Invest NI Performance Must be Measured by Actual Outcomes
Date: Wednesday, 22 May 2013
Reference: PAC 05/12/13
The measurement of Invest NI's performance should be based on investment achieved and jobs created, rather than on promises by investors or the results anticipated at the start of projects. That's the message from the Assembly's Public Accounts Committee which today launched its report into the performance of Invest NI.
Speaking at the launch of the report, the Chairperson of the Public Accounts Committee, Michaela Boyle MLA said: "We recognise that Invest NI operates in a challenging and competitive environment, and that measuring its performance is complex. We also acknowledge that Invest NI has largely met its current targets.
"We believe the fundamental test of Invest NI's performance is the delivery of lasting jobs on the ground. However, Invest NI has always considered its job creation achievement by measuring the number of jobs "promoted" rather than the actual jobs created and how long they last. We are disappointed that systems which will track whether jobs are created or retained have only been implemented recently and it will be some years before any meaningful data becomes available. This is of particular concern given that Invest NI spent almost £520 million on Selective Financial Assistance grants to companies over the past decade.
The Report also demonstrated problems with the quality of information available in relation to net job creation. It found that five of the largest companies which received Invest NI grant assistance of £144.5 million before 2009 could not supply details of jobs lost within that period.
The Committee noted that since Invest NI was established, some of its job creation targets required little effort to achieve or exceed. An example of this was the 2008-11 target to encourage Foreign Direct Investment projects to locate within ten miles of a disadvantaged area. While 92% of these projects did achieve the target, no measurement was made of how many people living in disadvantaged areas gained employment in the projects supported.
The Report did contain some good news for InvestNI and the organisation achieved all of its nine key performance indicators between 2008 and 2011, representing an improvement on previous performance against targets. This improvement appears to be continuing in the 2011-15 period against a background of a severe economic downturn.
Ms Boyle said: "The Committee welcomes Invest NI's widening focus on all businesses in the economy. This inevitably will require a focus on small businesses which are the backbone of the Northern Ireland economy.
"We are also pleased that Invest NI established formal job quality targets in the 2008-11 period. Performance in this area has improved significantly in this period, with 75% of jobs promoted having salaries above the local private sector average, compared to earlier performance of only 50%.
Ms Boyle concluded: "We all recognise that this is a particularly difficult time for our local economy and that Invest NI has a significant role to play in determining how quickly and how well we recover from this downturn. In fulfilling this role, Invest NI needs to remain accountable to the taxpayer and the Assembly for its performance, utilising targets that are meaningful and effective.
"I know that all of the Committee is behind me in wishing Invest NI well in its future endeavours."
Notes to Editors:
1. Invest NI was established in April 2002 as Northern Ireland’s main economic development organisation. Between April 2002 and March 2011, it has spent almost £1.5 billion, and estimates that this has resulted in the promotion of 42,600 new jobs, safeguarding of 19,400 jobs and planned investment of £5.5 billion in the local economy.
2. Factors that Invest NI reported on include:
- the initial promises made by investors at the start of a project. Invest NI has only recently established systems which will facilitate measurement of actual outcomes in the future
- Additionality - paying the minimum assistance necessary to ensure that an investment project proceeds
- Deadweight - where a project would have occurred anyway without assistancethe extent to which new jobs created by Invest NI’s supported companies are counter-balanced by jobs lost
- the quality and duration of jobs secured; and
- the degree to which Invest NI’s programmes are helping reduce the historic productivity gap between Northern Ireland and the rest of the United Kingdom.
3. The Committee retained concerns around Invest NI’s target setting and a lack of independent validation of their performance data and are looking for these issues to be resolved.
4. The Report also highlighted concerns that the establishment of a `virtual’ small business unit by Invest NI will not provide sufficient focus to this key business sector as no evidence or meaningful performance measurement was demonstrated by InvestNI.
Ms Michaela Boyle (Chairperson)
Mr John Dallat (Deputy Chairperson)
Mr Trevor Clarke
Mr Michael Copeland
Mr Paul Girvan
Mr Chris Hazzard
Mr Ross Hussey
Mr David McIlveen
Mr Daithí McKay
Mr Adrian McQuillan
Mr Seán Rogers