Why is Derry So Poor? Part III – The Solutions

It is clear that there are economic and social challenges facing Northern Ireland’s second city, and that little is being done to address them. So what type of solutions could be pursued to enable Derry to fulfil its potential as a key economic generator for the north west of the island ? Here are some suggestions :

1. Acknowledge the Problem
The first step in dealing with any problem is to acknowledge its existence. Yet there has been no official recognition within either the civil service, Stormont or Westminster of the fact that Derry and Strabane are unique cases and are being left behind.

It should therefore be part of the agreed ‘Programme For Government’ of any restored NI Executive to recognise that Derry is a unique case within NI and the UK, requiring unique measures to help address it. Regardless of how the city got to the bottom of the UK’s economic pile, it should be the duty of all partners in any future NI Government to help address it.

2. Better Regional Balance
Whilst the level of challenge facing Derry is unique, it is part of a broader malaise in which the east of NI is continually prioritised in favour of the west. There must therefore be an acknowledgement within Stormont that Northern Ireland operates largely as a Belfast city-state ; an acceptance that this is neither fair nor productive ; and a genuine desire to do something about it. A high-level report should therefore be commissioned to look at how NI can best progress towards greater economic, social and demographic balance between its eastern and western halves. The range of corrective governmental steps for the report to consider should include spatial planning, infrastructure spending, education and skills, civil service relocations, and the possibility of mandatory regional targets for Invest NI.

3. A ‘North-West Powerhouse’
Northern Ireland needs better regional development and a counter-balance to Belfast. The challenge is that the west has just one significant population centre (Derry), and even it is of limited scale. One way to help address that could be to focus on the creation of a new cross-border ‘triangle of prosperity’ – centred on Derry and stretching from Limavady in the east to Letterkenny in the west and Strabane in the south. This area would have a population approaching 200,000, and be centred on the constituency with by-far the highest unemployment in NI (Foyle), as well as parts of those with the next highest rates outside Belfast (East Londonderry and West Tyrone). By focusing spatial development, planning and economic development strategies on enabling a critical mass of population and economic activity to be built along that corridor, a new ‘North-West Powerhouse’ (excuse the title) or North-West Economic Zone could slowly emerge to act as both a viable counter-balance to Belfast and a genuine regional capital.

4. A North-West Task Force
When the city of Liverpool was at its lowest ebb in the 1980s, the Thatcher government responded by creating a specific Minister and Task Force for Merseyside. The next Northern Ireland Executive should do similar by creating a cross-border North West Task Force – charged with developing, promoting and delivering initiatives to step-change Derry and the north-west’s fortunes. The Task Force should be jointly established by both the Stormont and Dublin governments, with a similar level of commitment from the Republic towards making coordinated improvements to the Donegal border region as well.

5. The Basic Ingredients For Success
Derry has been denied some of the basic ingredients it needs to succeed – particularly in infrastructure and education. The next Northern Ireland Executive should therefore make it a priority to provide the core elements Derry needs to prosper:

a. Roads
Work is underway to dual the A6 between Randalstown and Castledawson, and will commence shortly on the Derry to Dungiven section. Dualling the remainder of the A6 – particularly the Glenshane Pass – is still without funding or a timescale for completion, so should be made a priority (using the infrastructure funding secured for NI as part of the DUP-Conservative deal). Work is also due to finally commence later this year on dualling the 12 mile section of the A5 Western Corridor between Derry and Strabane. The next Executive must also commit to urgently completing the further two phases of that road – dualling from Strabane to Omagh, and from Omagh to the border at Aughnacloy. And it should secure cast iron commitments from the Dublin government that they will prioritise improvements to the N2 from Augnacloy to Dublin, and the N14 between Letterkenny and Strabane.

b. Rail
Trains have been relegated to a fringe role in Derry since the 1960s. The state of the track near Derry means that it currently takes as long to travel between NI’s two main cities by train as it did during the steam age (2hrs 12mins). And Derry’s one and only rail station is the most isolated on the island – with the next nearest stop 21 miles away in Bellarena village. Towns like Belfast, Coleraine, Ballymena and Lisburn all have nearby suburban stations that make rail a viable local commuting option – but not so Derry. The next Executive should address all this in three ways. Firstly – they must commit to and fund the third and final phase of upgrade work to Derry’s rail line. This would enable trains to travel at full speed, and also make an express service to Belfast a possibility. Secondly – at least one new halt/station should be created between Derry and Bellarena. If sited at City of Derry Airport, for example, it could fulfil three distinct roles : as a station for the council-owned airport (making it the only one on the island connected by rail), as a ‘Park and Rail’ facility for Derry city, and as a local station for the fast growing villages of Eglinton, Strathfoyle, Greysteel and Ballykelly. Third – the North West Task Force should also commission feasibility studies into rail line extensions from Derry to Strabane (12 miles) and Letterkenny (20 miles), as part of the creation of a regional transport spine throughout the new North-West Economic Zone. If implemented, that would signal the return of rail to counties Tyrone and Donegal for the first time in over fifty years, and send out a positive message about regional development.

