Shames us all

The Guardian carries a shameful article, with links to another article and a flash presentation, by Mary O’Hara on Child Poverty in NI.

False dawn

The Good Friday Agreement heralded a period of economic prosperity for Northern Ireland. But beyond the luxury flats, second homes and flashy cars, the region’s poorest people continue to endure some of the UK’s most desperate poverty. Mary O’Hara reports

  • Young Fogey

    A difficult issue…

    There are undoubtedly high levels of child poverty in Northern Ireland, and there is undoubtedly a low wage economy. That creates real problems. What depressed me about this article was the complete lack of any credible solution. It was one long whinge. Partly that’s because Society Guardian is economically illiterate, but it’s partly, I’m afraid, because of the culture of dependency is entrenched in Northern Ireland. As long as we can act like a teenage trustafarian sponging off Granny Brit, no-one has to deal with it. I’m not so much talking about the culture of dependency on the Falls Road either, but that among the sort of people who live on the Upper Ormeau Road and have secure, state funded, jobs in the ‘voluntary’ sector.

    What does anyone in the article say about tackling low wages? Not a sausage, actually. There’s a complaint that the government might be about to cut funding for a few programmes that might alleviate some of the symptoms of poverty and low pay, but nothing about tackling the causes. Bluntly, tackling poverty requires creating wealth as well as distributing it fairly. And the first part of that equation is rarely talked about in Northern Ireland – and never by the various NICVA-type groupies. Yes, programmes like the Childern’s Fund and Sure Start can do some good things, but wouldn’t it be better to not need them (or need a lot less of them) in the first place?

    As for the great benefits of devolution in this area – I’m very dubious of the benefits of a Children’s Commissioner (where we’re just copying the Welsh anyway) and yet-another-pointless-overbureaucratic-public-sector-strategy which will do sweet FA except keep the children of an overpaid consultant in gymkhana fees for another few months. The Children’s Fund is also largely a rip off of an English programme.

    What are my modest proposals:

    1. Move DETI’s budget away from encouraging inward investment towards fostering domestic small businesses.
    2. Sack the hordes of unwanted voluntary sector professionals and replace them with small business advisors and mentors, preferable people who are already running a business themselves and are willing to do this sort of work for 5-10 hours a week if they are well paid enough.
    3. Scapping at least 80% of the HSE rulebook to tackle the culture of over-litigation.
    4. A long hard look at the tax, benefits and fraud enforcement system to encourage the many successful self-employed people currently doing the double to move into the formal sector.
    5. Reforming National Insurance so it doesn’t penalise the self-employed.
    6. Make Northern Ireland a ‘safe place’ for businesses targeted by extremists in other parts of Europe – e.g. the biotech and animal research industries and market ourselves aggressively as such.
    7. I actually agree with the child-care point but somehow the funding for it needs to be made sustainable.

    There’s a great culture of entrepreneurialism in some of the poorest parts of Northern Ireland, particularly in Republican parts of Belfast, but at the moment a lot of it is spent trying to get hold of grants rather than actually generating wealth. Somehow we need to harness this energy and entrepreneurialism.

  • willowfield

    Don’t we need to encourage businesses that export, and tourism?

    Otherwise we don’t actually bring any money into the economy, which is what we need, and everyone’s just passing money between themselves.

    Didn’t the South get its Celtic Tiger through inward investment?

  • idunnomeself

    This paragraph is really incoherant:

    “It’s a disgrace,” she adds. “For a start, the whole concept of a ‘renewed Northern Ireland’ is based on a low-pay economy. People further up the social ladder have done well out of the peace – the gap between rich and poor is higher than in the rest of Britain, and is widening. The reality is that ordinary people are working for wages much lower than the rest of the UK. Invest Northern Ireland – the body that promotes investment here – even boasts on its website about wages being 25% less than the rest of Europe.”

    If the renewal is based on a low wage economy why are those ‘higher up’ the social ladder doing well?

    Where is the evidence that the gap between rich and poor is larger than in other places in the UK? I really doubt this. I know accountants in London and here and believe me the ones here get a lot less. ditto bankers, consultants. The fact of the matter is that we all get paid less here in NI, and we have very few super-rich. I’m almost inclined to call this ‘academic’ a liar..

    Anyway the point about the ‘wage gap’ is irrelavant. Who cares what the rich earn, if you want to worry about child poverty you have to worry about the lowest wages- have these gone up? are there jobs that these poeple are able to take up?

    Which is another red herring here. Lets say DETI attracted lots of good, well paid jobs here- R&D, Financial Services, Skilled manufacturing. Are the people of North Belfast educated, skilled and confident enough to win these jobs? Surely the attraction of low-skill jobs is essential to addressing child poverty in the immediate future?

    Anyway is not having a roast dinner really child poverty? We have discussed these figures before on Slugger- ‘having a computer to do homework on’ is an example of an essential requirement.

    I suspect that once again we are in danger of letting the agenda be set by the (middle class and well off) ‘poverty industry’. These people need there to be a problem so that they can have a nice, publically funded job ‘addressing it’.

  • Young Fogey

    Willow – about inward investment and the Celtic Tiger: yes and no.

    While obviously exports are critical, particularly to a small country and a heavily integrated part of the world, it’s a fallacy to assume that you can’t create growth by selling goods and services within a country. That assumes that their is a finite amount of wealth in the world – if that were the case then we would still be living in caves, chasing after deer with our bows and arrows!

    But you’re right, inward investment is important but a look at trade and investment policy in the Republic over the past 25 years is instructive in challenging a lot of the orthodoxies in Northern Ireland. Trade policy in Northern Ireland is still about going on tours of America, giving American business men classy meals, building flashy industrial estates and, where EU competition policy allows us to, giving people financial advantages to invest in NI.

