1. The Londonderry Chamber welcomes the opportunity to comment and respond to the Department of Finance and Personnel consultation document seeking views on proposed changes to the business rate system.

2. The Londonderry Chamber understands that the purpose of the changes are to seek a method of rating that would rebalance the business rates system and ultimately support smaller business. The Londonderry Chamber seeks to respond to the preferred approach by the Finance Minister, as outlined in the consultation document, which offers an expansion of the small business rate relief scheme (SBRR), which would be funded through applying a levy to the largest/highest value retail properties.

3. The Londonderry Chamber is the largest business representation organization in the North West region of Northern Ireland. We represent 500 companies in the region and play a leading role in the furtherance of the economic and social life in the North West. As the ultimate business network and the voice of local business, we are committed to the enhancement of economic prosperity and quality of life throughout the city and surrounding environs.

4. The Londonderry Chamber has not undertaken any independent research into the rating system in Northern Ireland but we have researched other rating supports delivered by other devolved administrations as well as national business bodies. The Londonderry Chamber has consulted with its members and we have engaged with other Business Alliances throughout NI prior to forming our response.

5. Whilst the Londonderry Chamber welcomes action by the Minister to address and reduce the rising operational costs facing small local businesses and applauds his efforts to double the coverage of small business rates relief, the Chamber disagrees with the Ministers preferred option as outlined in the consultation document.

6. Whilst the measures proposed in the consultation are well intentioned the chamber takes the view that imposing 20% extra costs on retail premises with a rateable value of £500,00 or more in the form of a regional rate supplement is using a very blunt rating mechanism.

7. Although framed as a levy on "out of town retailers" the Chamber takes the view that the levy will affect and impose increased costs on many high street retailers. In fact, published figures clearly demonstrate that 60 % of the premises that will be affected by the levy are near to or located in town and city centres.

8. Larger retail operators located in High Street locations within Northern Ireland, (predominately Belfast based at present) are unable to pass these costs on to their customers and the Chamber fears that these increased costs might impact negatively on retail jobs and cause familiar high street stores to seek alternative more business friendly locations from which to trade.

9. We believe that the suggested rating system will ultimately make attracting large retail investors into Derry City Centre more difficult and could have an adverse effect on the City's position as the North West's premier shopping destination. We believe that it will curb our ambitions to grow our retail offering.

10. Larger retail premises which are currently operating within the High Street are also facing extremely challenging trading conditions and operating on slim margins. We have seen a number of visible high street brands going into administration in recent months. We believe that the supplementary rate as suggested is unfair, discriminatory and has the potential to threaten their future viability.

11. Northern Ireland is already a more expensive place to do business than other UK regions because of its peripheral location and given that it is separated from the mainland UK and key centres of population and distribution. The Chamber takes the view that the proposed levy will make Northern Ireland a less attractive and more expensive place to do business and as a consequence, planned or proposed investments initially destined for Northern Ireland may be postponed or shelved or more worryingly located to other UK regions with lower cost bases that offer larger retailers more favourable trading conditions and a statutory regime which positively attracts and encourages new investment and actively stimulates new job creation.

12. The proposed levy does not send out a clear signal that Northern Ireland is open for business. In fact, such additional costs may deter new stores from setting up here altogether thereby representing a missed opportunity to create much needed new jobs and opportunities to create and enhance the development of a balanced and diverse city centre retail offering.

13. The proposed rates relief for the smaller business is however welcome and we would ask government to consider alternative funding mechanisms for what is clearly a short term measure. Based on recent findings the Londonderry Chamber would ask DFP to consider an extra rating levy on large retailers (NAV £500,000) that sell alcohol might be a more targeted "Out of Town Levy".

14. The Chamber takes the view that business improvement districts involving collaborative partnerships between a range of city stakeholders is another effective and appropriate way of tackling some of the long term challenges facing businesses and retailers within this city and would help address pressing issues like reduced footfall levels and reduced sales.

15. The chamber would recommend that additional more targeted supports are developed to help small retailers - like lack of access to finance, countering the threats that rising online sales pose to the retail sector and positive initiatives which address declining retail sales and rising product and transportation costs.

16. The Chamber would like to take the opportunity to remind the Minister/Executive that similar proposals were recently rejected by the Scottish Parliament once closer consideration had been given to the adverse consequences which were likely to arise if a similar levy was introduced.

