector, proposing a Centre of Excellence, with NI trying to get ahead in this area. He commended DEL’s work in relation to the bridging the Skills gap to ensure NI is prepared for the upturn. He also suggested increased emphasis on the role of manufacturing in NI.
3.9 Members discussed and welcomed the recommendations presented in each paper. Lisa McElherron outlined the difficulty which the voluntary and community sectors are now facing.
3.10 The Chair advised members that the MATRIX Report had suggested that NI had the right skills and attitude to develop in growth areas e.g. the Green Sector. She highlighted the Strategic Environmental Assessment announced for Renewables, and the decision by the Executive to set up an Inter-Departmental Group on Energy, which she would chair, and suggested these initiatives would drive growth in the Green Sector. The Chair agreed on the need for a sub-group and dates for the March Plenary meeting would also be brought forward.
ACTION: Sub-group to meet and develop an action plan and report back to Plenary at next meeting.
ACTION: EDF Secretariat to arrange next Plenary meeting for early February.
4 SKILLS
Managerial Skills Research
4.1 The Chair welcomed Stephen Dorgan and Gareth Morgan from McKinsey, who joined the meeting to provide an update on the emerging findings from their research into Managerial Skills in Northern Ireland. A short presentation was provided.
4.2 Members were informed that the research assessed the level of managerial skill for manufacturing firms in NI and in the ROI. This assessment was then compared to over 5,000 manufacturing firms in 14 other countries in Europe, Asia and the Americas. An assessment of the managerial skill in the tradable service sector was also carried out for NI and ROI.
4.3 Members were informed that NI firms have significant scope for improvement, with NI being ranked mid table, behind Great Britain, and with a significant gap to the top performing countries. An explanation for this gap was then presented, highlighting a number of structural issues e.g. firm size, skills levels. However a greater emphasis was placed on the quality of management practices within firms, and a large tail of poorly performing firms were identified for NI. It was suggested that closing the gap in the quality of management practice could reap substantial benefits for the NI economy, notably in terms of productivity.
4.4 The presentation stimulated significant discussion among members. For example, questions were raised around the role capital plays in influencing the management practice scores and the representation of firms in the research samples.
4.5 The Chair welcomed the presentation, highlighting the importance of the area to productivity improvements. The Chair asked the extent to which improving managerial skills can deliver significant improvements in business output and how much improvement NI could realistically hope to achieve and how quickly such improvement could be achieved? McKinsey responded by indicating that small firms are relatively easier to change, so improvements are feasible and realistic. He also identified that there are firms in NI with good management practice scores, so there are positive examples to be followed.
4.6 In response to a question on the importance of qualifications to higher management practice scores, McKinsey highlighted a strong upward trend when managers have degrees / MBAs. In response to a question concerning firms involved in exporting, McKinsey confirmed that firms, both domestic and multinational, involved in exporting, tend to have higher management practice scores. In response to a question on the role of the Trade Unions, and specifically on partnership, McKinsey said they had noted no direct relationship, but observed that in some cases this effective partnership working resulted in smarter working practices which improved the management score.
4.7 Joanne Stuart outlined that over 90% of NI firms have less than 10 employees and suggested assisting these firms is a big challenge for managerial skills / training. The importance of role models, communication and mentoring schemes were suggested, given that SMEs are often unable to avail of formal training, given the time commitment required.
4.8 McKinsey suggested government could assist improvements in management practice scores by facilitating competition, supporting skills building and implementing programmes to help companies e.g. mentoring, rotation of managers
Training Our Way out of Recession
4.9 Sir Reg Empey welcomed Bill McGinnis to EDF. He also informed members that Joanne Stuart had agreed to chair the Review of Student Finance.
4.10 Sir Reg Empey then introduced a short paper which outlined DEL activity in light of the current downturn, suggesting that what is done now in terms of skills will determine how well placed the NI economy is to benefit from the recovery once it arrives. He highlighted that it is a very challenging time for employment and unemployment in NI, noting that he had recently visited Banbridge job centre and witnessed the increased number of customers. He highlighted that depending on the increase in the unemployment register up to a further 130 staff might be required to service demand.
4.11 In response to a question from Peter Bunting, Sir Reg Empey indicated that the SSA were considering staffing in their back offices in Jobs and Benefits offices, and confirmed that DEL staff would still be present in all 35 offices.
4.12 Sir Reg Empey highlighted the need for continued investment in training and skills and advised members that the MATRIX Report has identified skills as ‘the heartbeat of the economy’ and encouraged members to convey this message in their respective organisations. He reminded members that he had recently announced contingency plans for apprenticeships and that the new strategy for the Careers Service would be brought to the Executive by himself and Minister Ruane in the next week. He updated members on Workforce Development initiatives, the STEM review and funding for innovation.