c. University Expansion
The quickest way to provide a substantial boost to Derry’s economy would be through a major expansion of its university. Stormont’s cap on total student numbers is stopping this from happening at present (although there would be nothing to prevent Ulster University reallocating student places from its three other campuses, if it wished). With a third of NI’s young people leaving the province to study each year, the next Programme For Government must include a commitment to fund 5,000 extra student places – allocated solely to a significantly expanded university within Derry. And rather than leave the choice of courses for those students to individual or college whim, the Executive should instead insist they be in high value, technically skilled subjects that are deemed strategically important to the city’s future economic development (e.g. Science, Engineering, IT).

Whilst the above projects would require a substantial financial commitment to the north-west from the Stormont/UK Government, it is important to note they would also bring significant benefits to NI as a whole. It should also be recognised that this required investment is merely ‘catch up cash’ – designed to address the chronic underinvestment the city has suffered for years. It should therefore not be viewed as constituting Derry’s share of the NI cake for the foreseeable future. There would be no point in helping the city start to catch up with the rest of the province, only to then let everywhere else accelerate ahead again by excluding Derry from future investments on the basis that they’d ‘had their lot’.

6. A City Deal
City Deals are a form of UK devolution – in which central/regional government lets an area determine its own priorities to stimulate economic growth and jobs, and grants them the funding and enhanced borrowing powers to deliver it. In its Autumn Budget Statement, the UK government announced that the ‘City Deal’ mechanism would be extended to NI. Derry has been working on its proposal for a city deal since 2014, yet was ignored in that Autumn Statement in favour of a specific mention for Belfast alone – who only started work on their proposal last year (see my previous article for more info).

One of the complications in a City Deal for Derry is its relatively small population (110,000 people). As Inverness (population 50,000) showed with its City Deal, however, this is easily resolved by including hinterland areas to reach the desired scale. And the 200,000 population of a cross-border North-West Powerhouse/Economic Area stretching from Limavady to Strabane would provide the kind of scale that would make the idea more feasible.

A City Deal for the Derry area would boost the local economy and help encourage local responsibility at a civic level. However – the ‘Growth Strategy’ on which Derry has based its proposal for a City Deal does not go far enough, as it focuses to a large extent on securing the basic ingredients. As outlined in the previous point, elements like basic infrastructure improvements and university expansion have been owed to the city for years and should therefore be viewed as ‘catch up’ activities that must happen regardless of any City Deal. The limited investment opportunities offered by a City Deal should be filled with genuinely new initiatives, rather than catch-up projects, as otherwise the region will continue to lag behind. It is therefore essential that we get a genuinely aspirational City Deal for Derry, with a parallel agreement to also provide the long-outstanding basic ingredients the city needs just to be able to operate on a level playing field.

7. A Brexit Impact Fund
By the UK government’s own forecasts Northern Ireland will be one of the regions most affected by Brexit – with an expected contraction of our economy by between 2.5% and 12% (depending on the type of Brexit deal secured). Within that, NI’s border region is likely to suffer substantially more – and particularly the city of Derry. As PWC’s 2017 ‘Good Growth For Cities’ Report remarked “Derry’s position on the border with the Republic of Ireland is distinctive, as a significant number of the city’s working population are Irish residents, commuting daily across the border. As one of the few City Regions within Europe that will potentially now see an EU/non-EU international frontier cut across it, Derry faces particular challenges from Brexit”.

Given that NI’s border region will feel the impact of Brexit more than anywhere else, there is an imperative upon Westminster to set aside some of the savings from EU withdrawal to create a dedicated ‘Brexit Impact Fund’ for our border region. This fund should be used for capital projects which would place NI’s border areas in a stronger position to weather the impending post-Brexit economic storm (e.g. the A5, Narrow Water Bridge, Derry’s third road bridge). The Irish Government and EU should likewise be encouraged to establish a similar fund for the border counties of the Republic (and particularly Donegal).

