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News & opinion

9 NOV 2018

City deals should help boost NI infrastructure projects

Northern Ireland featured relatively prominently in last week’s Budget, and mostly for the right reasons.

One thing of note was the announcement of up to £350million for the Belfast City Region Deal, with negotiations also expected to open for a Derry/Londonderry and Strabane City Region Deal as well. 

City Deals for Northern Ireland are something that RICS has called for, and the announcements in the Budget are encouraging. Nevertheless, the absence of a Northern Ireland Executive is potentially a significant obstacle to delivery.
Aging infrastructure needs investment, which the city deal for Belfast and a future one for the North West could help address. The City Deal could also support an increased supply of Grade A Office space in Belfast which, at present, is limited. Appropriate office accommodation and workspace is crucial for the economic development of the city. Furthermore, this City Deal should be used to further Belfast’s aspiration to become a smart city.

We also very much welcome the £2million for retailers to help recovery following the Bank Buildings fire – a much needed boost, if less than some had been hoping for.

In addition, the snappily named “Barnett Consequentials” will benefit from extra funding from the Budget due to increased spending. So, for example, if the UK Budget increases spend for education, health or the environment, the Northern Ireland block grant also increases by a set percentage based on the Barnett Formula.

This Budget did see increased spends and the block grant will therefore rise by an additional £320m over the next two years. However, when sitting, the Executive is not restricted in terms of where it spends the increases in revenue – a rise in funding for one area in the UK does not mean that Northern Ireland must spend its additional cash in the same area.

On this basis, we urge those making the decisions around where to spend the additional money for the Block Grant to use it to bring forward affordable housing and shovel-ready infrastructure projects, which are crucial for the economy.

Whilst the extra funding for Northern Ireland from the Budget is very welcome, the ability to get decisions made is more important. The fact is that Northern Ireland’s economic interests have been damaged by the protracted period of stasis in regional decision-making.
We hope that the Secretary of State Karen Bradley’s announcement last month that further flexibility will be granted to senior civil servants to take decisions in the public interest in Northern Ireland in the continued absence of local Ministerial authority will allow this to happen.

We remain convinced that Northern Ireland, its businesses and its people, are best served by locally accountable Ministers taking decisions based on the interests of those they represent. Giving further powers to the Civil Service is not an ideal position, but it is necessary to defend our economic interests and enable key decisions to be made. 

Ensuring that we do invest in, and make effective decisions around, infrastructure investment will not only provide short-term economic stimulus, it is also critical to securing inward investment in the long term by increasing regional connectivity and competitiveness. 
 
We need to see further progress on critical road network upgrades, the North-South interconnector (a project designed to secure the region’s energy supply), the Belfast Transport Hub (a multi-modal transport development with additional commercial and retail space) and the Casement Park redevelopment (a sports stadium in the heart of West Belfast).

Extra money from the Budget is welcome, but getting effective decisions made remains the key challenge and most important priority for the economy. The business community will be watching what happens from here in terms of delivery with significant interest.

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