17. The chamber strongly agrees with the proposed changes outlined in the consultation document to allow the use of non commercial window displays and welcomes any changes to the rating system that could be used to reward businesses that invest in green technologies and seek to reduce their carbon footprint.

18. Finally the Chamber recognises the problem of vacant units in our town and city centres and the need to incentivise small business start-ups. We would like the Minister to examine rate concessions for new business start-ups locating in town and city centres.

The Londonderry Chamber hopes that DFP finds these comments helpful and that account will be taken of the views expressed by this organisation.

Londonderry Chamber of Commerce response to consultation on Private Member's Bill to introduce a levy on plastic bags

1. The Londonderry Chamber of Commerce welcomes the opportunity to comment and respond to the consultation on the Private Member's Bill to introduce a levy on plastic bags

2. The Londonderry Chamber of Commerce is the largest business representation organisation in the North West region of Northern Ireland. We represent the interests of over 500 members, are the voice of local business and are committed to the continued development of the local business sector and the enhancement of economic prosperity within this region.

3. Londonderry Chamber of Commerce disagrees with the introduction of a levy on single use plastic bags and welcomes the opportunity to voice its concerns on behalf of our membership.

4. Whilst the Chamber is strongly supportive of any measures designed to contribute towards waste reduction and effect environmental improvements, the collection of this tax places an additional administrative burden on our members businesses.

5. This levy will ultimately be passed on to end customers and we take the view that this levy will have an adverse effect on our members' businesses who are already coping with challenging business and trading conditions.

6. The Chamber also takes the view that the charge should not be imposed on customers of certain products, for example there are privacy issues surrounding bag usage at pharmacists and concerns regarding food contamination if the charge is imposed on consumers of "on the go" food products.

7. The Chamber is concerned that this Bill and the high charges that are proposed are likely to be perceived by the business sector and their customers as a revenue generating initiative rather than an environmental measure designed to reduce bag usage.

8. The Londonderry Chamber therefore recommends that the Department of the Environment engage with the business sector to explore alternative ways in which bag usage may be reduced. Such an initiative could be strengthened by a supporting marketing campaign.

9. Finally, the chamber is concerned that this Bill places tax collection responsibilities on the local business sector and as such is an unwelcome administrative and financial burden. Moreover the threat and imposition of fines for non compliance/accidents is unhelpful in ensuring the backing and full support of the retail sector.

Transport Minister Danny Kennedy travelled to Londonderry today to reaffirm his commitment to developing the Londonderry to Coleraine rail link.

The Minister met the Mayor of Londonderry, Maurice Devenney along with local councillors, MLAs, MPs and other interested groups to reassure them of his commitment to the maintaining and upgrading of Londonderry rail line.

Addressing the meeting the Minister said: "I am committed to developing the Londonderry rail line and have no plans to allow the service to be closed.

"Unfortunately, as a result of the budget approved in January of this year, the proposed £75million project to upgrade the Coleraine to Londonderry track in 2012 has had to be deferred until 2014. However, funding of £20million was allocated to year four of the budget period (2014/15) to allow the project to start in 2014.

"In the meantime, my Department is funding a programme of engineering work to maintain safety and keep the line operational. Translink has plans to deliver a fully integrated bus and rail service throughout the day, between Londonderry, (Limavady), Coleraine and Belfast. The combined Coleraine-Londonderry rail/bus service will represent an increased frequency of service."

The Minister added: "£20million of funding was allocated to 2014/15 to allow the project to start in 2014, avoiding disruption to Derry's City of Culture Year in 2013. Unfortunately I cannot predict the outcome of the next Comprehensive Spending Review, but I can assure the people of the North West that I am wholly committed to gaining the necessary funding for the whole project to upgrade the Londonderry rail link."

The Londonderry Chamber of Commerce welcomes the opportunity to formally respond to the public consultation on Air Passenger Duty. The Londonderry Chamber of Commerce is the principal business organisation in the North West of Ireland, representing over 450 members. Our membership includes many of the largest employers in the region.

The Londonderry Chamber contests that Northern Ireland is a peripheral region, situated on the western edge of the European continent and therefore the strongest possible range of air access is vital for the positive development of the regional economy. We believe that UK APD levels applying in Northern Ireland is compounding the challenge for us to grow and develop air access corridors to this region, all the more so when set alongside strong, proactive moves being undertaken by the Republic of Ireland Government to further bolster their comparatively strong air service network in order to assist further inward investment and tourism growth.

