Members present:
Mr Neeson (Deputy Chairperson)
Mr Armstrong
Mr Clyde
Dr McDonnell
Mr McMenamin
Ms Morrice
Dr O'Hagan
Mr Wells

Witnesses:
Mr G McConnell
Mr M Pinkerton } Department of Enterprise, Trade and Investment.
Mr B Robinson

The Deputy Chairperson:
I welcome you all to the Committee. There is a new face in the Committee, Mr Eugene McMenamin, whom I am sure you all know.

Mr Robinson:
I am delighted to see you here, Deputy Chairperson. I hope you are feeling 100% again.

I will make a few key points, and I hope that the Committee will zero in on the issues that it finds most relevant. The Minister considers this document to be an important step forward. This is the first time that a Department has produced a draft corporate plan for consultation, and the covering letter to consultees stresses the importance of our position and highlights key issues. We seek to work with all interested parties, including the Committee.

Section 1 sets out the relationship between the Department's work to date on the Programme for Government and our contribution to that, and outlines where the draft corporate plan will sit within that.

Section 2 is one of the most important sections in the report. It deals with our new approach, and I will outline the key elements of that. The establishment of Invest Northern Ireland has changed significantly the way in which the Department operates, and it is important that we seize the opportunities that that presents and rethink our approach. There will be a clear division between policy development and service delivery. We see service delivery being effected primarily through Invest Northern Ireland, the Northern Ireland Tourist Board, the General Consumer Council for Northern Ireland (GCCNI) and the Health and Safety Executive for Northern Ireland (HSENI). There will also be some business regulation through the Department itself. However, the bulk of services will be delivered by the agencies, and the Department will have the opportunity to focus on developing policy and on building up an exceptionally good base of economic research from which to derive the policy.

The need to be innovative is at the top of the Department's list. A secondary issue is the rapid growth of company formation and establishment, and those are issues that I know are at the top of the Committee's agenda. With devolution, we have an opportunity to refocus our strengths on the realisation of a competitive, innovative, knowledge-based and fast-growing economy.

This section also put considerable emphasis on working with the Economic Development Forum. It is a key social partner that can work alongside the Department to realise the plan. The forum has been working closely with us on formulating medium-term strategic priorities for the Northern Ireland economy. That work has drawn heavily on 'Strategy 2010' and your report on that, but it is also linked to the commitments in the Programme for Government. The Economic Development Forum will publish those medium-term strategic priorities soon.

In section 3 we have gone for a punchy presentation of the key challenges. There has been considerable analysis of the economy's performance over the last few years, and, by and large, we feel that there is widespread agreement on that, which has been taken as a given. Section 3 sets out in punchy, crisp and clear language the key objectives and key challenges for the progress of the Northern Ireland economy. I do not plan to discuss innovation, business start-up and so forth in detail, but I will return to them if you wish.

The layout of the draft corporate plan synchromeshes with the corporate plans of Invest Northern Ireland, the Tourist Board, the General Consumer Council, and the Health and Safety Executive. Once those draft corporate plans are finalised and the targets are built up, they will all come together for publication in April and be synchromeshed together, as I describe it. A significant number of the targets will be around service delivery and will be in the plans of Invest Northern Ireland and the other agencies.

I have sought to capture the key elements and strands and to explain how the plan will integrate with the others. I do not intend to say any more now, but I will be delighted to answer any of your questions.

Dr O'Hagan:
I want to return to your opening remarks, specifically those on section 2 of the plan and the clear division between policy-making and service delivery. It has not always been agreed that this is the best way forward - one writer in a book on parliamentary accountability concluded in 1995 that most commentators recognised the concept to be bankrupt. Will you comment on that? Does that not contradict the assertion in paragraph 9 that we have an opportunity to work with others and to develop and embrace an informed policy community for economic development issues? I want to know how that will all sit together. What role will Invest Northern Ireland have in policy development, and how much consultation will there be between the Department, the Minister and Invest Northern Ireland on policy development and service delivery?

Mr Robinson:
The relationship between the Department and Invest Northern Ireland will be very important, and there is no point in developing policy in a vacuum without considering the practicalities of delivery and the feedback from companies and from businesses. The distinct areas of policy development and the delivery are not sundered. Things do not work like that in this part of the world. It is a small community with short lines of communication, and we intend to build on that.