8. A Foyle Free-Trade Zone
Free Ports are a common phenomena around the world, but are not permitted within EU members states. A post-Brexit UK will therefore have the freedom to introduce such initiatives to stimulate jobs and development in disadvantaged areas. Derry’s sea and air ports are located only a few miles apart on the outskirts of the city, with undeveloped land in-between and a rail line and dual carriageway running alongside. By converting those facilities into air and sea ‘Free Ports’, and the land between them a Free Trade Zone, the north-west could turn its location on the edge of the UK, EU and Europe into a distinct economic and employment advantage. And it could be done at very little cost to the public purse. To find out more, see the article I wrote on this last year.

9. A Compelling Niche for Derry
In our globalised economy, cities and regions compete internationally to attract businesses. Locations which develop a strong reputation and genuine expertise in key sectors will have a distinct advantage in this. Yet the last time Derry’s economy had a clear niche was when it was selling shirts to the world decades ago. Since then the city’s economy and workforce have not adapted to changing economic times, and this has contributed to Derry’s poor economic standing.

The Republic of Ireland has long understood the need to pursue sectors offering high skills, high wages and strong growth prospects. As far back as the 1970’s IDA Ireland began to focus on enticing pharmaceutical, electronic and computing companies into Ireland, with significant success. The IDA’s structured approach to securing Foreign Direct Investment has enabled individual cities and regions in the Republic to develop clear niches for themselves in specific business sectors – synchronised with local universities and Regional Technical Colleges, who provide the training and qualifications to deliver a skilled workforce for those sectors. It is the type of targeted and coherent approach that is sadly lacking within Northern Ireland’s economic strategy.

County Cork has established a specialisation in the pharmaceuticals sector, with major players like Pfizer, Novartis and Johnson and Johnson located there. Limerick has established a cluster (40+ companies) of international aviation service businesses at Shannon Airport, and has also created a new National Sports Cluster at its university to secure inward investment in the sports technology and nutrition sectors. Even Belfast has got in on the game recently, with a growing cluster of companies in the business services and film production sectors. So in a competitive global marketplace, what is Derry’s current niche offering to the world ? The city’s economic strategy in recent decades has focused largely on retail and tourism – industries that are synonymous with poorly-paid, low skilled and insecure employment.

Derry must ensure that its core economic strategy focuses on a few distinct business sectors that offer good pay and strong future growth prospects. Sectors which fit with the city’s location, assets and workforce, and in which other parts of Ireland ideally do not already predominate. And the city then needs to relentlessly court the key players in those sectors as part of a coordinated strategy, with the full support and active involvement of agencies within NI. Stormont would need to make the development of Derry and the north-west’s economy in this way an economic priority. NI’s universities and HE/FE Colleges would need to ensure their educational provision was expanded and tailored to meet the employment needs of the chosen sectors. And the basic gaps in Derry’s infrastructure outlined in Point 5 would need to be addressed to make the region a more attractive suitor for inward investment in the first place. Invest NI would also need to step up to the mark here – by no longer focusing its efforts east of the Bann, and instead proving it can target and deliver specific high value businesses to the north-west region.

There are a broad range of potential industries which could step-change Derry’s fortunes in this way : e.g. within the Knowledge sector (IT, Digital Media, Creative Industries, Business Services, Financial Services, Education, Research and Development), Technical Manufacturing (Chemicals, Pharmaceuticals, Precision Instruments), Energy (renewable energy, storage) and Health Sciences (BioTech, Nutrition). The impending reduction of the Corporation Tax rate across NI would help greatly in this task. As would acknowledging the need to adapt again in future if any chosen sector stopped delivering for the city (hence avoiding the problems caused by the decline of the shirt industry).

Finally – Derry already has a very unique niche that it should be much smarter about exploiting. A niche which some view as an historical negative, but which should be a significant asset. And that is its historical connection to the City of London. London is globally significant in economic and cultural terms, and the historic City of London borough which sits at its heart is itself a major economic force (particularly in financial services). The City of London regularly receives requests to develop strategic twinning relationships from places around the world, but as a rule it refuses to twin with anywhere except Derry-Londonderry. This reflects the central role that the City of London’s guilds played in the establishment of Derry’s plantation city and walls four centuries ago. This unique link to one of the most important cities on the planet should be viewed as a golden ticket for Derry. And any hang-ups about exploiting the ‘London’ aspect of its heritage should not be allowed to get in the way of helping the city to prosper (nor used to rehash arguments about its name). There should therefore be a strategic effort within Derry and Strabane District Council to extract every last drop of economic benefit out of their special relationship with the City of London. The 400th anniversary next year of the completion of the city’s historic walls by the London Guilds would seem an opportune moment for that to begin.

