Invest NI faces a damning report on its lack of strategic delivery and poor organisational culture

This week saw the release of a damning report on the performance of Invest NI. The report was commissioned before Minister for the Department of the Economy left office from a stand alone Independent Review Body chaired by Sir Michael Lyons.

In the executive summary Lyons and his team make the same case we’ve been talking about this week in Health, ie that the political stalemate has grave implications for the success (or lack thereof) of a critical strategic body like Invest NI:

  • decisions and outcomes around government budgets and spending are difficult and, in some cases, delayed at a point when they are needed most to address the challenges the region faces.
  • it’s budget is under severe pressure with departmental overspends a major concern and the likelihood of a more constrained budget for NI high in light of potential cuts across the UK.
  • resulting uncertainty is unhelpful to the local investment environment, in terms of existing businesses and in how attractive the region is to investors.

The unvarnished report makes for fascinating reading (PDF). In his Foreword Lyons makes a number of observations about the ineffectiveness of a body which has had a budget of more than £160 million in each of the last five years.

Most damaging overall for the senior management is in respect of productivity (which to be fair is a deep UK-wide issue) but more directly that…

…evidence on its economic impact and true additionality is limited. There is considerable room for improvement in leadership, structure, operation, control and public accountability of the agency.

It also notes that since the Independent Review of Economic Policy (IREP) of 2009 (which made similar recommendations to the current report) the promise of transformational change that followed that criticism “has yet to be delivered”.

Lyons underlined “the need for a stronger relationship [with the department] built on clear, public, performance targets, stronger joint working, more precise communications, along with tighter post hoc scrutiny”.

Scrutiny is a key element made more difficult without a Stormont Executive and an aggressive committee system which understands the crucial nature of its watching brief on what could and should be a vital instrument in reflating the NI economy.

The report cites a particularly worrying case that which shows a leadership and organisational culture has languished in the security in the absence of any close interest in whether or not Invest NI is fulfilling its remit (or past promises are being kept).

Tellingly the. BBC’s John Campbell notes that…

The panel also uncovered an extremely difficult relationship between Invest NI executive leadership team and its oversight board.

It found a lack of understanding among some very senior managers regarding the board’s responsibilities for oversight and strategic direction

The reviewers were so worried, that before they had finished their work, they raised concerns with the senior official the Department for the Economy.

In fact, the independent team reported two whistle blowing cases to the DofE that it discovered in the course of its work. In one of the two cases (the departmental proceedings are still to be completed), the report makes this observation

…the complainant in question asserted that they had raised their concern directly with both the Chief Executive and Chair of Invest NI in November 2021. Worryingly, we understand, from information provided by the DfE Raising Concerns unit, that a formal investigation only commenced in September 2022 following our escalation of this issue to the Department.

Of particular concern to us in this instance is the fact that such a delay appears to have occurred when issues were escalated to the most senior levels in the organisation. The leadership of the organisation should be seen as exemplars and beacons of best practice, and we are disappointed with the apparent lack of action by the Invest NI Board and management.

This issue is a demonstration of our wider perception about weaknesses in the compliance culture within the organisation.

It also had concerns about…

…the management of conflicts of interests has been brought to our attention. These concerns relate to the management of conflicts where a Board member has been involved with the development of a programme and subsequently been involved in the casework approval panel.

We also noted evidence of a Board member declaring a conflict, making supportive comments about a particular proposal, and then leaving the meeting. Lastly, we noted concern about the extent of some conflicts and the practicality of how these can be managed. [Emphasis added]

It found flagrant breaches of policy, even within its public facing social media communications…

…we noted a number of endorsements or likes on Invest NI’s social media accounts that could potentially be identified as conflicting with the principles of impartiality. In particular, we noticed Invest NI’s endorsement of a number of posts from companies involved in providing professional support and assistance to other companies to access funding from Invest NI and other providers.

I doubt this is to do with the current leadership alone. The political stalemate has given it an unhelpful comfort zone which has shielded it from serious questions about its strategy and efficacy. And it has hardly had the clearest of directions from ministers.

As the report notes, “its performance cannot be adequately assessed based on its own judgements alone“. But there is a case to be answered as to why since 2009 very little of the improvements have been acted upon. Someone ought to answer for that.

Whether it be the Chair, the Board or more directly in terms of the internal management culture, the CEO himself. If this report is to be taken seriously, surely a new broom is needed?

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