4.13 Sir Reg Empey then highlighted a number of proposals which were being put to the Executive for consideration. He discussed the financial implications of such proposals, but highlighted that additional funding will be required.
4.14 John Gilliland advised members that he had recently been invited, by DEFRA, to attend the launch of the Sustainable Agriculture Innovation Network in China. He noted surprise that no one from either government, or higher education in NI had been present. He asked if the universities, or the research NDPB, could engage in this area. Richard Barnett responded highlighting that the universities had not been invited, and that they had been excluded from similar initiatives in the past. He suggested there was a lack of engagement between the national and devolved governments. Sir Reg Empey offered to write to DIUS to highlight this issue and ensure that NI is included in future.
Skills in the Workplace
4.15 Joanne Stuart welcomed Bill McGinnis to EDF. She then summarised her paper highlighting that training must be demand led by business and supported by a simple and focused framework of programmes and funding from government. She suggested that government work with employers to identify training needs across sectors.
4.16 She welcomed Sir Reg Empey’s update on the Careers Service, and highlighted their role in terms of unfilled vacancies and apprenticeships. She also welcomed the plans for funding for training in critical sectors, e.g. ICT and Financial Services.
4.17 .Bill McGinnis responded indicating that he is urgently reviewing the skills advisory infrastructure in Northern Ireland so that it better articulates the employment and skills needs of local businesses. This will allow employers to more effectively influence the range of funding initiatives aimed at improving skills. At UK Commission level, Bill advised of his role in guiding the development of national strategies, making particular mention of the work that is ongoing on the new web based tool, ‘Talent Plan’, which aims to make it easier for employers to access the various skills and employment support systems.
4.18 Sir Reg Empey stressed the importance of the work Bill McGinnis is undertaking.
4.19 In relation to apprenticeships, Peter Bunting raised the issue of insurance costs, especially for small firms. He suggested a group insurance scheme could help to alleviate this problem. He also identified the lack of childcare as an inhibitor for women returning to work. Members were also reminded that trade unions can play a role in encouraging learning and outlined the success of the ‘One Step Up’ programme. Joanne Stuart welcomed this, and agreed to encourage Business to engage more with the Trade Unions.
ACTION: DEL to look into the suggestion for a group insurance scheme for small businesses offering apprenticeships.
4.20 Bob Stronge highlighted the issue of allowing staff time off for training and enquired if any consideration had been given to grant funding to companies. Sir Reg Empey advised that this was not possible as it would be considered as state aid, however, funding could be awarded to the individual and this was being considered as part of a skills solutions response.
Developing Literacy and Numeracy Skills in the School System
4.21 Gavin Boyd provided a short presentation outlining the underachievement challenge and how the Department of Education is tackling this. He provided statistics which identified that international comparisons were not as favourable as they once were, and also highlighted how other countries have been advancing rapidly in terms of their performance. He identified that this is a problem, but suggested that it is entirely fixable. He outlined two key policies, one concerned with school improvement, and the second focused on raising achievement in literacy and numeracy. He emphasised that the focus is now on outcomes, raising standards and reviewing performance.
4.22 Discussion focused on accountability and responsibility within the school system. Members also discussed the spill over effect of poor performance in the schools system, with many 16 / 17 year olds having to be taught literacy and numeracy in FE institutions. The underlying societal issues were also discussed. Trevor Neilands reminded members that the FE colleges have built up significant expertise in this area, and can play a role in promoting life long learning and family learning initiatives. Joanne Stuart outlined the role business can, and do play, outlining the ‘Time to Read’ programme, and also through involvement on Boards of Governors.
4.23 Brian Ambrose enquired about targets, asking if they were challenging enough. Gavin Boyd suggested that if every school performed at the level of the highest performing school in areas of deprivation then 80 % of children would leave post-primary school with 5 GCSEs. He emphasised the importance of emulating the good practices of many schools, across the entire system. He also informed members that the Education and Skills Authority will have defined targets. Patricia McKeown remarked that the problem and its causes are well defined, and suggested that the focus now needs to be on the detail, and the emphasis must be on promoting better outcomes.
5 FORWARD LOOK / MARCH 09 MEETING
The DETI Minister left for other commitments and Stephen Quinn chaired the remainder of the meeting.
5.1 The Chair advised that members had previously agreed that the agenda for the next Plenary will be Exports. Members agreed to this and that this would also form part of the shorter term work of the sub-group on the economy.
5.2 The chair asked the EDF Secretariat to engage with the newly formed sub-group on the agenda.
ACTION: EDF Secretariat to engage with the newly formed sub-group on the agenda for the next meeting.