10. Local Leadership & Culture
Derry must also look within itself for some of the answers as to why it is being left behind. Questions can be raised about the level of vision, ambition and bravery shown by Derry’s civic leaders over the last few decades (including its council, politicians and Chamber of Commerce). Part II of this article outlined a number of recent instances where local leadership has been found wanting, and contrasted it with the reputation Belfast has earned for being forward thinking and dynamic. Derry admittedly cannot resolve its infrastructure problems alone, nor single-handedly increase student numbers within NI. But it can challenge itself more at a civic level – to move out of its comfort zone, show much more ambition for the city and help to create a positive atmosphere in which success is much more likely to happen. It can make much better use of its own assets to stimulate ambitious regeneration projects locally, rather than think primarily in short, straight lines (as it did with a partial refurbishment of Brandywell Stadium, instead of exploring a new mixed-use civic stadium in a more neutral location). It can help foster a much greater spirit of entrepreneurship within the city, to encourage and enable the new home-grown businesses that are desperately needed. And it can view Belfast and other parts of the north not as competitors, but as potential partners with whom it will sometimes be mutually beneficial to cooperate closely (e.g. the 2023 EU City of Culture Bid). Derry has little to lose from being braver and more ambitious in how it tackles the challenges it faces, and very much to gain.
All this will require a change in the culture of the city, which won’t be easy. Derry people are proud and passionate about their town, but decades as Northern Ireland’s ‘Cinderella City’ have left an air of tired resignation and negativity about the town. The City of Culture year in 2013 was something of a glass slipper moment for Derry – in which it realised it didn’t have to accept its lot, and was instead worthy of elevated expectations and its own ticket to the ball. It will still be difficult for a city used to having basic demands rebuffed to be braver and more ambitious for itself, but that is what Derry’s civic leaders must do.
And so too must its citizenry. In place of negativity and a sense that any proverbial flower that grows too high should be decapitated, Derry folk should instead cultivate an evangelical positivity for their town and its future. One in which expectations are firmly elevated – with no excuses accepted, no barriers tolerated, and where success is celebrated and failure viewed as an opportunity to learn. A frightening level of self-belief to demand more from officialdom is needed, combined with a pioneer spirit that seeks solutions from within rather than wait for permission or answers from elsewhere. It is encouraging to see early signs of such a self-help culture emerging via groups like ‘Your Derry’, and more power to their elbow. Because no-one will be able to match the passion for improving Derry that can and should be shown by it’s own people and institutions. And they are the ones with the most to gain from doing so.

Finally, the city must also make greater use of its diaspora. Derry currently raises its young for export, with many going on to achieve great things in a variety of fields around the world. Their time, talent and wealth should be tapped into to enable them to turn love of their home city into positive contributions towards a brighter future for it.

As this three-part article has shown, it is clear that Derry has long faced economic and social challenges which far exceed anywhere else in NI. Indeed – had it been written twenty years ago, the list of issues facing NI’s second city would have been unchanged. Whilst Northern Ireland as a whole converges economically with the rest of the UK, Derry continues to be left behind. The reasons for this are many, varied and occasionally controversial. Regardless of why, however, there is no genuine recognition of the problem at a Stormont or Westminster level – either politically or amongst our civil servants. There is therefore no sense that it needs to be addressed, let alone a strategy for how best to do so.

Derry has many of the raw materials that it needs to shine and make a significant contribution to this part of the world. To be enabled to do so requires redress of the historical underinvestment it has faced, a fair crack of the whip in future, and some new thinking amongst its people and institutions. Northern Ireland cannot continue to function as a Belfast city-state and leave a swathe of its own people behind without risking a repeat of the discontent that spiralled into the Troubles. It also represents a huge waste for a province who’s main natural resource is its people. Yet twenty years after the peace process began – as Belfast booms and Northern Ireland ascends the UK’s prosperity table – that is the risk we face if we don’t ensure that all of our people can benefit fully from the peace dividend.
Earlier this year I penned an article about a new spirit of restlessness in Derry (see Point 5 above). About a city where self-belief was unleashed by the 2013 City of Culture year – which is now eager for change and no longer willing to accept second best. There is a simmering air of discontent in Derry, and an assertion in some quarters that politeness is getting the city nowhere. Fifty years ago similar discontent there (albeit on a significantly greater scale) was ignored and suppressed by the powers-that-be – until it finally erupted and led to three decades of violence. We are fortunate to live in very different times now. But we would still be wise to not ignore the lesson from history of what can unexpectedly happen when a people or a city feel they are being left far behind.

For Part I of this article, click here
For Part II of this article, click here

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