Our Challenge is therefore unique and requires government to find a solution to our region that does not negate our ability to grow our economy. We are seeking to develop the economy assisted by inward investment and tourism growth from GB, Europe and North America initially, but ultimately also from the developing „BRIC‟ economies.
For our region to be economically competitive within a relatively small island market we urgently need to assume local responsibility for the setting of our own APD levels, through devolution of this matter from London. This action would urgently enable us to address the enormous disparity regarding long haul services (notably North America, which is a critical present and future source of economic growth opportunity for NI, and where the present disparity is at its greatest):

We wish to make a number of further observations to underpin our message hern Ireland is a peripheral region, situated on the western edge of the European continent and therefore the strongest possible range of air access is vital for the positive development of the regional economy.

1. The issue of UK APD levels applying in Northern Ireland is compounding the challenge for us to grow and develop air access corridors to this region, all the more so when set alongside strong, proactive moves being undertaken by the Republic of Ireland Government to further bolster their comparatively strong air service network in order to assist further inward investment and tourism growth. This position is unfair, unsustainable and places Northern Ireland at an obvious and distinct disadvantage.
2. Northern Ireland must be enabled to play on a level playing field with the Republic of Ireland and not held back by a regressive tax. The current level of APD makes Northern Ireland a less attractive place in which to do business, compared with its neighbour sharing the same land mass.
3. Of particular concern is the risk that the current rates of APD pose to Northern Ireland's one and only direct trans-Atlantic service to the United States. Since its inception six years ago, the Belfast-Newark service has carried just over 600,000 passengers, 40% of them inbound tourists and business visitors. Based on conservative estimates made by the tourism and enterprise authorities, it has generated revenues to the Northern Ireland economy of just over £100M, and accounts for several thousand new jobs directly related to foreign direct investment placed in the region due to the availability of direct access. Without a favourable outcome to this consultation, there is a very real threat that the airline will be left with no other option but to withdraw from the Northern Ireland market with the loss of a vital tourism and business link to the United States. This will result in irreparable long-term damage inflicted on Northern Ireland's standing and international reputation due to the "blight" that the loss of the route would create on other prospects for many years to come.

It is imperative that the outcome of the present consultation on APD provides Northern Ireland with the means to safeguard economically-significant air routes and extend our reach to important source markets for tourism and business globally. This is the only way that Commercial aviation can support the pressing need to rebalance the Northern Ireland economy.

Following a meeting with secretary of state Owen Paterson, Padraig Canavan, president of Londonderry Chamber of Commerce, said:

"The Chamber believes that all local businesses are very supportive of the move to have corporation tax powers devolved to Northern Ireland and corporation tax reduced. It's one of a number of things that makes the area more attractive to investors and gives businesses more flexibility in how they use their profits and enables them to invest more to stimulate further growth.

"That contributes to the overall aim of making Northern Ireland more self-sufficient and less reliant on the public sector.

"There was a significant collection of people from business organisations across Northern Ireland all in one room at the meeting with secretary of state Owen Paterson."

Over 250 Business people from around the region came together at the Millennium Forum to hear first hand from the Chief Executive of the Culture Company, Shona McCarthy, of the progress to date in relation to building her company and the developments and inroads made in getting a world class arts and culture programme that will make the City Proud. The event was all about reassuring and updating the business community on the progress that has been made and that the promise to "drive an economic renaissance transforming levels of prosperity in our city and wider region", was at the heart of the Culture Programme and was well underway. The Culture company are in the process of bringing their team together - to date they have made three appointments and another 8 individuals will be brought on board over the next few weeks. There was a definite sense that the momentum was gathering. Businesses wanted to know about the Marketing Plans, Tendering opportunities, Planning, Infrastructure proposals and the engagement with Diaspora. An update on progress was given and the Business community were assured that regular communication and updates - with specific information, advice and guidance would be given directly to the private sector on an ongoing basis.

Sinead McLaughlin - Chief Executive.  Londonderry Chamber of Commerce

The Londonderry Chamber of Commerce is the principal business organisation in the North West of Ireland, representing over 450 members. Our membership includes many of the largest employers in the region.