It is also important that the Department take a role that everybody recognises is important but to which we have not had the resources to devote in the past. Most of the many reports on the performance of the Northern Ireland economy point to comparatively limited data on performance when contrasted with other parts of the world. There is comparatively little economic research being done. We have relied heavily on the Northern Ireland Economic Council and the Northern Ireland Economic Research Council (NIERC) for the research that has been done. We see policy development as crucial, particularly in a devolved environment. That is a key interest of the Committee and the Minister. Until now, we have struggled to devote the resources to it, so we are making a clear commitment to make the break with how policy was developed in the past and to put resources into it.

You can get the resource into it by setting out the task rather than second-guessing the agencies. If the Department does not have a clear remit and objective, it will spend time second-guessing the details of the agencies' activities. It will be important that the agencies operate properly and that they are fully accountable, but there is considerable strength in that. That is the principle that lies at the core of the plan. We do not envisage setting out on this course to fail. That might be a danger in larger areas where the interaction of companies and the economy is more remote from the Department and the Minister, but it less likely to happen in this instance. Perhaps Mr McConnell has a point to add to that.
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Mr McConnell:
In embarking on the restructuring exercise, Sir Reg Empey asked for information on how such exercises were done elsewhere. The separation of policy from delivery is virtually the universal model; it is used in Dublin, Scotland, Wales, other European countries and Australia. We carried out extensive research on that. The Minister is accountable for what is delivered overall. He believes that it is correct to split the role of the Department from that of the agency, which is to take business decisions on business propositions. Those decisions will not be based on any political considerations. The agency must consider whether the propositions make sound business sense and are viable, and whether the businesses have a prospective market and productive capacity.

If the Minister then chooses to overlay policy, which covers, for example, social responsibilities, he will direct the agency to do that. We support him in his belief that allowing the Department to concentrate on policy and the agencies to concentrate on delivery, with the two-way exchange of information, will be the best way forward.

Dr O'Hagan:
I was trying to point out that not everyone agrees that it is the best way forward. I am not saying whether it is or is not, but there are commentators on public accountability and administration, and I want to draw your attention to possible concerns and inherent dangers. Policy-making, implementation and service delivery cannot always be differentiated easily. There are no clear lines. I want to point out the concerns and ensure that consultation always takes place. How does the Department intend to deal with all of those strands?

Mr Robinson:
Perhaps we should give the Committee details of some of the practical arrangements. The policy development and planning will be structured and will involve the Minister and the chairman of Invest Northern Ireland meeting about every six months. They will examine the direction that the work is taking, review it and agree what needs to be done. They will be able to see what work must be done and who will do it most effectively. That is how the Minister and the chairman envisage working.

I hope that that gives the Committee the sense that we see that it is important to put a framework around the project and that we realise that it will not just happen, but it must be well managed. We hope that that will alleviate some of the Committee's anxieties.

Mr Armstrong:
There are many issues that I could mention, such as rural transport or the stockpile of cars in the Province. The number of cars on the roads in Northern Ireland is a problem, but so is the number of cars that are not on the roads. If all those cars that are not on the road were purchased, it would cause huge problems for the rural transport network. How does the Department envisage its remit on Northern Ireland's transport and roads structure? What pattern would it consider for the improvement of Northern Ireland's transport system?

Mr Robinson:
The main interaction between Departments on that issue occurs at the Economic Development Forum. The Minister for Regional Development is a member of the forum, alongside the Minister of Enterprise, Trade and Investment and the Minister for Employment and Learning. The Economic Development Forum is the representation of that key link between Departments.

Transport infrastructure is important to the competitiveness of the Northern Ireland economy and, ultimately, to how productive we are. The primary responsibility for the strategy lies with the Department for Regional Development, which has brought its ideas and thoughts to the Economic Development Forum meetings. It is committed to a transport strategy for Northern Ireland - the largest single element of which is a strategy for the Belfast metropolitan area. The Department of Enterprise, Trade and Investment envisages that the economic part of that agenda will be discussed primarily through the Economic Development Forum. That is where the Department will have input into the thinking. Some of the Economic Development Forum's strategic priorities are in the area of infrastructure. The Department envisages that those priorities will come together primarily through the forum.

Mr McConnell:
In section 34 the Department accepts that it has a responsibility to ensure that the infrastructure is there to support economic growth. As Mr Robinson mentioned, much of that infrastructure will be delivered by other Departments, particularly transport infrastructure. The Department of Enterprise, Trade and Investment's role - with advice from the Economic Development Forum - is to ensure the totality of the economic infrastructure and to work with other Departments to ensure its delivery. The Department does not consider itself to be directly responsible for traffic congestion in Northern Ireland. However, it considers an efficient infrastructure to be vital to support Northern Ireland's economic development.

