Deloitte released its State of the State report today which examines the structure and levels of government across the UK. The 42 page report outlines public spending levels and the impact of cuts across the country in the last financial year. Whilst the report does look at the UK as a whole (I would encourage you to look through the report) it does devote some pages to Northern Ireland’s economic performance and the challenges we face.
Being the public service that we are, I thought I would pull some of the key bits of information for the Sluggerverse to read.
Let’s begin with public spending per head and it will come as no surprise to you all that Northern Ireland
leads the way in spending with higher rates per head over the other devolved regions. This is important to note as when debates about funding come up, the fact we are ahead will be pointed out by our Scottish and Welsh counterparts as an argument for their administrations to get more.
Linking in with spending, we also despite having a narrow lead over Scotland in spending, have a much greater proportion of our work force employed in the public sector. Scotland and England are under the UK average of 21%, whilst we are still well above the average on 26%.
Public Spending and Sector cuts
One thing that is incredibly important to our economy is the dependence on the public sector and when we have at the moment a government committed to reducing spending it does leave Northern Ireland vulnerable as we struggle to forge consensus at to how we rebalance our economy.
What Deloitte has found though is that compared to other regions of the UK (London, South East, Midlands, East England, North East & West) we have received less of a reduction in public spending. In fact, our reduction is a quarter of the rate that people in London have received during the same period.
In addition to this, compared to the other devolved regions our public sector reductions have been significantly less with Scotland facing a 7% reduction and Wales a bigger 9% cut. I am not sure how the implementation of the Voluntary Exit Scheme would impact these figures as we may have ended up with a bigger reduction that the 5% published in the report.
One of the main conclusions about our economic performance in the concluding section of the report is that despite the success of luring in £1.4 billion worth of investment during the last financial year and the creation of 37,000 jobs since 2011, political instability is a major reason for our lack of economic progress according to the report as they state;
Stormont House Agreement-A route to salvation?
But is there any clear pathway for Northern Ireland to make progress I wondered? Reading on the report
does make some comments on the stalling of the Stormont House Agreement and calls for a renewal of political consensus in moving forward and introducing measures such as cutting corporation tax which they argue will create economic benefits.
The report stresses that the new assembly term will have to focus on public sector reform in terms of making savings in how it delivers services and is structured.
We also need a new approach towards how we invest in our people and manage local talent.
But ultimately the report comes back to the same old problem and concludes our problems fundamentally lie in instability.