The established priorities for the Chamber are:
• Improving the skills base of the labour market in the North West, with a specific focus on expanding higher education and, through this, producing more people in the labour market with the skills needed by employers today and in the emerging technologies that we expect to see develop in the North West. In particular, this means a substantial expansion in the STEM and creative industries skills at graduate and post-graduate levels.
• DigitalDerry. We are sponsors of the DigitalDerry initiative, which we believe must form the basis for much of the future economic wellbeing of the North West and of future employment growth. We are convinced that the production of relevant skills from a local university presence is central to this vision being achieved.
• City of Culture. We are strongly engaged in City of Culture 2013, which we see as a staging post towards a vibrant commercially-driven cultural community in the city of Derry-Londonderry. We believe that performing arts, creative industries and IT-related undergraduate and post-graduate courses at a local university should be the basis for further expansion and commercialisation of the North West's cultural sector.

The Londonderry Chamber of Commerce is fully supportive of the University for Derry (U4D) project. The Chamber has endorsed the initiative, whose membership includes local business leaders, some of whom are also leaders of the Chamber. The Chamber believes that expansion of the University of Ulster's Magee campus is the single most important policy initiative available to stimulate the economy of the North West. Expansion of Magee would provide the basis for expanding the economy; for the physical regeneration of the city; and for the further strengthening of the social and community foundations of the city. It would provide the skills for the modern economy, without which our city and region will continue to dramatically underperform.

..........to view the full response please download it HERE

The murder of PC Ronan Kerr by dissident Republicans has been condemned by Londonderry Chamber of Commerce.

"We completely condemn the murder of PC Ronan Kerr," said Padraig Canavan, President of the Londonderry Chamber of Commerce. "The killing of Ronan Kerr damages society across the whole of Ireland. It is destructive of attempts to move Ireland forward and of businesses' attempts to make progress.

"As a society we have made a decision that political ends should be achieved by political means. This murder of Ronan Kerr is action taken against all the people of Ireland.

"Regardless of background we all know that this deed does nothing for our future."

The Londonderry Chamber of Commerce welcomes the opportunity to formally respond to the public consultation on the 10 Year review of the Regional Development Strategy. We support the department in this process as the review will give guidance and provide a roadmap to future planning. We welcome and understand that the review will provide RDS with a greater strategic focus to help the Executive in tackling structural regional disparities and in their pursuit of promoting equality of opportunity for all in Northern Ireland.

The Chamber would like DRD to note that we believe their document to be comprehensive and far reaching and are to be commended.

The Chamber would like to endorse and support the responses made to your Department by Derry City Council and Ilex.

Our City and region wish to move into the next period of Government speaking with one voice and in support of the one Regeneration plan and we ask all government departments to give that document due diligence as they strategise for the future.

Our City has carried out robust research across a range of indicators that points to significant socio economic differentials in comparison with other UK cities and it our belief that RDS can help redress the imbalance over the coming years.

We wish to make a number of observations relating to the RDS Consultation document:

• RDS needs to make reference to the new Regeneration Plan for Derry-Londonderry outlining our shared vision for the city for the next 10 years. Our plan has clarity and will help Government as it articulates effectively our city's strategic direction.

• Within the context of our City's Plan, The Chamber would recommend that the City be referred to as Principal City and Derry-Londonderry is clearly recognised as the economic driver for the city-region.

• In the section 2.15 on Balanced Regional Development there is no reference made to Derry-Londonderry and the North West in this context. This Chamber believes that DRD needs to weight development in favour of the NW Region. The NW has historical levels of unequal investment, including lack of joined up action, high levels of economic inactivity, infrastructural deficits, brain drain and unemployment etc

• The revised RDS must also provide a framework to facilitate cross border working to tackle the disparities and inequalities that are particular to the North West.

• We would seek assurance that under 2.18, commentary relating to the spatial distribution of employment as being predicted to remain heavily city focused that Derry-Londonderry as the Principal City of the North West is identified along with Belfast.

• We would ask that a reference to Derry-Londonderry as the Principal City for the North West be made also at 2.21 to reflect the population growth patterns projected and again reflect this in 2.27.

• Under the policy area Transportation we welcome the Department's reference to the North West corridor and the need for integrated and innovative approaches to planning and developing the transportation network and the importance of ensuring that houses, jobs, facilities and services are planned in such a way that reduces unnecessary travel within and between cities and towns. It is essential that this is progressed as a matter of urgency.

• The City's Transport Strategy document needs to be adopted by government and reflected in all future RDS. This covers proposals to develop the City of Derry airport and expand the Londonderry Port at Lisahally also need to be reinforced.

• Within the Economic Development policy area we note the recognition that there is potential for businesses to cluster in and around the 2 major development corridors - Belfast/Dublin and North West. A continued commitment to the development of the A5 and A6 is vital and will facilitate and encourage this clustering of businesses.

