How do we work ourselves out of recession?

Gordon Best, Regional Director, QPANI
Gordon Best, Regional Director, QPANI

From the Desk of Gordon Best, Regional Director, QPANI

Well, the penny seems to have dropped with the Chancellor George Osbourne as he dusts down his plan B and announces a new bill to provide £40bn in government guarantees to underwrite major infrastructure projects and £10bn to underwrite the construction of new homes in Northern Ireland.

This is obviously good news for the construction industry and its supply chain across the UK and, in particular, here in Northern Ireland where we have been hit the hardest and where so many companies now depend on the construction markets of England and Scotland for survival.

But where do we stand now in Northern Ireland and how do we work ourselves out of the recession? Just look at some of the recent statistics that face us:

• Northern Ireland spends 32% less per head of population on infrastructure than Scotland.
• Regional Construction Industry growth figures (12 month on 12 month ) show that while there has been growth in all UK Regions ranging from 2% in London to 41% in the South West, Northern Ireland reported the largest decline of 28%.
• Surveyors are very pessimistic about workloads and profitability over the next 12 months.
• Total Volume of new work in Q1 2012 was 2.1% lower than the same quarter in 2011 but 43% lower than the same quarter in 2007.
• Since Q1 2010 construction output in Northern Ireland has decreased by 10.2 % while in the Great Britain it has increased by 4% over the same period.
• The number of planning applications received by the Department for 2011 / 12 was 13,680. This is 18% lower than the previous year and around half the volume received in 2006/07.
• Applications for residential development have dropped in the last year by 32%.
• Applications for commercial development have dropped by over a half (55% ) since last year.
• Planning Service have failed to reach their performance targets on timescales for processing planning applications for 2011/12 ( across all types of applications ),

While I fully believe the Executive are listening to us in the construction industry much more needs to be done to stop the decline, protect the long term viability of the Northern Ireland economy and stop the haemorrhaging of our young people to other more prosperous and vibrant English speaking parts of the world.

Here are my starters for 10:

• Additional and immediate short term funding to boost shovel ready and high employment yield repair and maintenance projects. The Executive are to be commended for increasing and targeting this type of funding over the last 6 months.
• Develop new private sector and off balance sheet funding models to fund the building of thousands of social and affordable houses. Follow the example of what is happening in the funding of social housing build in Scotland and the excellent work the Scottish Futures Trust do in raising revenue for infrastructure projects.
• Take immediate steps to fast track all types of planning applications.
• Unlock the flow of finance to SMEs, the lifeblood of the Northern Ireland economy through the National Loan Guarantee Scheme.
• Take urgent steps to ensure cash flow through the construction supply chain by robustly enforcing existing prompt and fair payment requirements.
• Take immediate steps to reward quick decisions and risk taking by senior officials in the public sector.
• Take immediate steps to fast track decisions on upgrading the energy grid in Northern Ireland.
• Extend the borrowing powers of the Northern Ireland Executive.
• Local Councils to collaborate more on jointly using their significant assets to leverage private sector investment in local infrastructure. For example town bypasses.
• Urgent and necessary restructuring of the NI Construction Industry and its supply chain.

There is an old saying that goes, “a hungry man who sits on side of mountain waiting for roast duck to fly by has long wait”.

Well there is no silver bullet to the solution of our specific problems, The chances of the Chinese or the Americans or even Mrs Merkel writing us a nice big cheque is about as possible as that roast duck flying by. Each company owner has to take responsibility for managing their way through the current environment and do what is best for their business. Our politicians need to take the leadership mantel and start making difficult decisions about the future funding of infrastructure and we need to get rid of the epidemic of, “Not in my back yard” ism that is widespread across Northern Ireland.

Hope you agree!!