Mr Armstrong:
I do not know how that will be addressed. The Province imports a great deal of product but does not export much - apart from administration. There is large importation of vehicles into Northern Ireland. Many of those vehicles are not purchased and are sitting in car showrooms. That is a problem. What is to be gained from importing so many cars, which depreciate in value?

Northern Ireland must develop exportation instead of importing so much. The aggregates tax, for example, will encourage importation of products from elsewhere. While that might save Northern Ireland's environment, it is restricting to its economy.

Mr Robinson:
As paragraph 19 indicates, Northern Ireland needs to take greater advantage of export opportunities. That is a key issue. The position has improved recently. However, a great deal more must be done. The specifics of how that will happen and the targets will be seen in the undertaking of Invest Northern Ireland. Some of those targets are in the current Programme for Government, and that is referenced in the target to grow manufacturing exports by 10% per annum. That is an ambitious target. There is a clear recognition in the plan about the importance of tackling that problem and producing good results.

Mr Armstrong:
I cannot see how you are going to do that speedily enough. Our economy is going to diminish. There does not seem to be enough return on our exports to sustain ourselves.

Mr Robinson:
That is a fundamental point and I agree with Mr Armstrong. There has been a growing recognition of that. The performance has been improving, but there is still a long way to go.

Ms Morrice:
I want to tie up some loose ends from Dr O'Hagan's and Mr Armstrong's questioning. I want to concentrate on policy and delivery in relation to some of those bodies- the Economic Development Forum, Invest Northern Ireland, the Department of Enterprise, Trade and Investment, the Committee for Enterprise, Trade and Investment and one which has not yet been mentioned, the Economic Policy Unit of the Office of the First Minister and the Deputy First Minister (OFMDFM), and the Minister himself. How do we gather together all those experts to make policy and, at the same time, receive feedback from the real people who are doing the business? With regard to the corporate plan, how do you intend to achieve that?

Mr Robinson:
There are many bodies, but there are fewer today than there were. With the creation of Invest Northern Ireland we have brought together three main bodies into one organisation. A primary aspect of the board of Invest Northern Ireland's remit is to act as a key conduit for business opinion - to articulate the views and bring them to the Department. There is an interest in economic performance on a broader base, but the primary responsibility for economic development policy lies with the Department and the Minister, Sir Reg Empey.

Ms Morrice:
First, in structural terms, how do we filter our ideas through to you in an organised way? Secondly, where does the Economic Policy Unit of OFMDFM fit in?

Mr Robinson:
This Committee hearing is part of the process of Members filtering their views to us. The Minister has underscored his desire to receive feedback from the Assembly. Members have that opportunity as a Committee. I regard the Committee proceedings as part of the feedback mechanism.

Where the Economic Policy Unit of OFMDFM sees itself interacting with the Department is in assembling the Programme for Government. That is where the key priorities of the Executive - including a competitive economy - have been hammered out. The work that has been accomplished, and the Programme for Government targets listed in the annexes are all the result of interaction between the Department, the Economic Policy Unit and the Department of Finance and Personnel.

Ms Morrice:
I suppose because it is called the Economic Policy Unit it looks as if it is sitting at the top of the pyramid of all these different bodies. Is that the case?

Mr McConnell:
No, Sir Reg Empey would be clear that he is responsible for economic development policy. In drawing up that policy, he takes input from all the bodies that you mentioned. As we explain at the end of section 4, he sees the Department playing its role as part of the Government system in Northern Ireland, working alongside other Departments to deliver economic development policy.

As Mr Robinson said, we recognise that other Departments, such as the Department of Agriculture and Rural Development and the Department for Employment and Learning, have an economic remit. You can almost see an economic remit in the work of every Department. We see the Economic Policy Unit as being responsible for the co-ordination of that effort through the Programme for Government.

Ms Morrice:
The plan lacks a clear structured system to get policy on paper. Your responses give the impression of a slight hit-or-miss, hopeful approach. There seems to be a hope that the board of Invest Northern Ireland will be able to feed in. There should be something much more structured and perhaps clearer lines of communication.

I want to turn now to Europe, which is one of my main interests. Paragraph 83 of your plan only touches on how to get money out of Europe - the funds, including Peace II, and such things. However, I am sure that you are aware that Europe is much more than simply a money bag. It is bigger than that. You talk only about the programmes that will provide money. That is fair and good, but there is much more to Europe, especially in economic terms, than getting money out of it. What about investment focus, for example? What about plans for targets with the new enlarging countries? What about co-operation with more than just the European Commission, but with different regions? What about economic best practice exchange? All those sorts of things - including the euro - would make Europe a much bigger player in any plan. I am disappointed that there are eight lines on the European dimension, when there should be many more.