• Chamber is concerned that there appears to be a strategy focus on sustaining the growth of Belfast. We acknowledge the need for a strong Capital but would caution that one primary centre of employment will weaken the province. Predictions estimate that 62% of the employment will be in Belfast, Derry, Lisburn and Newry and Mourne but would express concern that it is expected that 52% of total jobs will be in Belfast and would therefore ask how the remaining 10% of the jobs/employment opportunities are allocated across the other Council areas. This clearly needs rebalanced and DRD should be supported to deliver for all.

• We welcome the recognition of the role of Derry-Londonderry in shaping future growth alongside Belfast which is borne out in the Regeneration Plan and the work that was undertaken by Oxford Economics who estimated that the potential exists to create 12,900 jobs by 2020 across a range of sectors.

• We commend DRD's aim to strengthen links between north and south, east and west, with Europe and the rest of the world. This is particularly important given the proximity of our City to the border and the history of collaboration and cross border working in the North West.

• Derry-Londonderry is well positioned and has the capacity to deliver a range of administrative functions and specialised services that are of regional significance. The proposed approach of centring on Belfast is flawed and contradicts the aspirations of a regional balance economy.

• Fort George and Ebrington, they should be designated as sites of regional and economic significance in the new RDS.

In addition the RDS 2025 needs to:

• strengthen the distinctive role of Derry City as a regional retailing centre for the North West in line with the City's Retail Strategy.

• Prioritise and maximise the strategic regeneration and economic development opportunities as identified within the City's Regeneration Plan.

• Enhance the employment potential of Derry City Centre as a regional employment hub.

• Our status as a University City should be strongly recognised together with factoring in the Growth Plan. (See Derry~Londonderry Regeneration Plan).

• Seek to focus the redistribution of existing, or new public administrative activity within the Derry as the only other Principal City in Northern Ireland.

• In addition to enhancing transport linkages, improve facilities for walking and cycling which is coordinated with infrastructure investment.

• Close the gap in the quality of life for those living in deprived areas.

• In addition to maximising the tourism potential of the City, seek to build upon and further develop the City's signature tourism destination status as well as maximising the benefits of UK City of Culture for 2013 and beyond.

• Maximise the development and regeneration potential along the Riverside Corridor to link with the Ilex opportunity sites.

• Maximise economic development opportunities at the key employment sites for example Fort George, Ebrington and sites along the A2 gateway corridor.

• Strengthen and consolidate the key regional air transportation hub at City of Derry Airport and also logistics development opportunities around Londonderry Port.

• Continuing to regenerating the City of Derry, seek to protect, promote and realise the investment value of the City's rich built heritage stock to complement with the Historic City Walls and the continued efforts to secure UNESCO cultural world heritage site status.

• In addition to building on the cross border collaboration and implementation of North West Gateway Initiative.

The Londonderry Chamber of Commerce is the largest Business Representative Business voice in the region and we commend to Government the above observations.

Finally, the above observations are not exhaustive and the Londonderry Chamber may take the opportunity to make further comments on the Department's strategic plan at a later date.

The Londonderry Chamber of Commerce welcomes the review of Ilex conducted by consultants BDO. The Chamber agrees with the observations on the difficult history of Ilex and endorses the report's six recommendations for action.

"All the recommendations would add and strengthen Ilex's ability to deliver for Derry," says Chamber chief executive Sinead McLaughlin. "We particularly welcome the call for a single sponsoring government department, as the existing complex governance arrangements and sponsorship from two departments have not helped progress.

"The welcome news in the review is that over the last few years, under the chairmanship of Sir Roy McNulty and the leadership of Aideen McGinley, the organisation has made significant advances. The Chamber recognises that a step change has taken place.

"Ilex played a key role in winning the City of Culture title for Derry-Londonderry and in improving the tourism and commercial offer of the North West. Ilex has also developed a comprehensive set of socio-economic data and assisted residents of all ages and various backgrounds to have a say in how Derry-Londonderry should be regenerated. Ilex took the lead in developing the one vision, one city, one voice and finally one plan. Ilex was unstinting in its support and encouragement for the entire city throughout this mammoth task.

