Craig Harrison writes for us about Executive and its priorities…
With the dust settled around Parliament buildings after the Assembly voted to pass the Executive Budget 2016/17, now is a good time to reflect on the financial deal Northern Ireland is committed to for the next year.
While there is much to be commended in the spending plan – particularly the additional monies allocated to the new Health Department – the Executive won’t be getting a pat on the back from anyone interested in the future of Northern Ireland’s skilled workforce, after higher education took yet another hit.
As SDLP Leader Colum Eastwood stated in his contribution during the Assembly debate, the Budget cuts a further £24m from higher education and skills – delivering more bad news to a sector that is already suffering.
Indeed, DEL’s budget for higher education had already been reduced by over 8% in 2015, resulting in funding cuts to local universities of more than £16m in 2015/16. The impact on student places has been acute, with QUB scrapping over 1,000 places over the next three years, and Ulster University reducing its numbers by 1,200 during the same period.
None of this does anything to help a local economy well renowned for significant skills shortages. While the IT and construction sectors suffer particularly, the problem is by no means exclusive to these industries, and a recent report from the Londonderry Chamber of Commerce stated that there were around 3,100 skill shortage vacancies across Northern Ireland.
It is with all of this in mind that we can question the Executive’s current priorities, particularly its determination to reduce the local rate of Corporation Tax.
Addressing a recent event hosted by the NI Chamber of Commerce & Industry, First Minister Arlene Foster argued: “When others would have walked away from corporation tax because it was too big or too complex we stayed the course because the prize is too great”. This is reflective of the wider attitude shared by the DUP and Sinn Féin, who hold that reducing Corporation Tax can only be a good thing because of the investment it will bring to the local economy.
Setting aside the fact that striking a local rate of Corp Tax will result in a cut to Stormont’s Block Grant that it can ill afford, one glaring question arises: what good is attracting FDI to Northern Ireland if we don’t have a skills base deep enough to satisfy investors’ needs?
The current attitude toward Corporation Tax seems to put the cart before the horse; trying to secure more jobs in Northern Ireland without first making sure we have a workforce skilled enough to do them. And while the latest Budget does allocate some funding for the ‘skills agenda’, £5m isn’t likely to do much to address the problem.
So the Executive seems to have its priorities a little skewed. While further fiscal devolution is a good thing for our local institutions, it shouldn’t be pursued as an end in itself. Economic growth and more jobs for Northern Ireland should be the ultimate aims of cutting Corporation Tax, but if the Executive continues to leave higher education and skills behind, it’s difficult to see how these goals will ever come to fruition.