    The Republic did all this in the 1980s and was a basket case economy. In the 1990s it got the regulatory environment right, with a pro-business tax code helping both indigenous businesses and foreign investors, a liberal regulatory and civil law framework, fair and efficient courts, etc. This made much more difference to foreign investors than an expensive lunch or two in a San Francisco restaurnt, and also helped spur domestic entrepreneurialism.

    While the Intels and Dells are undoubtedly vital to the Republic’s economy, I’d argue than their less so than the Ryanairs and Smurfits, and equally of the army of high-value independent software houses or bespoke financial services providers clustered in the Dublin suburbs.

    Northern Ireland is a basket case economy today. But our nearest neighbour has shown how you can break out of that vicious cycle, and we share many of the Republic’s other advantages – a highly educated, English speaking workforce, an efficient civil code, inside the EU but with strong cultural links to North America, etc. But we have no real culture of entrepreneurialism and too many of the best jobs are in publically funded rôles entirely dependent on the largesse of Britain. Somehow we need to change that, and part of that to me is becoming aggressively pro-business, and pro-indigineous business in particular.

  • IJP

    3 excellent posts to start on this thread, and a real danger of real politics breaking out!! Just what Slugger should be about.

    I go back to the point I made on another thread recently – the Agreement has been mis-sold (particularly by the SDLP) as the end of the process rather than the beginning. The Agreement isn’t the building, it isn’t even the whole foundation, it’s just the agreement that a foundation and a building are necessary.

    It was nonsense to suggest the Agreement would herald an era of economic prosperity per se. It mentions ‘economy’ only twice and contains no economic development programme (far less a feasible one) – rightly not, as economic development is a political issue to be determined by those elected to the institutions the Agreement sets up. Indeed the NI economy picked up in 1991 (about the same time as the start of the Celtic Tiger, in fact), and there is no evidence to suggest Aug 94 or Apr 98 made any difference to it.

    That is because we refuse to deal with real politics. Even intelligent people would rather have a 400-post thread about the hypothesis of an all-Ireland State somewhere down the line than debate the real issues that affect us now. This is the ‘nationalist blind spot’ which is troubling enough, but becomes frankly outrageous when these same people then pay nothing more than lip service to a very real issue such as child poverty, pretending to be concerned when actually their solution to everything is simply to whip up division and ‘blame themmuns’.

    I don’t agree with all that has been written in the first 3 posts here, but it is refreshing to see some of us tackling the real issues so thoughtfully.

    For my part, keen though I am on the Celtic Tiger, it didn’t really solve child poverty. I’ll tell you something else though, nor will endless public-funded voluntary-sector bodies, and nor will the frankly farcical Children’s Commission. We need to be diverting real resources to real children, not spending money on administrative theory.

    A serious economic strategy for NI that promotes integration and thus awareness of the commonality of problems such as child poverty would be a good start.

  • willowfield

    Young Fogey

    Thanks for your response.

    Can you explain to someone who is not educated in economics how you create wealth within a territory without selling outside it?
    As for your examples of Ryanair and Smurfit – both sell outside the Republic and thus bring wealth into the economy.

    IJP

    Indeed the NI economy picked up in 1991 (about the same time as the start of the Celtic Tiger, in fact), and there is no evidence to suggest Aug 94 or Apr 98 made any difference to it.

    What caused the economy to pick up in 1991?

  • willowfield

    PS. There are several words that are commonly misspelled on Slugger. One of them is “publicly” (it is not “publically”).

  • Young Fogey

    Simple (at least in essentials) willowf – increased productivity, scientific advance, improved infrastructure (leading to lower costs and productivity gains) and the harnessing or extraction of resources. NI has a lot of room for growth, particularly by increasing its productivity.

  • willowfield

    Yes, but if you don’t sell outside the territory where does the extra wealth come from? Is it the value of the products? In which case, this wealth is surely not realised until somebody exchanges money for it?

  • Alan

    As an employee in the voluntary sector, I’m going to ignore the nonsense about safe, secure, well paid jobs.

    IJP is correct on the Celtic Tiger, indeed a number of articles in the Village this week clarified that with claims that Ireland has the greatest differential between rich and poor in the EU!

    To be honest, I don’t see throwing money at self proclaimed entrepreneurs will fix the issue. We need to resource those in low pay by providing child care and training. We need to have businesses that insist on paying the minimum wage contributing to child care and training.

    We also need to encourage life long learning so that the claimant who comes off benefits today can leave their entry level job in a few years to allow someone else into that position. And we need to look seriously at generational unemployment.

    There’s also something else lurking behind this story, and that is the developing crisis in funding for such schemes. Firstly, it appears that there will be no slippage monies around anywhere this year. Secondly, monies set aside for specific purposes under the executive funds are being re-distributed elsewhere – the Children’s fund is a case in point.

  • Young Fogey

    From the resources you’ve extracted/harnessed, from extra work gained through higher productivity, through new inventions all of which have a value. Money is only a medium of exchange and a store of value for that wealth. As we live in a cash/electronic exchange economy, thinks are exchanged for money fairly readily.

    Jeepers, wf, what do you think happens? The world economy is by definition a closed system, so how do you think the world is a wealthier place than it was a century ago?

  • Young Fogey

    Alan

    As an employee in the voluntary sector, I’m going to ignore the nonsense about safe, secure, well paid jobs.

    Relative to most people in Northern Ireland, most of them are, and most of them are funded by the taxpayer, be it in NI, Britain or other parts of Europe. Look, tell me why tax payers in Amsterdam or Frankfurt should fund well-heeled consultants to write an utterly pointless ‘anti-poverty strategy for North Belfast’, for example?