Mr Robinson:
That is valuable feedback, which, of course, we will take on board. Some of the elements will be in the Invest Northern Ireland corporate plan, though you may still feel that that is not adequate. Invest Northern Ireland, in establishing a presence as part of the Northern Ireland office in Brussels, is having a part of that. Invest Northern Ireland will have a higher presence in Europe than its predecessor bodies ever had.

Ms Morrice:
IDB used to have that. Is that correct?

Mr Robinson:
IDB had representation in Düsseldorf, and that will continue. It also has some involvement in Paris, but not on a totally structured basis. The establishment of the office in Brussels will allow it to deal with both Belgium and France.

Ms Morrice:
Should that not be in your corporate plan?

Mr Robinson:
The point that I was making in response to the earlier question was that it is important to have the Department's corporate plan at the strategic level. I made the point about syncromeshing with those other plans, but I do not see this plan replicating what we see Invest Northern Ireland doing.

Ms Morrice:
Then it should not just be Invest Northern Ireland. Have you seen, for example, the departmental response to the Committee of the Centre's inquiry into Europe and all the areas of priority for different Departments in European affairs? Most Departments' European dimension is weak, particularly since we are in a single market. It is the economic part of Europe that affects us most.

Mr McConnell:
The Economic Development Forum, with which we had a discussion on the corporate plan, made the same point - we were very much selling Europe short in the way that you have pointed out. We do need to say more. We need to beef it up and to recognise that Europe is not simply a source of money.

The bullet point at the end of paragraph 11 says
"We will develop our role as a conduit for dialogue between the business community and the wider government system."
That is understated. The idea is that we see ourselves not only relating downwards to industry in Northern Ireland but also being a conduit for its views in trying to seek changes in national policy on economic matters, and, indeed, feeding through into European policy in whatever small way we can influence that. The short answer is that we do need to say more about Europe. It is understated.

Ms Morrice:
It is not just about saying more; it is about doing more.

Mr Robinson:
That point is taken.

Ms Morrice:
The euro is across the border and over the Channel, and we are apparently ignoring it. What policy development are you planning to prepare for the threat - or the opportunity- of the euro? We may have decided not to be in, but it is still there and is vitally important. What policies are being planned in the Department for taking these threats or opportunities on board?

Mr Robinson:
We have done considerable work over the last 12 months on euro preparation. It has been organised in the Department, and we have worked with the banking sector and businesses in Northern Ireland. We have circulated extensive information about euro preparation, about being able to continue to export into euro areas and how to deal with it. Extensive work has been done.

Ms Morrice:
Are there any plans for Invest Northern Ireland to allow American investors to keep their money in euros when they come to Northern Ireland - some sort of new idea to attract investment into a sterling zone?

Mr Robinson:
Major international companies operate in multi-currencies around the world at present, and that has never been a particular issue for establishing in Northern Ireland.

Ms Morrice:
It is a big feature, which is being argued as the reason why we are not getting the same sort of investment from abroad as before.

Mr Robinson:
There is no doubt that it is an influence on the decisions, but those are not areas that we, in a devolved regional Administration, can really impact upon. In the final analysis this is about national policy - whether we go into the euro or not is a reserved matter. What is entirely appropriate is the point you made about Northern Ireland industry being prepared for it, because it is a reality. We have been working closely with the banking sector on this, and that work has gone on over the last year.

Ms Morrice:
It would be more than nice to see that reflected in the plan.

Mr Robinson:
By and large, that has been done. The euro is a reality today, and that work had to be done before the euro came in.

Ms Morrice:
Paragraph 83 needs something that gives more substance to the potential for thinking along lines that are not simply about getting money from Brussels.

Mr Robinson:
I take that point. I may have misunderstood. I thought you meant the euro preparation.

Ms Morrice:
I was talking about the whole area.

The Deputy Chairperson:
What considerations have been given to the impact of the euro, not only on the Department's strategy but on the Government's strategy?

Mr Robinson:
The Chancellor has been clear about the issues that surround whether the United Kingdom joins the euro. The five tests have been set out, so the national policy is clear-cut. The euro is now a reality, and exporting businesses in Northern Ireland have had to come to terms with that significant change in their markets. The Republic is one of the largest markets for Northern Irish businesses. The policy work that we were doing was primarily on preparation for the introduction of the euro in the Republic and the rest of Europe.

