£7 Billion deficit in investment plan

Eamonn McCann, in the Belfast Telegraph, takes issue with the DUP’s claim that “Northern Ireland’s not for sale”.. oh yes it is, says Eamonn.. and reminds us that as well as publicly owned buildings being put on the market, the widely opposed tacitly approved PFIs will increasingly dominate any government investment in NI. Although he doesn’t seem to have seen the report from the A&L Goodbody consultancy firm, published recently, which states that, based on ISNI figures there is likely to be a deficit in public investment in infrastructure of £7 billion over the next 10 years [NI details in chapter 13 of PDF file].. that’s a lot of PFI [or PPP] contracts.The report highlights the Investment Strategy for Northern Ireland [which I would link directly to.. but the website (part of the Office of the First Minister and Deputy First Minister) doesn’t seem to exist.. despite the links to it in the statement on 20 December 2004 by then-Finance Minister, Ian Pearson.] –

13.2. Infrastructure Deficit

Large deficiencies exist in infrastructure and public service provision in Northern Ireland. This is largely due to a legacy of under-funding in comparison to other UK regions. Not only does Northern Ireland have an infrastructure and investment deficit, but the problem is further exacerbated by the fact that the shortfall is concentrated in areas that are key to the economy’s growth and prosperity. Unemployment is still above the UK average; a large percentage of the population depend on benefits; health service performance is poor and there exists a huge difference in health status between the best and worst off. There is general agreement that failure to adequately address this infrastructure deficit and increase investment levels will seriously hinder future economic growth.

13.3. Investment Requirements

The ISNI outlines the possibility of delivering £16 billion (€23.6 billion) of investment in key infrastructure by the end of 2015 (at current values). This strategy aims to put in place the infrastructure that is needed to enable Government to deliver public services throughout Northern Ireland that are suitable for the 21st Century. Due to the suspension of the Northern Ireland Assembly and Executive from October 2002, this important strategic document has not been adopted.

And the A&L Goodbody report goes on to say this –

13.6. Public Private Partnerships (PPP) Opportunities

Given the projected shortfall in capital provision over the next decade, it is accepted at Government level that there is significant potential for PPPs to be developed in order to achieve the goal of eliminating the infrastructural deficit and stimulating economic development in Northern Ireland. Northern Ireland also has a clear policy framework for PPPs.

As the report also points out –

13.4. Funding Options

The UK Budget (2005) announced a rise in capital investment for Northern Ireland of approximately 30% over previous levels bringing the budget for capital investment to over £1.2 billion annually, an increase of some £200 million. Despite this increase, there will still be a significant difference in terms of public investment levels required over the next 10 years by the various Northern Ireland Government Departments and the allocations provided under current budgeting strategies.

The gross investment deficit [in NI] amounts to approximately £7 billion over the next decade with investment need significantly outstripping capital baseline funding. This highlights a clear potential for PPPs to address the capital provision shortfall.[added emphasis]