    To be honest, I don’t see throwing money at self proclaimed entrepreneurs will fix the issue.

    Of course, throwing money at a series of pointless reports and strategies is a much more sensible idea. How are we going to pay for all the social goods you want to see if we don’t have entrepreneurs to generate wealth?

    We need to resource those in low pay by providing child care and training.

    Yes, we do, but how are you going to pay for it if you don’t foster entrepreneurialism?

    We need to have businesses that insist on paying the minimum wage contributing to child care and training.

    How are you going to make the firms pay the minimum wage if you don’t have the tax base to pay for proper enforcement? How are firms going to contribute to training and childcare if they don’t have a productive workforce making them a tidy profit to pay for it from? You can’t beat a cow into producing more milk, you know.

    We also need to encourage life long learning so that the claimant who comes off benefits today can leave their entry level job in a few years to allow someone else into that position.

    How are we going to pay for the life long learning without being richer? How are you going to free up those entry level jobs unless you have better jobs for people to go to? And how are those jobs going to be created unless you have a pro-business environment?

    And we need to look seriously at generational unemployment.

    How are we going to tackle generational unemployment if we don’t have an evironment which is conducive to job creation? How are you going to get people out of generational unemployment without having entry-level jobs, and making them attractive relative to the benefits system? Wouldn’t it be good to harness some of the energy and talent in Northern Ireland’s poorest communities towards creating wealth and jobs.

    There’s also something else lurking behind this story, and that is the developing crisis in funding for such schemes.

    Perhaps because our economy is a basket case? Perhaps because the people of England and Scotland are fed up subsidising a crowd of spongers?

    Secondly, monies set aside for specific purposes under the executive funds are being re-distributed elsewhere – the Children’s fund is a case in point.

    That’s the problem with the sticking plaster approach you and your colleagues advocate – eventually you run out of plasters. Non-security public spending in NI is at record levels. If there isn’t enough of it, I think you need to ask serious questions about how effectively it is spent.

    With the greatest of respect, Alan, you demonstrate everything that is wrong with the ‘voluntary’ sector in Northern Ireland. A long shopping list of proposals, mostly with no real impact on the real world, the few that do completely unaffordable, all of them utterly bureaucratic, no idea how to pay for the things you want to do, an unwillingness to challenge statist orthodoxy that’s a generation out of date, and an addiction to welfare. We’ve been running round this circle for 20 years plus and it isn’t working.

  • willowfield

    Young Fogey

    Yes, but if we extract resources, work extra hard, invent new things, etc., what are they worth if no-one buys them?

    Or if the only people buying them are from NI, is it not simply an exchange of wealth from the buyer to the seller within NI.

    I can see that if Bob in Banbridge invents a product and I buy it off him for £100 then the value of that product is £100, and the previous value did not exist. So £100 wealth has been created – right?

    Bob has realised the £100 value by selling the product to me. He is £100 up.

    I have spent £100, but I have an asset worth £100, so in theory I am even. But, in reality, I am £100 down unless I can realise the value of the asset. If I never sell that asset outside NI, how does it improve the NI economy?

  • idunnomeself

    I’m also concerned about child poverty- but reporting and lobbying such as winds me up.

    There is a fundamental problem in that no matter how comprehensive our welfare system is (and it is very comprehensive) real instances of appalling child poverty (which I have seen) tend to eminate from the choices that parents make.

    And anyone in a working class area will tell you this because they *know* why some kids have no winter coat or don’t get 3 meals a day.

    What lobby group ever addresses this? It’s far easier to to blame the Government for underfunding your particualr scheme.

    There is also an issue about funding hidden in this story. Less funds are available in NI because of what we choose to prioritise spending on- that is to say what WE want it spent on. While the UK prioritised health and education we only pretended to- we also spent a lot of money on Departmental pet projects and we do sustain a complex ‘community infrastructure’. This is all money that wasn’t available to expand nursery education when it was expanded in the UK.

    Our choice though, not the fault of direct rule ministers, and absolutely unlikely to change when we get devolution back.

  • joanne

    Here’s a way to stop child poverty – how about the “young women” (how young?) stop popping out babies for a minute and consider going to college and/or getting a job? Oh, I know I’m being judgemental, but what sort of life do you expect to have if you have a bunch of kids you can’t afford and live on benefits?

    Yeah, wages will be crappy if you don’t have any qualifications, but most people could probably survive on even minimum wage long enough to get a few qualifications (plus if they are on low-income they’d still get some benefits and college courses would be free). Obviously it’s not that easy if you have children (and they just don’t stop having children) and can’t afford/access childcare.

    *steps off soapbox*

  • willowfield

    We also spend money on a ridiculously complex education system, when a universal system would be much cheaper.

    We spend money on Gaelic language translations and Ulster-Scots.

    As IDM says, we spend money on a complex web of community groups, all of whom demand money for computers, staff costs, premises, etc.

    All of this would be better spent directly on core social services.

  • Young Fogey

    Willowfield – this is the simplest explanation of the Solow model (as good a start as any) as I can find.

  • IJP

    Seriously, I wouldn’t want to tar all voluntary-sector workers with the same brush. I mean, some of my best friends work in the voluntary sector… :)))

    However, as indicated above, too many organizations do focus on their own specific projects, too many are state-funded, and there are too many (literally a tangled web), making it unclear who has responsibility for what and making it easy to pass the buck.

    What caused the economy to pick up in 1991?

    I don’t know, although there was a general world upturn soon after that, and I can’t believe the Celtic Tiger has nothing to do with it.

    This is an excellent debate, thanks to all of you.

  • willowfield

    The voluntary sector is taking a bit of hammering here. What about the private sector that leeches on the public sector? All those bloody consultants writing crap reports at great expense!

