Drive Economic Growth By Increasing Infrastructure Spend Says Hamilton
Finance Minister Simon Hamilton MLA has highlighted the critical importance of the Executive investing in Northern Ireland’s infrastructure in the years ahead.
Mr Hamilton has said that increasing infrastructure expenditure must be used to drive economic growth in Northern Ireland.
Speaking at the Northern Ireland Chamber of Commerce’s latest ‘Minister on the Move’ event at Henry Brothers in Magherafelt, Simon Hamilton said: “The argument in favour of investing in infrastructure barely needs to be made. Better roads, bridges, telecommunications networks, are all important in increasing the economic competitiveness of a state. Spending public money on enhancing infrastructure not only makes Northern Ireland more appealing to investors it also creates a bedrock for enduring economic growth. It assists in improving public service delivery and provides an immediate boost to the construction industry.
“The 2011 – 2015 UK Spending Review saw the Coalition Government in London reduce our capital budget by 40 % in real terms. That had a devastating effect on infrastructure spend in Northern Ireland. This year – 2014/15 – for the first time since 2010/11, we began the year with over £1billion in capital. Add in anticipated capital receipts and Reinvestment and Reform Initiative borrowing, and our total infrastructure spend as an Executive will be £1.6billion. Beginning to get back towards where it was.
“All of the projections coming from HM Treasury and the Office of Budget Responsibility suggest that even though austerity will have a long tail, expenditure on capital is loosening. We must seize this opportunity to ensure that increasing infrastructure spend is used to drive economic growth in Northern Ireland.
“But simply having more money to spend on capital schemes isn’t enough in itself. I am acutely aware of the often valid criticism that we can sometimes fail to spend public money on infrastructure projects as quickly as we would like. The time from commissioning a project to its actual delivery is seen as too long.
“I therefore recently tasked a sub-group of the Procurement Board to focus on how we can improve the delivery of infrastructure schemes. There are two key areas I have asked them to focus on –prioritisation and centralisation.
“When you look carefully at states like Australia and Canada which are viewed as more successful in consistently delivering big infrastructure schemes, they prioritise key, strategically significant projects. We need to decide what projects are most strategically important to Northern Ireland and fast-track them through the process so that they are ready to go as soon as money is available. We need a definitive, decisive and durable plan of what Northern Ireland’s infrastructure priorities are.
“Similarly, successful states usually have a much more centralised approach to infrastructure delivery. I believe that our infrastructure investment plan would benefit from greater centralisation so that experience and expertise could be used to deliver major capital projects. Departments must retain responsibility for deciding what projects should be delivered but how they should be delivered could, in many circumstances, benefit from a new centralised procurement and delivery vehicle whose sole purpose would be to deliver infrastructure schemes.
“Spending more on infrastructure must reflect strategic prioritisation and improved delivery or else the opportunity that increasing infrastructure spend presents to aid and accelerate economic growth will not be maximised,” added Minister Hamilton.