6 ANY OTHER BUSINESS
Review of Economic Development Policy (DETI / Invest NI)
6.1 The Chair advised members that the DETI Minister had made a statement to the Assembly on 1 December, and formally launched the Review. The Terms of Reference for the Review were been tabled for Members’ information. He invited Richard Barnett, chair of the Panel, to comment.
6.2 Richard Barnett highlighted that the purpose of the Review is to ensure that NI is best positioned for when the upturn comes. He advised that they were due to report in early summer 09. He told members that they would have an opportunity to influence the Review via formal consultation, and that the Panel will be looking for evidence-based comments. He also said the Panel would look at policies which were working well elsewhere, and investigate if they should be adopted in NI. He also emphasised that the Review will only propose recommendations that are consistent with the legislative powers of the NI Assembly.
6.3 Tom Gillen asked for clarification on the role of the Review Steering Group and widening membership. Stephen Quinn advised that the steering group would not interfere with the independence of the Review Panel. He also indicated that that membership of the steering group would not be increased, but that all parties will have an opportunity to be involved via the consultation process.
Press Release
6.4 After discussion members agreed that a Press Release was required and should highlight the discussion, particularly in relation to the discussion on the role the banks could play in assisting businesses and restoring consumer confidence.
ACTION: EDF Secretariat to draft a short press release and clear through the appropriate channels.
Date of Next Meeting
ACTION: EDF Secretariat to contact Members to agree dates for the 2009 meetings.
ANNEX 1
EDF MEETING – 4 DECEMBER 2008: ATTENDEES
|
Arlene Foster |
DETI Minister |
|
Sir Reg Empey |
DEL Minister |
Brian Ambrose |
CBI |
Joanne Stuart |
IoD |
Ann McGregor |
NI Chamber of Commerce |
Wilfred Mitchell |
FSB |
Ian Crowe |
Londonderry Chamber of Commerce |
Patricia McKeown |
NIC/ICTU |
Tom Gillen |
NIC/ICTU |
Peter Bunting |
NIC/ICTU |
Lisa McElherron |
NICVA |
Bob Stronge |
NICVA |
Trevor Neilands |
Further Education |
Prof Richard Barnett |
Higher Education - UU |
John Gilliland |
Ulster Farmers’ Union |
Bill McGinnis |
NI Skills and Employment Adviser |
Stephen Dorgan |
McKinsey / LSE |
Gareth Morgan |
McKinsey / LSE |
|
Stephen Quinn |
DETI |
David Sterling |
DETI |
Graeme Hutchinson |
DETI |
Tony Simpson |
DETI |
Andrew Crawford |
Special Advisor to DETI Minister |
Aideen McGinley |
DEL |
Esmond Birnie |
Special Advisor to DEL Minister |
DFP |
Gavin Boyd |
ESA |
Alan Preston |
DRD |
Yvonne Curran |
DETI |
ACTION POINTS AGREED AT 4 DECEMBER 2008 PLENARY ANNEX 2
|
ISSUE |
ACTIONS ARISING |
LEAD RESPONSIBILITY |
TIMESCALE |
|
Quarterly Economic Report (QER) |
EDF secretariat to circulate QER to EDF Members once published.
|
EDF secretariat |
Once published |
|
Interactions with the Banking Sector |
DETI to provide EDF Members with an update on interactions with the Banking Sector.
|
DETI |
By end of January 2009 |
|
EDF Sub-group on the current economic situation |
EDF Secretariat to liaise with Brian Ambrose on composition, terms of reference, work-plan and timelines for the sub-group.
|
EDF secretariat |
By mid December 2008 |
|
EDF Sub-group to meet and develop an action plan and report back to Plenary at next meeting. |
EDF Sub-group |
Report back to Plenary at next EDF meeting |
|
|
Bringing forward the next EDF meeting |
EDF Secretariat to arrange next Plenary meeting for early February. |
EDF secretariat |
By mid December |
|
Engagement on skills issues between the national and devolved governments. |
DEL to write to DIUS, referencing the Sustainable Agriculture Innovation Network in China. |
DEL |
By end of January 2009 |
|
Group insurance scheme for small businesses offering apprenticeships |
DEL to look into the suggestion for a group insurance scheme for small businesses offering apprenticeships. |
DEL |
By end of January 2009 |
|
Exports as an agenda for next Plenary meeting |
EDF Secretariat to engage with the newly formed Sub-group on the agenda for the next meeting. Exports will form part of the shorter term work of this Sub-group. |
EDF Secretariat |
By end of January 2009 |
|
Press Release |
EDF Secretariat to draft a short press release and clear through the appropriate channels. |
EDF Secretariat |
By 5 December 2009 |
|
Date of 2009 meetings |
EDF Secretariat to contact Members to agree dates for the 2009 meetings. |
EDF Secretariat |
By end of January 2009 |