  • idunnomeself

    WF- the Banks here print more money, more than the money is devalued through inflation.

    This new money represents the added value our labours add to the economy.

    (this explanation won’t win any prizes for economic theory, but might explain?)

    YF: How do you encourage entrepreneurs without just cutting taxes for the wealthy? Most of the wealthy aren’t entrepreneurs, and in fact tie money up by putting it in long term investments, many of them overseas.

    Alan: Do you not accept that we have an overlarge ‘voluntary sector’, soaking up money that could be better spent helping people break out of the poverty cycles they and their families are trapped in?

  • Young Fogey

    IDM: Cut taxes for the poor! Eliminate the penalties for the self-employed (e.g. whoppingly high national insurance). Attack the health and safety culture and cut red tape.

  • Fraggle

    northern ireland’s economic woes stem from the total lack of control that local politicians have over economic issues. economic policy that affects us here is decided in london and is based on the very different needs of britain.

  • fair_deal

    On the local entrepreneurship v FDI debate, Invest Northern ireland has shifted resources much more to local entrepreneurship (for the simple reason therre hasn’t been much FDI about in the last three years).

    Whoever mentioned childcare you will be pleased to here that a key network of childcare providers in deprived areas (a key barrier to employability) in Northern Ireland (SureStart) is under threat from the Department of Health.

    On the waste issue, you will find waste in all sectors – public, private and voluntary. A good public sector one for you. The Chancellor announced a one-off £30000 to every secondary school. One of the local education boards decided that each grant would have have its own administrator with associated costs and the remainder would go to the school. The schools received £1500. Not only that but these admin posts were kept on even though the grant was a one-off so this increased administration bill was cut from other budgets.

    IJP

    Education – agree. The state should provide one secular education system.

    YF and IDM

    A business advisor is not much use to someone with no literacy or numeracy skills (estimates vary between 1 in 4 to 1 in 5 of our population).

    The voluntary sector lives mostly on EU funding not central government so it is doesn’t drain as much of central government resources as people perceive. For example, the Neighbourhood Renewal Budget is £18m out of £7 billion and big chunk of it will end up going into property development not the voluntary sector.

    To give an example of the positve effects a community group can have I know of one group that heard of high staff demand in warehousing, they got 11 local young unemployed men to take a fork lift driver’s course to make them employable in that sector. 9 of the 11 have got jobs. The people who organised it did it in a voluntary capacity and the training costs about £2000 met by a funding body. I personally think that was £2000 well invested.

    The support for the voluntary sector I would argue is a symbolic policy not a practical policy. The support is simply there so government can point to it when asked what they are doing about poverty et al. It also makes for a convenient blame hound.

    The sector is also hampered by funders every increasing and ever changing administrative and financial requirements – most of which seem to be to justify the bureaucrats existence.

    All that said and I have argued before on slugger the voluntary sector has got stuck in a service provision mode that stems from its needs-based approach. The Asset-based approach in the USA is much more positive and much more market-orientated.

    I also think the Peace monies have not been used well. The decision to follow a programme based approach and not an area based approach is one I think we will come to regret. Money was spread too thin over too many issues and too many areas.

    I have some mates who hate me for saying this but BRING IN WORKFAIR (with the proviso that it works only in a growing economy).

    Willowfield

    If core public services had the all the answers we wouldn’t have these problems.

    The quality of most consultancy reports is poor but does the blame lie entirely with them? Too often I have seen funders view the consultants report not as a serious piece of work but simply as something for the file to keep auditors happy and provide a blame hound if it doesnt work out. I would not be at all surprised if a high proportion are never read. The growth in consultancy reports is administrative requirements – if you want over £250K you need a feasibility study, economic appraisal and business plan. For validity, someone external is required ie the consultant.

    Joanne

    What about the approach in some USA states for young mothers – no benefits unless you complete your education (childcare provided)?

  • joanne

    Fair_deal, I don’t know about specific US programmes like that, so can’t really have an opinion about their effectiveness, but education is the best way out of poverty so I think it would be great if there were more opportunities for young women to get back into education. I think there are a certain amount of opportunities now but you have to be relatively motivated to go out and find them – and that’s the problem, I suppose.

    Even if more opportunities are available, there’s no guarantee that young women are going to take them and stick with them, because it wouldn’t be easy to be a parent (and maybe an employee) and a student as well – though in the long-term it would be a lot easier than working at a job with no prospects and living in poverty, but I have known young women (and men!) who really don’t want to make the effort when they can (just) survive without doing so.

  • George

    It’s good to see the bloated public sector in Northern Ireland not escaping the blame in this debate because it is one of those areas that have to be addressed if child poverty is to be addressed.

    We all (those interested in the Irish Republic anyway) remember the 1987 McSharry budget and the social consensus in it that if we didn’t tackle the national debt running at 125% of GDP, things wouldn’t improve.
    The pain started then, cuts in public services and spending, wage restraint etc. Left and right, unions and employers all agreed.
    Haughey slashed government spendings as % of GDP from 50% to 40% in 2 years, kickstarting the economy. An incredible feat only achievable with left and right working together. (It dropped from 40 to 30% between 1990 and 2000.)

    The tax cuts came later. (Corporate tax was at 28% in 1999 when the Tiger was in full swing).

    Gross average industrial earnings jumped 25% in real terms between 1987 and 2000 although the gap between top and bottom has widened, especially with the tax cuts since 1997 which have favoured the better off.
    But to say that this means things haven’t improved or poverty is as bad as a decade is incorrect. The numbers living in consistent poverty has dropped by 2/3rds since 1997.

    Obviously having the lowest public spend in the EU means a health service in crisis etc. but what is needed now is to levy those who don’t pay at all or who pay very little. The economy as it is now doesn’t need to take the burden and either does your average worker. A good position to be in. Poverty can be tackled without endangering the economy. I’d start with the bloodstock industry.