"Ilex has given us the language of revival, helped us all articulate the problems and to identify solutions.
The new Peace Bridge will open this year; Ebrington Square will be finished this year; Ilex took a major role in the successful bid for City of Culture; it is promoting City of Culture as part of our culturally-driven regeneration; and is currently working on the investment strategy

"There is much more work to be done, and rather than concentrate on the previous difficulties experienced by Ilex, let us now be encouraged and harness the new energy. Hopefully over the next couple of years, with some improvement in the economy, we might ramp-up the activity and develop our assets on both the Ebrington and Fort George sites. Ilex is currently working on an investment strategy to underpin the regeneration strategy. Implementation and delivery are now our main focus moving forward and it is essential for the welfare of the city, its commerce and its people that Ilex now finishes this task."

Executive Summary and Recommendations

The Londonderry Chamber of Commerce are concerned that when all departments' draft Budgets are taken into consideration, the overall impact of the proposals is severely detrimental to the North West.

This report puts forward proposals that support the objective of rebalancing the Northern Ireland economy to make it more sustainable and to rebalance the regional economy so that the North West becomes self-financing - thereby potentially contributing to the prosperity of Northern Ireland, rather than being a financial burden.

Particular priorities for the CSR Consultation for the North West Region are:

• Expansion of the University
• City of Culture 2013
• Integrated Transport Strategy - with particular emphasis on progressing construction of A6 Scheme
• Radiotherapy Unit

The Londonderry Chamber of Commerce recognises that departments are unlikely to give serious consideration to proposals for additional spending unless equivalent savings are identified. Proposals for additional spending are therefore accompanied by suggestions on how that expenditure could be financed.

Please Note

It is important to note that the Draft Budgets that have been put out for public consultation lack very little detailed information and in the absence of this vital information this Chamber is not in a position to make an in-depth analysis or present detailed business cases based on content.

For further information or inquiries regarding this document please contact:

Sinead McLaughlin
Chief Executive
Londonderry Chamber of Commerce
The Old Fire Station
1A Hawkin Street
Derry
BT48 6RD

Tel: 02871 262379
E-Mail: Sinead@londonderrychamber.co.uk

This paper also recommends:

1. That Department of Health spending priorities are re-evaluated to enable the proposed cancer care and radiotherapy to go ahead with revenue funding support.
2. That DEL allocates £8m a year to increase the STEM MaSN at Magee by 1,000 students from 2015. These costs can be found from efficiency savings identified in this report.
3. That a priority be given to identifying savings opportunities from the rationalisation of government departments, with those savings used to promote and stimulate the higher education sector in Northern Ireland.
4. That DSD's capital programme priorities be re-evaluated to increase its support for City of Culture and the Ilex regeneration plan. Savings from improved cost control in revenue spending in the department - including through more efficient administration of social housing schemes - should be identified and where possible re-allocated to capital programmes, including the Ilex regeneration plan.
5. That DCAL's capital spending priorities be re-evaluated and appropriate allocations towards City of Culture be inserted.
6. That the A6 road programme be recognised as one of DRD's highest priorities, with a need to make urgent progress on the upgrade for its entire length between Belfast and Derry-Londonderry.
7. That if funding for the A5 is not forthcoming from the government of the Irish Republic, the funds allocated from DRD for the A5 should be reallocated to prioritising and accelerating the upgrade of the A6.
8. That the programme for the rail upgrade between Belfast and Derry-Londonderry be brought forward, for completion before 2013.
9. That the Department of Education allocate funds to capital spending to enable the new campus for Foyle and Londonderry College and Ebrington Primary School to go ahead. Those funds should be found through rationalisation of the system of school administration and by rationalising the schools estate to reduce the pool of surplus pupil places.
10. That the Department of Environment's proposed spending cuts be re-evaluated to determine if the changes to the Planning Service will damage the economy of Northern Ireland and, in particular, the North West.
11. That the charging policy proposals for on-street car parking from DRD and the business rates policy regarding out-of-town shopping centres be examined to ensure they do not discriminate against historic urban retail centres. Increasing business rates for out-of-town shopping centres to the equivalent levels of city centre retailers could generate substantial income for the Executive.
12. That DETI be asked to provide an explanation of how in future it will promote investment and economic growth in the North West.
13. That DARD should make available modest financial support to assist with developing the tourism infrastructure in the North West, to improve the use of the River Foyle and to promote boating, walking and angling holidays.
14. That DETI and DSD recognise the particularly important role that social economy enterprises have played in supporting deprived communities and a weak economy in the North West and that both departments continue to provide support to this sector.