Dr McDonnell:
I would like to plough that furrow a bit deeper. It would be wrong to make too much of it, but we must return to certain points. First, perhaps I am being peevish, but it was said in the introduction that the Minister sees this plan as important. Does everyone share that view? Is the plan merely a paper exercise or is it for real? I have seen so many consultation papers, not only from the Department of Enterprise, Trade and Investment, that have been cobbled together for bureaucratic purposes. Departments simply fire out a piece of paper. I like the idea, but it must be underpinned by a commitment from even the most humble public servant who answers the telephone at Invest Northern Ireland.

Secondly, are there any plans for the Department to become a player on the European scene? Ms Morrice asked about the theory. I am not picking on the Department of Enterprise, Trade and Investment. However, I am deeply concerned that, unless Departments are looking for money, the only Department that seems to make any contact with Europe is the Department of Agriculture and Rural Development. All sorts of opportunities exist for our Minister to meet the UK team. Some of the feedback from our agriculture representatives reveals that it is possible for the Welsh, Scottish, or Northern Irish Ministers to be key players on occasion. What is the scope for influencing European Union policy, and engaging in policy-making and strategies?

Thirdly, which will come as no surprise to you as a result of some of the discussions that we were party to last night, what is the research and development (R&D) situation? How can we get away from the horrific situation to which Gerry McKenna referred last night, where we spend £24, Wales spends £35, England spends £44 and Scotland spends £58 per head of population on R&D? We are spending slightly more than one third of what Scotland spends. I do not suggest that spending is the issue; spending wisely is the issue. Nevertheless, if we are not spending money, we are not spending wisely.

Finally, there does not appear to be any serious engagement with, or commitment to, electronic government. E-business is mentioned in paragraphs 78 and 79 of the draft corporate plan, although it could be viewed as being more negative than positive. If we do not commit to electronic processes of government and R&D, we cannot expect the private sector or the inward investor to engage with us on that.

I have made two minor points and two major points. However, the most important issue is that of electronic government. That is crucial, because we are 10 years behind everyone else.

Mr Robinson:
Your first point concerned serious commitment to the exercise. The Department was not required to publish the draft corporate plan, as opposed to some other issues that you felt were exercises. That is highly significant. The Minister and the Department see the plan as important in order to clarify what has been a substantial debate that has been ongoing for the past two to three years. They wish to achieve direction and purpose.

You expressed some anxiety about the exploitation of opportunities in Europe. That underscores a point that has already been made, which, as we have accepted, does not reflect well. At the same time, plans involving Brussels have been discussed, and Tourism Ireland Ltd and the Northern Ireland Tourist Board will focus significantly on the European market in the next two years. There will be openings to exploit opportunities.

Dr McDonnell:
I want to see the Department or the Minister in a tender at the appropriate Committee in Europe. I am not talking about exploiting the financial side, to which Ms Morrice referred. I am talking about participating in European policy-making, although I do not want to go into it in any great detail.

Mr Robinson:
You must accept the reality. As a devolved legislature, our opportunity to impact on policy-making is slight, because it is largely the Department of Trade and Industry's responsibility.

Mr McConnell:
There were discussions about liberalisation of energy markets at the Barcelona summit. The Committee is active in that area. One can appreciate that the UK's stance is towards totally open, liberalised markets, whereas Northern Ireland has stranded costs in generator contracts and is, therefore, unable to cope with fully open markets. It is important to ensure that, while the UK establishes its strategy, there is a little reserve for the stranded cost issue here. However, similarly to when we lobbied and got an exemption on climate change levy, we must accept that we are a part of the UK, and the UK is trying to put forward a single strategy in Europe. It is not that we are inactive - we can do more - but it must be recognised that there is a limit to the extent to which we can influence European policy.

Mr Robinson:
You mentioned research and development. Paragraph 19 of Invest Northern Ireland's draft corporate plan mentions the "continuing challenges" and the need for more innovation.

The Committee has examined the plan, and I gather that it is generally satisfied with it. Above all, the plan is about capturing innovation in R&D. I derive from that, perhaps erroneously, that the Committee feels we have carried through some of our plans to a considerable extent and that there will be more to come, depending on what emerges in future. That is the only possible answer to your questions about relative levels of spending.

Paragraph 79 highlights a clear commitment to e-business and e-commerce, and I do not see any change in that. In fact, I see the opposite. At the end of 2005, all key services will be available online, and available to customers. That is a stark commitment.