    Secondly, NI supposedly has an unemployment rate of around 5% which is total rubbish. Only 39% of the population are in employment compared to 46% in the UK and Irish Republic.

    This means there are around 100,000 people living on benefits of some kind not in the unemployment statistics. It’s a pretty safe bet that their children are living in poverty.

    In the Irish Republic, there was a 68% increase in the numbers in employment between 1998 and 2004. That’s 730,000 people put into jobs. The best way to attack child poverty is to give people gainful, worthwhile employment.

    Has this been achieved through the the European social model or US free market economics? I say as much the former as the latter. Social welfare spending south of the border has doubled in seven years.

    Also, what might interest people is that if you look at the average comparitave GDP in Europe from 1973 and 2003, you’ll see that the UK and Germany’s have fallen most in comparison to the rest (15%) while Ireland’s has risen most (37%).

    In other words, the UK and Germany are poorer now in comparison to the rest of the EU than they were 20 years ago. So much for Thatcher saving the British economy!

  • idunnomeself

    ‘The voluntary sector lives mostly on EU funding not central government so it is doesn’t drain as much of central government resources as people perceive.’

    Is not true

    First EU funding comes from taxpayers anyway

    Second our Government gets to decide the priorities that it is spent on- either in Europe or locally (IE the SEUPB carve up)

    And I don’t think we need small business advisors. What we’re doing there is building a mine field then paying peole to guide people through it. Best to not lay the minefield in the first place, no?

    this is making me sound very neo-con. What I want to see are available jobs and training available to get people into the jobs.

    On your forklift example- yes the money was well invested, but what was the role of the NGO? what value did they give? The jobs were there, the training was there, all available, what exactly did they do other than replicate the role of a job centre?

    ‘The sector is also hampered by funders every increasing and ever changing administrative and financial requirements – most of which seem to be to justify the bureaucrats existence.’

    which is another reason why the sector is inefficent. Bureaucrats of my ken tend to say that they exist to try and whip the voluntary sector into some shape worthy of the receipt of public funds. The funds need to be properly accounted for. If an NGO cannot cope efficently with these demands it shouldn’t be delivering a service on behalf of the state.

  • willowfield

    IDM

    WF- the Banks here print more money, more than the money is devalued through inflation. This new money represents the added value our labours add to the economy. (this explanation won’t win any prizes for economic theory, but might explain?)

    Sorry. It doesn’t explain. Can you answer with direct reference to my example?

    fair deal

    To give an example of the positve effects a community group can have I know of one group that heard of high staff demand in warehousing, they got 11 local young unemployed men to take a fork lift driver’s course to make them employable in that sector. 9 of the 11 have got jobs. The people who organised it did it in a voluntary capacity and the training costs about £2000 met by a funding body. I personally think that was £2000 well invested.

    That’s great, but is it typical?

    Do we have any studies of the community/voluntary sector that demonstrate what value it adds, what it has achieved?

    I also think the Peace monies have not been used well. The decision to follow a programme based approach and not an area based approach is one I think we will come to regret. Money was spread too thin over too many issues and too many areas.

    Agree with this: 20 big projects would surely deliver more than 500 small projects, most of which will probably die when the funding runs out.

    If core public services had the all the answers we wouldn’t have these problems.

    What are the questions?

    The quality of most consultancy reports is poor but does the blame lie entirely with them? Too often I have seen funders view the consultants report not as a serious piece of work but simply as something for the file to keep auditors happy and provide a blame hound if it doesnt work out. I would not be at all surprised if a high proportion are never read. The growth in consultancy reports is administrative requirements – if you want over £250K you need a feasibility study, economic appraisal and business plan. For validity, someone external is required ie the consultant.

    I agree totally with that. My point was that the private sector – so often lauded as perfect – often has a vested interest in a lot of public spending.

  • willowfield

    Fair Deal’s point about area-based approaches is a good one. The problem, though, is that – in my experience – there is no culture of co-operation or strategy in most areas. Groups are only interested in their continued existence and that usually means competing with a group from the next estate. Local groups attempt to stymie strategic partnerships because they fear them. They fear losing control.

  • willowfield

    Good points by IDM.

    What’s the added value in the community group sourcing training for the unemployed people compared to, say, the T&EA doing it?

  • idunnomeself

    wf

    someone invents something. people buy it. banks print money to represent the added value to the economy.

    I dig coal out of the ground. banks print money to represent the added value of that asset.

    This is the basics of money supply, how else do you think our system works? the World is obviously a closed system, not everywhere can export more than they import.

  • willowfield

    So how does the bank know to print the extra £100 that I paid for the invention? And what does the bank do with the extra £100 of printed notes?

  • George

    The problem with NI is not the level of funding, peace money or otherwise. The problem is the level of waste and the lack of real employment
    opportunities.

    Unless these structural issues are tackled, it doesn’t matter how much money is poured in, it will all go to waste.

    You can’t have 300,000 forklift drivers if there are only 300 forklift jobs.

  • idunnomeself

    It (normally the central bank) makes estimates and puts the money into circulation.

    If it doesn’t release enough money you get deflation where prices fall because one unit of currency represents more ‘asset’ than before.

    If it releases too much you get inflation, where prices rise because one unit of currency represents less ‘asset’.

    The point is that money represents something- the assets (Coal, a novel, a car etc etc)- growth means more asets, not nessecarily more units of currency in the economy.

    Until mechanical processes for making money our economies were often blighted with deflation- we couldn’t make money fast enough.