Context

The North West of Northern Ireland has long suffered weaknesses in economic infrastructure that are much more severe than in other parts of Northern Ireland containing large urban areas. These weaknesses relate, in particular, to transport, higher education, health and tourism support.

Those infrastructure weaknesses have a relationship to economic weakness in the North West - the region has severe problems with unemployment and economic inactivity. Northern Ireland's highest rates of unemployment and economic inactivity are located in the North West and parts of Belfast. (The most recent figures show the three highest claimant count district council areas as all being in the North West - Derry at 7.3%; Strabane at 7.0%; and Limavady at 6.8%.)

The weak infrastructure is part of the reason for the economic difficulties of the North West and for the migration of people, jobs and businesses out of the region. Equally, without adequate investment in the skills infrastructure, it seems unlikely that the North West will attract sufficient (or sufficiently well paid) employment to substantially improve the economic wellbeing of the region.

Putting right that weak infrastructure is key to improving the economic wellbeing of the North West. In doing so, this can achieve a fiscal improvement of the situation for both Northern Ireland and the UK as a whole. In short, a more economically healthy North West will not require the continuing financial subsidy (such as the level of welfare benefit spending) that at present comes from the Belfast and London governments.

Submission

This short report seeks to make the case for specific infrastructure investment in the North West. This report argues that departmental draft Budgets have not sufficiently addressed regional imbalances within Northern Ireland. Rather, they are likely to make them worse, with high profile projects in Belfast and the East receiving much greater support than some economically and socially more significant projects in the North West.

It is essential that the Executive - and the Assembly - consider not only the overall Budget and individual departmental Budgets, but also the overall impact, taken together, of the various departmental Budgets. The case argued in this report is that once these departmental Budgets are taken into consideration together, it becomes obvious that the situation of the North West has not been addressed appropriately or adequately.

Abbreviated Analysis of Departmental Budgets - based on information available

1. Department of Health

The cancer care unit at Altnagelvin is one of the most important projects for the North West. The minister of finance, Sammy Wilson, deserves much praise for including the capital funding for the unit in his draft Budget. The decision of the Department of Health not to include revenue funding for the unit has drawn strong criticism in the North West.

The reasons for this are:

a. Travelling between the North West and Belfast for cancer care is arduous and causes additional negative health impacts for those patients with cancer. It can involve extended periods of separation between patients and their families, denying them emotional support when they need it - and preventing them from having the right environment to improve their chances of recovery.

b. The cancer care project was an important cross-border project, which would attract financial support from the Irish Republic and would help to create a more rational cross-border system of healthcare.

c. Cancer care provision in Belfast is nearing the limit of its ability to cope with patient numbers. Additional provision is required within the foreseeable future.

d. The cancer care provision at Altnagelvin is seen as an economic opportunity for the North West, not only from the jobs that would be created directly, but also from the spin-off opportunities in related businesses. This sector has been identified as a major commercial growth opportunity for the North West.

The Londonderry Chamber of Commerce believe that there are opportunities to make spending reductions in other parts of the health budget that would enable the cancer care unit to go ahead. The annual cost of the unit is estimated by the Trust at £7.5m. According to health minister Michael McGimpsey, the lost annual revenue from the introduction of free prescriptions for all is around £6m. While the repeal of free prescriptions for all would be generally regretted, if this would free up moves to create a proper cancer care unit in the North West this may be appropriate.

Alternatively, cost savings might be identified to release this comparatively small amount of revenue. According to the CBI, £190m of cost savings are available in Northern Ireland, by rationalising the health estate, improving GP services to reduce the use of hospitals and making more effective use of technology.

2. Department for Employment and Learning

The DEL budget assumes a massive reduction in spending on higher education. There are only modest reductions in expenditure on other budget heads - for example, in further education and employer skills programmes. This appears to be a budget that requires tuition fees to be introduced; that will not lift the MaSN (Maximum Student Numbers) cap; and will not enable Magee to grow in terms of full time student numbers. Capital spending restrictions are such that there would be no support from DEL for any expansion at Magee. This is despite the expansion of Magee as being identified in the Ilex regeneration plan as being fundamental to improving the economic outlook of the North West.

Specifically and immediately, it is imperative for the economy of the North West that Magee achieve an early increase in MaSN of 1,000 full time students in the key STEM (science, technology, engineering and maths) subjects. This would cost £8m per year, which could be found through efficiency measures.