Dr McDonnell:
My concern is that there is still an emphasis on the telephone as the primary linkage. We should strive towards electronic online facilities as the primary linkage. Perhaps 10% of customers will want continue to avail themselves of traditional methods - the telephone or a personal visit. However, those methods are grossly inefficient. I accept what you say, and I am not criticising; I merely want to find out how quickly we can proceed.

From the Committee's perspective, it seems the Executive and the Office of the First Minister and the Deputy First Minister have had many plans for e-government, yet each month we see considerable departmental resistance to those plans, and not only from the Department of Enterprise, Trade and Investment. It is fine for the Office of the First Minister and the Deputy First Minister to say that it has a vision for e-government, but there is increasing concern that we are not up to speed vis-à-vis our rivals and the United States. If we do not change that culture within the public service, the private sector will lag behind.

Mr McConnell:
We agree that the Government are behind. However, the type of electronic delivery that you mention is not part of the corporate plan. I do not want to pass the buck, but that is more a matter for Invest Northern Ireland and other agencies that service a customer base through an application process. Our main role is policy development, which is not an area that involves interaction on the worldwide web, although we do talk to and meet up with people, and deal in e-mail. However, major work is being carried out to allow services that the Department delivers directly, such as Companies Registry, to be delivered electronically. The reference in the report is appropriate. Over the years, the IDB, LEDU and the Industrial Research Technology Unit (IRTU) have been working towards increased web interaction, and we expect Invest Northern Ireland to continue with those efforts and to become fully electronic in its own right.

Dr McDonnell:
It is difficult for the Committee to understand where the Department ends and Invest Northern Ireland begins. However, I accept your point that this will be more of an implementation process than a policy process.

Mr Robinson:
Through its trading standards, the Department is piloting one of the electronic document management technologies, which is being funded by a successful bid from the previous round of European programme funds. The Department sees itself as embracing technology and being keen to do so.

Mr McMenamin:
I shall deal with paragraph 83 of the draft corporate plan. I live in a border area where the euro is part of everyday life. Can European companies be offered a carrot to encourage them to come to Northern Ireland? Do we have a policy on cross-border business parks, business clusters or tax-free zones that would be an incentive for European businesses to come to Northern Ireland?

Mr Robinson:
Several European businesses operate successfully in Northern Ireland. The key attractions are the manufacturing costs, and the quality of the product and service in Northern Ireland, which, above all, is driven by the quality of the workforce. Such qualities are the prime offerings for Michelin in Ballymena or the small German electronics company in Limavady, Huco Lightronic. Those companies can produce effectively and efficiently in Northern Ireland, and at a lower cost than in Europe. That is due to a combination of reasons, but the biggest single factor is social costs. The social costs of operating in Europe continue to be significantly higher than those in Northern Ireland.

To answer some of your specific points, the Industrial Development Board and the Industrial Development Agency are examining the possibility of a cross-border park in the Letterkenny/Derry area. They are considering the practicalities of operating in that environment in order to maximise the benefits of some of the differences in the tax regimes. Tax regimes are reserved matters. We have increasingly sought to impact on them. Some of the issues that you raised have moved up the agenda, and strong representations have been made, whether they concern the aggregates tax or duty on fuel. For example, a strong representation has been made for developing tax breaks for R&D. That fits especially well with the Department's priorities for the draft corporate plan and the priorities for Invest Northern Ireland. We must wait for the Budget to learn how the Chancellor is to approach those issues.

Mr McConnell:
One of our partners in delivery is InterTrade Ireland. Its remit is to promote cross-border trade. We work closely with that organisation.

Mr Wells:
I am sure that you have seen the evidence from the Confederation of British Industry (CBI), which said that Invest Northern Ireland should be a slimmed-down version of LEDU, the IDB and the IRTU. Are you content that the merger will produce a leaner organisation? The staff numbers are roughly the same even though there is now only one organisation. Are you absolutely certain that some of the administrative layers have been removed? I do not want to make people redundant, but will the organisation be efficient if it has the same level of administration as three organisations combined?

Mr Robinson:
Undoubtedly, there are opportunities to be more efficient and effective. We must recognise that there are significant legacy issues that will take a few months to deal with. For example, accounts for the three organisations that will cease to exist must be finalised. I am confident that there are opportunities to operate much more effectively. Invest Northern Ireland will seize those opportunities without question.