    My knowledge of the exact procedures is sketchy. If anyone here does economics maybe youse can explain better- I know this is very simplistic

  • fair_deal

    IDM

    On the job stuff agree – as a friend of mine in Harlem says “The best proven social program for a adult human being is a job”. I wouldnt describe it as a neocon notion though.

    On the role of the NGO

    They identified the local need. They sought and secured the funding. They identified the trainer. They recruited the participants (some of whom had been through previous government training schemes/some were on benefits and the SSA had not moved them on to employment/some status zeros). They made sure they attended the course. They helped them with jobsearch after the course. The T&EA had not succeeded in motivating and supporting this particular group of individuals. The Job Centre had not done its ‘job’ (excuse the pun) and had even encouraged a couple of the lads to give up looking for work and go on the sick. The NGO did succeed that was their added value. An example of the voluntary sector making up for system failure.

    On administrative systems

    1. Funders dont like paying for administrators in voluntary groups.
    2. This reluctance to pay for administration does not prevent them from increasing the administrative workload – hence demand outstrips resources and the system becomes overwhelmed or else other staff divert time to administration rather than project delivery then get hammered for not meeting targets.
    3. I have no problem with reasonable administrative requirements. However, what is galling is the sheer inconsistency between departments, agencies etc about what procedures are to be followed as well as funders approaching organisations with previously acceptable systems and tell them they are to change (fair enough) but that they have to be applied retrospectively.
    4. On financial management public sector vis voluntary go talk to BELB.

    Willowfield

    The questions are how to address poverty and social need.

    The example I have given had a high success rate because of its geographical positioning but success is common with the voluntary sector. Please remeber the voluntary sector largely picks up were the public system fails. This means it is not the solution it is the remedial action to official failure. Ultimately the official systems need to improve but most public agencies make turf wars between voluntary groups look like child’s play and when challenged on failure just bleat about resources.

    The value of the sector

    NICVA does an annual(i think) study of the contribution of the voluntary sector.

    The Treasury has also conducted a review of the voluntary sector and deems it to be a worthwhile investment of public monies.

    On the area based approach citizen juries can be a useful consultation mechanism to get around the vested interests of local groups.

    George
    As I outlined a local labour need was identified but there are structural issues that would have existed whether there was no conflict or not ie like Northern England and the Central Belt of Scotland.

  • George

    Fair_Deal,
    I don’t doubt the benefit of such a programme on a small scale but these type of schemes won’t change anything in the long run and should just be considered business as usual.

    Can you imagine how you would feel if your best hope in life was to get on to a course that might in the end get you a job as a forklift driver.

    Less than 1% of Protestant West Belfast has a university degree and there is no dynamism in the NI economy at the moment that will enable the powers that be to change this situation.

    As a result there are no chances of real employment for these people in the forseeable future so poverty and social disenfranchisement will grow.

    When I left Ireland with a couple of friends in 1992 there was nearly 20% unemployment and no work. When I returned with one of them in 1999, he went to the dole office where everything was on first name terms and was told.
    “Pick up your dole cheque once a week at the post office.
    We’ll give you 3 months to find the job of your choice and if you haven’t one by then we’ll give you one.”

    There wasn’t a hope of us falling into long term unemployment, which leads to poverty etc. because there were jobs everywhere and you could see all around you people who had choices and chances or at least thought they did.
    Work makes you feel worthwhile.

  • Roger W. Christ XVII

    What an excellent discussion, the Young Fogey is absolutely right in every respect. I have some direct experience with the issue of InvestNI (formerly known as the IDB) subsidizing inward investment. I work for a medium sized indigenous business myself. The business is expanding, but it would expand faster if it could pay less tax than it does.

    It’s extremely frustrating that a large non-indigenous business nearby receives money off the government for each person it employs. I have the advantage of knowing some people who work there, and they’re telling me that many of the people being recruited due to these subsidies are basically sitting around not doing anything, the work doesn’t exist for them yet. The conclusions are obvious; this practice inflates the labour market by paying more people to produce less. The rising cost of qualified staff in turn damages Northern Ireland’s competitiveness. Worse, since the staff in question are not actually gaining experience or doing useful things, their skills are atrophied. When things end in tears – like they did in Nortel – our international reputation as a place to hold our own and do sustainable business takes a hit.

    In the multinationals who receive grants from InvestNI there is usually a team of people who, instead of scouting the country trying to sell their product, or drawing up plans to improve the competitiveness of their business, spend their time drawing up elaborate plans to present to InvestNI for another funding round. Considerable effort is expended to try to legally circumvent or limit the effect of the clawbacks or restrictions InvestNI puts on it’s grants.

    Let’s bring them in and keep them in. Cut the taxes back, stop the InvestNI grant money-go-round, and limit investment to measures that are easy to plough back into the economy such as training and skills.

  • IJP

    This really is outstanding debate.

    I agree with every word Roger says, which is very similar to my experience.

    The problem with NI is not the level of funding, peace money or otherwise. The problem is the level of waste and the lack of real employment opportunities.

    This is exactly the crux of the issue, George. Somewhat typical that our problems are so perfectly identified and outlined by an outsider!

    Keep it up!

  • IJP

    This is such an excellent debate, I thought I’d have a try at some edited highlights!

    [T]he culture of dependency is entrenched in Northern Ireland. As long as we can act like a teenage trustafarian sponging off Granny Brit, no-one has to deal with it. I’m not so much talking about the culture of dependency on the Falls Road either, but that among the sort of people who live on the Upper Ormeau Road and have secure, state funded, jobs in the ‘voluntary’ sector.

    Excellent assessment.

    I suspect that once again we are in danger of letting the agenda be set by the (middle class and well off) ‘poverty industry’. These people need there to be a problem so that they can have a nice, publically funded job ‘addressing it’.

    Also spot on.

    It’s far easier to to blame the Government for underfunding your particualr scheme. Our choice though, not the fault of direct rule ministers, and absolutely unlikely to change when we get devolution back.

    Also a very important point.

    Bluntly, tackling poverty requires creating wealth as well as distributing it fairly. And the first part of that equation is rarely talked about in Northern Ireland.

    and

    Non-security public spending in NI is at record levels. If there isn’t enough of it, I think you need to ask serious questions about how effectively it is spent.

    Precisely. We spend too much time talking about where we can get money, and too little talking about where we can earn it.

    productivity, scientific advance, improved infrastructure.

    Yes, the three (albeit interlinked) keys to progress.

    My point was that the private sector – so often lauded as perfect – often has a vested interest in a lot of public spending.

    Which is an excellent point (though I’ve never heard the private sector lauded as perfect). The problem is not the sector per se (be it voluntary, community, private or whatever), it is the fact that all these sectors are dependent on the state, where in ‘normalized’ societies they wouldn’t be, and that there is no strategy in place to ‘normalize’ this in NI.

    The quality of most consultancy reports is poor but does the blame lie entirely with them? Too often I have seen funders view the consultants report not as a serious piece of work but simply as something for the file to keep auditors happy and provide a blame hound if it doesnt work out. I would not be at all surprised if a high proportion are never read. The growth in consultancy reports is administrative requirements – if you want over £250K you need a feasibility study, economic appraisal and business plan. For validity, someone external is required ie the consultant.

    That’s the further answer to the last italicized para, yes! Although I don’t agree that the quality is always poor – the ones you hear about in the press are poor, some are really very good. Doesn’t take away the fact they’re ignored though!

    Lets say DETI attracted lots of good, well paid jobs here- R&D, Financial Services, Skilled manufacturing. Are the people of North Belfast educated, skilled and confident enough to win these jobs?

    Categorically YES!!! The problem is that most of the ‘[educated, skilled] people of North Belfast’ are no longer IN North Belfast! Most of them are in Dublin or England! You need the ‘proper jobs’ (I make no excuse for borrowing others’ term) to keep them HERE!!!

    The best proven social program for a adult human being is a job.

    Even though I did go on the excellent Premiere Programme run ultimately by T&EA a few years back, I will submit that this is a very good point on which to conclude the evening!

  • Young Fogey

    IDM

    And I don’t think we need small business advisors. What we’re doing there is building a mine field then paying peole to guide people through it. Best to not lay the minefield in the first place, no?

    Well, of course its better not to lay the minefield but going into business yourself is a scary prospect (speaking as someone who’s playing with the idea himself). I’ve certainly been helped greatly by a friend who has been in business pretty much all his adult life. What I envisaged wasn’t the usual Small Business Service type people (after all, if they’re any good, why aren’t they in business themselves!!!) but people who are running businesses successfully who are prepared to do it if they’re well remunerated.

    But the point about not laying the minefield in the first place is well taken.

    this is making me sound very neo-con.

    No, if you were a neo-con, you would be saying that the solution to our economic problems would be to invade Scotland!

    George

    Also, what might interest people is that if you look at the average comparitave GDP in Europe from 1973 and 2003, you’ll see that the UK and Germany’s have fallen most in comparison to the rest (15%) while Ireland’s has risen most (37%).

    Are you sure the figures for Britain are correct? Britain was a total hospital case economically in the 70s. In 1979, at the point at which Thatcher took over, UK GPD per capita was 56% of France’s and 53% of Germany’s IIRC. Are you sure you’re not misreading France and Britain in your table.

    IJP

    The problem is that most of the ‘[educated, skilled] people of North Belfast’ are no longer IN North Belfast! Most of them are in Dublin or England

    Er… um… yep, guess I’m part of the problem rather than part of the solution!

  • Alan

    Ah! Missed all the buzz yesterday!

    Look poverty needs specific anti-poverty measures, which means helping people to access jobs. Trickle down economics don’t work and never have. People in poverty need support through government interventions whether it is child care or family credits or whatever. Boosting the economy will give us more reource to play with, but the average entrepreneur has other things to deal with.

    As for red tape, I’m sure it exists, just as I’m sure that most of it is there for a reason. We never hear specifics, however, just a generalised moan. As for complaining about Health and Safety, forget it, your staff’s wellbeing should be your first thought, not something to wish away.

    We should also be teaching elements of entrepreneurship in schools as a basic skill. So many people just don’t know how to handle basic budgeting, financial projections, etc.

    The kids have been enjoying the Disney site where there is a business simulation programme that requires you to make marketing, stocking and sales projection decisions to sell skateboards, print t-shirts etc. It is exciting, accessable and encourages the kids to think.

    On the voluntary sector, there are a huge number of services that are currently being run by voluntary groups. People here are very good at working collectively to improve their lives. Indeed the voluntary labour and fundraising that is added to voluntary projects more than makes up for state funding. We should be arguing for more active citizen involvement. Though I will also admit that not all the apples in the barrel retain their pristine appearance.

  • willowfield

    fair deal

    The questions are how to address poverty and social need.

    OK, and why is it preferable to fund a plethora of community groups, some of which are stronger in some areas than others, rather than providing core education, training and social services?

    Aren’t we agreed that education and training are the best way out of poverty?

    (Genuine question, by the way.)

    NICVA does an annual(i think) study of the contribution of the voluntary sector.

    But is that not its contribution to the economy rather than whether it’s actually overcoming social problems?

  • George

    Young Fogey,
    “Are you sure the figures for Britain are correct? Britain was a total hospital case economically in the 70s. In 1979, at the point at which Thatcher took over, UK GPD per capita was 56% of France’s and 53% of Germany’s IIRC. Are you sure you’re not misreading France and Britain in your table”

    I was amazed myself at that and yep I made a mistake.
    This is where I got it from on page 28.
    It was written by Paul Sweeney, economic advisor for the ICTU this year and titled “The Irish economic experience of economic lift off – with a focus on the contribution of social partnership and the potential contribution of life-long learning.”