Mr Wells:
Some people feel that it will be predominantly a Greater Belfast-based organisation. You are looking for new headquarters in Belfast. LEDU already has regional offices, one of which I deal with often. Is there any prospect of spreading those offices around the country more? I am thinking of Downpatrick, for example. Down District Council has written to the Department to ask why Downpatrick was not considered as a location for a regional office of the new organisation. Regional offices not only provide employment in their own right, but they intrinsically would make towns like Downpatrick more attractive for inward investment because it would have an office that people could contact. Moreover, more business could perhaps be stimulated through visits by inward investors. Are you wedded to the LEDU's existing complex of offices?

Mr Robinson:
That will all be carefully examined. The Minister has indicated that the headquarters will be in the Greater Belfast area because of client concentration, access to financial institutions and prospective investors visiting Belfast. That makes a lot of sense. Invest Northern Ireland will carefully consider how it wants to tackle the task in which it is now heavily engaged. It will look at how it might use new technology. It is taking steps to do that. It will look closely at the question of regional representation not only from the point of view of location, but what aids service delivery, what will help stimulate start-ups of new companies, and what will help make us and companies more innovative.

They will be looking at those issues in the next few months. A key element and desire is for Invest Northern Ireland to create the culture of a new organisation, and then to see how it will work. There is no doubt that the question of regional offices fits well in that. Those decisions will be made in the coming months as Invest Northern Ireland sees the task and how it will tackle it.

Mr Wells:
Is there a lack of imagination here, as an opportunity has been given to decant to other areas? It is accepted that core staff are needed in Greater Belfast, but I am not convinced that you need all those back office staff there. Given current information technology, accounts, personnel, and procurement could be situated anywhere in Northern Ireland - Kilkeel, Omagh, or Cookstown, for example. The chief executive and his staff have to be based somewhere like Great Victoria Street, but it does not follow that the next six layers must be based there also.

You must practise what you preach, because you obviously want to diffuse as much investment throughout Northern Ireland, especially to TSN areas. The amalgamation provides an opportunity to do that, but it will not happen. Rural areas will only benefit from the amalgamation if new offices are situated in towns that have not previously had LEDU offices. Has anybody thought how the body can get out of Belfast? Or is the attitude one that the bodies have always been in Belfast, so it is essential that everybody commutes to Belfast - where they will get caught up in traffic jams on the Westlink - to work in Great Victoria Street or Chichester Street?

Mr Robinson:
Perhaps I am being too subtle. That happens now, but it must happen as Invest Northern Ireland - it cannot happen pre-Invest Northern Ireland.

Mr Wells:
You are looking for a new headquarters in Belfast.

Mr Robinson:
With due respect, you conceded that it was obvious that the core would be in Belfast.

Mr Wells:
I said the core, but not the overwhelming majority.

Mr Robinson:
Therefore, I do not understand what you say about looking for new headquarters in Belfast.

Mr Wells:
Recent evidence suggests that you are looking for headquarters in Greater Belfast - you have admitted that.

Mr Robinson:
Absolutely, but I do not see all of those decisions being made as you see them - they have not been made.

Mr Wells:
So you are looking for a headquarters for around 40 people, and will spread the rest of the staff throughout the country.

Mr McConnell:
We are not looking for a headquarters. In a sense, this is a cop-out, but it is a matter for the board of Invest Northern Ireland. To return to your first question, on the organisation's efficiency, we expect it to operate in the most efficient way and to deliver as much as possible. There are a variety of solutions to how they do that across the Province. However, as Mr Robinson said, nothing has been decided. Nobody is out looking for a large headquarters in Belfast.

Mr Wells:
I shall predict what will happen. Inevitably, you will have an all-singing, all-dancing headquarters in Belfast, in which the vast bulk of your staff will work. Invest Northern Ireland will not change that unless the Department pressurises them to have a fresh look at it.

My point is that the bottom third of Invest Northern Ireland back office staff would completely turn around any rural town. The input into the economy would be enormous. Is the Department applying any pressure to get Invest Northern Ireland to think radically about that? I shall give you an example. I worked for 10 years for the National Trust. After our head office was bombed, we decided to move out of Belfast to Saintfield, which was the best move we ever made - we never looked back. The national organisation is moving out of London to Wiltshire. It will leave a hard core of top people in London and all the back-up staff will move to Melksham. That town is absolutely delighted because it will mean a huge investment in its economy. That is thinking radically, and the National Trust has never looked back. I know it is not directly related, but it shows that it can be done. Moreover, it was done in a time before the IT and direct broadband links that we now have were available.