    Looking at the table again, which isn’t totally clear, it’s Sweden, which is beside it on the graph, that went down by 15%. The UK went up by about 5% compared to its position in 1973. France went down about the same amount.

    I misread Ireland too, it seems Ireland is nearly 60% up rather than 37% as in the text. Have a look yourself.

  • Young Fogey

    People in poverty need support through government interventions whether it is child care or family credits or whatever. Boosting the economy will give us more reource to play with, but the average entrepreneur has other things to deal with.

    I’ve no problem with government intervention to provide child care or with redistribution of wealth through the tax credits system (although I do wonder why some families with incomes as high as £70k benefit from tax credits. And I don’t think anyone on this thread has said that it is. However, Northern Ireland’s public spending as a proportion of GDP is already enormous (thanks for the Credit Card, Whitehall!!!), and is rather a sign that the problem here isn’t lack of resources but bad use of them.

    The question is how to pay for them and how to make sure as few people depend on the social safety net as possible. I’m afraid the article linked to at the head of the page rather implied that good jobs could be whinged into existence, probably with the help of a 118-page “strategy document”. Goretti Horgan says that, “The reality is that ordinary people are working for wages much lower than the rest of the UK.” This is undoubetdly true, but how do they propose changing this? Did you see a single constructive suggestion in that article? In fact, have you seen a single constructive suggestion from the NI “poverty” lobby in decades?

    We should also be teaching elements of entrepreneurship in schools as a basic skill.

    Of course, although I think its the sort of thing that lends itself do kids actually doing things rather than being taught about it in classroom. Look at the Irish-Pakistani kids you see working on the parents’ stalls at the market – they absorb entrepreneurialism with their mothers’ milk. How can we give a lot more kids the same opportunities?

    On the voluntary sector, there are a huge number of services that are currently being run by voluntary groups.

    There’s also a huge amount of money squandered by voluntary groups. Please tell me what the average community worker or strategy director does to make the world a better place?

    As for complaining about Health and Safety, forget it, your staff’s wellbeing should be your first thought, not something to wish away.

    Who says modern Health and Safety Culture has anything to do with protecting workers? It has more to do with protecting firms from being sued my “no win no fee” solicitors and possibly to give the less bright members of staff some feeling of importance. I presume you go through the same round of pointless “assessment exercised” that we do, identifying the incredible like “computer cables my be chewed through by rats and cause a fire through electrical faults – we will minimise this risk by ordering a metal case for the wires and by staff taking the whole thing home with them every night”.

    If you’re looking for specific examples of health and safety lunacy, try:

    And you think we don’t have a problem?

  • IJP

    YF

    the solution to our economic problems would be to invade Scotland!

    A completely ludicrous idea. They’re far too left-wing!

    I guess I’m part of the problem

    Far from it. My point was that there aren’t enough ‘proper jobs’ to keep many of North Belfast’s most skilled people in North Belfast – that’s not the skilled people’s fault!

    So you sensibly moved to London. Yep, society made you do it…

    WF

    why is it preferable to fund a plethora of community groups, some of which are stronger in some areas than others, rather than providing core education, training and social services?

    It isn’t.

    Funding community groups means funding a specific group in society (i.e. those good at the technicality of forming community groups). While there is a role for community groups, our overwhelming focus on them is unfairly discriminatory against people in areas which lack such networks.

    Alan

    People here are very good at working collectively to improve their lives.

    Sorry…???

    I admire your defence, but I have to say that waffle like this looks like proof of the case against you!

    Perhaps I’m being unfair – such is the meaningless bunkum I have to trawl through in Civil Service ‘strategies’ here, I immediately go against such phraseology!

    YF (again)

    Fantastic list (in the true sense of ‘fantastic’)!

    Who says modern Health and Safety Culture has anything to do with protecting workers?

    Spot on.

  • mjt2000

    “In 1979, at the point at which Thatcher took over, UK GPD per capita was 56% of France’s and 53% of Germany’s IIRC”

    You recall incorrectly. In 1979 UK gdp per capita was about 79% of France’s, and it was only 86% of France’s in 1990. It’s only in the last few years we’ve caught up.

    ——-

    On the issue of economic growth it is of course true you don’t need external demand. The USA until very recently traded less than 10% of its output, it still exports (a lot) less than 10%.

    The best way to think of it is like this. There are two of us on a desert island with no chance of external trade. I can cook well, and you can fish well. I can fish badly, you can cook badly.

    We could both fish and cook. We’d however increase our economic outpu by me cooking, and swapping it for fish that you’ve caught.

    Imagine this on a much larger scale, with money existing to allow us to defer purchases, and to no rely on finding someone to swap with, and you have economic growth.

    You then (for Solow) need to add investment, which is where we take a day off fishing/cooking, and instead build a fishing boat. Next time more fish. etc.

  • Young Fogey

    A completely ludicrous idea. They’re far too left-wing!

    Yeah, and? So was the Ba’ath Party and it didn’t stop Bush invading Iraq!

    Fantastic list (in the true sense of ‘fantastic’)!

    Actually the nuts that were banned from schools were the type of nuts you eat. The other sort of nuts are very much permitted.

    mjt2000 – thanks. I was sort of trying to explain that but didn’t manage it so elegantly. Apologies for the figures – they come from a history of Britain’s relationship with the EU.

  • willowfield

    IJP

    While there is a role for community groups, our overwhelming focus on them is unfairly discriminatory against people in areas which lack such networks.

    Very good point.