Is anyone whispering into the chief executive of Invest Northern Ireland's ear to think differently? Do the staff want to commute to Belfast? We are as bad. Two thirds of the staff in the Department of Agriculture and Rural Development work in Dundonald House, which is madness. They could be located in Omagh or Cookstown. Are you thinking along those lines?

Mr Robinson:
We are challenging Invest Northern Ireland to think radically. That is the point about a new culture and approach, and about acting effectively and efficiently. The Committee registered that point with the chairman of the shadow board, Prof Monds, when it talked to him before Christmas. The board is conscious of all those issues. It has been discussing the draft corporate plan, and the issue of local representation has arisen in every town at every discussion. It must be at the top of its agenda.

Mr McConnell:
The board has seen the Assembly questions which have come in thick and fast on that point.

The Deputy Chairperson:
It is on an occasion such as this that I am delighted to say that Carrickfergus is part of Greater Belfast. Restructuring, which is two or three weeks away, is at the heart of the draft corporate plan. Can you update the Committee on how you see matters progressing?

Mr Robinson:
We have had a plan in place since August 2001 of what we wanted to achieve by day one. I am pleased to say that we are on target to meet that; a significant amount of work has been done. We have not resolved the issue of property. We will be working in the buildings that we have inherited from the existing bodies, and a rethink is under way of how people will be deployed. Staff have been notified, and some have moved in the past few weeks as part of that change.

The new corporate identity will be available on 3 April. Significant work has also been carried out on rebranding, which is very important. The draft corporate plan is out for consultation. That is a vital step, and five meetings have been held around Northern Ireland on that subject. There is a tremendous impetus; an enormous amount of hard work has gone into it. We are on target to meet the plan of August 2001. The Committee discussed all the legislation with me, and we are excellent shape. I am pleased that we are in that position.

As far as the Department is concerned, we feel that we are ready. The chief executive was appointed some months ago and the second-tier staff have been appointed, with the announcement last week of two further appointments. The organisational structure is in place for 3 April. We have come a long way, which is an enormous credit to the people who have been working on it.

The Deputy Chairperson:
What about the appointment of further members to the board?

Mr Robinson:
The Minister will announce those appointments some time next week.

The Deputy Chairperson:
We have talked a lot about Europe today, but I would like to expand on some points. How does the draft corporate plan reflect the needs of the global economy?

Mr Robinson:
The key strands are to draw together the elements that say that we must look to indigenous business as an important component of the plan. In other words, one of the adaptations to the global economy is to say that we need to create locally owned companies in Northern Ireland. That business formation - the company start-up - is the objective. We talk about the need for innovation, and that is a characteristic of society. We work closely with the Department of Culture, Arts and Leisure on work that is pushing forward with creativity. That is important. The Department is also working on improving skilling and management capability with the Department for Employment and Learning.

Those are the foundation stones on which to drive forward our small economy to ensure that it can cope with increased competitiveness. Attracting inward investment will continue to be a factor. However, one of the key shifts has been to look for improvements in the Department that will contribute to its paying its way.

The Deputy Chairperson:
Have the past year's operational targets been met? In the past day or so, the Committee heard that the Department has a projected underspend of around £17 million, as is the case with other Departments. How will that underspend impact on the corporate plan in the next three years?

Mr Robinson:
Several months ago, the IDB indicated that inward investment had dropped by almost 50%. The Department has initiated some good projects, such as those recently announced for Downpatrick and Omagh - both of which are significant achievements in what is a difficult market place. However, inward investment will probably amount to only 50% of the target. As usual, the IDB, LEDU and the IRTU will publish the results in May. The resource has been deployed, and it is important that that is done. The situation depends on our acceptance of the changed world environment, and, given that, we must realise that the emphasis is on us to have the self-confidence, drive and determination to make those things happen. That reflects that shift.

LEDU's results at the small end are encouraging, but we must still challenge ourselves, because the level of start-ups in Northern Ireland are around 28 per 10,000 of the population, which contrasts with the UK average of around 38 per 10,000. Everyone recognises that UK performance is not world leading. Therefore, there are many challenges. Although R&D spend is increasing, it is not doing so quickly enough. All those results will be published, but the biggest single influence of the past 12 months has been an economic downturn that was compounded by the events of 11 September.

The Deputy Chairperson:
The Committee felt strongly about several issues, and I am sure that you got the message loud and clear. Thank you for attending the meeting. The Committee will comply with the Department's request for a response.

27 February 2002 / Menu / 30 April 2002