Significant savings are possible should government departments be rationalised. It would be more logical if further education responsibilities be transferred from DEL to the Department of Education, while higher education and employers' skills training support could transfer to DETI. According to analysis by the CBI, the streamlining of Northern Ireland government departments could save between £10m and £20m a year, while improving performance.

In the medium term, there is a need for a capital infrastructure expansion grant to support the substantial expansion of Magee. Such an investment might be achieved on a cross-departmental basis, supplemented by private sector and philanthropic support.

3. Department for Social Development

DSD has allocated £5m per year for two years jointly for the City of Culture and the Ilex regeneration plan. This is a total allocation of £10m, compared to £70m for capital spending during the programme period to the redevelopment of Belfast's Royal Arcade. It is difficult to understand how it can be argued that the Royal Arcade project is more strategically important to Belfast than the City of Culture (plus the regeneration plan) is to Derry - nor even how it is more strategically important to Northern Ireland as a whole.

Significant savings should be available in the provision of social housing services: comparison with other UK nations shows a much higher cost of social housing, yet it is not obvious that this is translated into superior standards and services. There should be savings available through the rationalization of housing associations supported by DSD. The CBI has suggested that savings of around £100m should be available from reorganizing the structure of housing provision.

It is also important that DSD continue to recognise the need for regeneration of deprived communities. Social economy enterprises have for a long time played an important role in the social and economic regeneration of deprived communities in the North West and it is essential that there is support for this to continue. The role of the social economy in the North West has been recognised as a key component of the Ilex regeneration plan.

4. Department of Culture, Arts and Leisure

DCAL appears not to have allocated any funds towards City of Culture. This contrasts unfavourably with the £6m allocated to the World Police and Fire Games to be held in Belfast from 1st to 10th August in 2013. The City of Culture, of course, lasts an entire year - and is all about culture, the first name in the title of the department.

Over the Budget period, some £110m has been allocated for capital spending for three regional sports stadia - one each for football, rugby and GAA. The three stadia option is in place of the single stadium for multi-sports use, which was planned for the Maze site. It seems that all three stadia will be located in Belfast.

These spending priorities will seem perverse to many residents in the North West. The failure of the Department of Culture to provide support for the City of Culture seems particularly bizarre.

5. Department for Regional Development

The DRD draft Budget states that "there are no allocations to commence construction on other major roads schemes such as the A6 Randalstown to Castledawson" and only promises to "continue development work on the A6 Dungiven to Derry" - which may mean only further consultation on the exact route and plans. On Tuesday 13th December 2005, Mr Peter Hain, Secretary of State, announced 30 km dual carriageway from Derry, incorporating the Dungiven by-pass. Devolved Government have continually made assurances to Chamber that this entire scheme was progressing and on time for construction. It is shockingly regrettable to be informed by DRD in January 2011 that this vital road scheme is being delayed. DRD also implies that work on the improvements to the A5 are dependent on finance from the Republic, which may now be in jeopardy.
There is further unhappiness about proposals relating to the upgrade of the rail line between Belfast and Derry-Londonderry. The plan states that the department will "begin the Coleraine to Derry rail track improvement project by the end of the Budget period". This appears to mean that the upgrade will commence before April 2015 - several years later than previously intended. It had been hoped that all upgrade work would be completed by the end of 2012, to enable this unique piece of important tourism and heritage track - recognized as one of the most beautiful stretches of railway anywhere in the world - to be in place in time of City of Culture, 2013.

It is worrying that in this period of severe pressure on capital budgets, some £6m is proposed by the plan to be removed from the capital programme to be used instead for revenue expenditure.

There is also concern in the North West at the potential impact of possible on-street car parking charges. The city centre of Derry-Londonderry has been badly damaged in recent years, not least by the growth of out-of-town shopping destinations. Any proposals for on-street car parking charges in Derry city centre need to be properly consulted upon before implementation to ensure that it does not have the effect of inadvertently encouraging out-of-town shopping at the expense of the city centre.

6. Department of Education

Some £41m of capital spending allocations for 2011/12 have been reallocated by the Department to its revenue budgets. This puts on hold for the foreseeable future the development and construction of the new Foyle and Londonderry College and Ebrington Primary School. In turn, this also holds back planning for the expansion of the University of Ulster's Magee campus.

While the transfer of capital funds to revenue spending protects, hopefully, the jobs of teachers and teaching assistants, it again fails to deal with the excessive costs incurred each year by the failure to rationalise our education system and the very large number of surplus places. These issues have been identified as wasteful by both the current Secretary of State, Owen Paterson, and by one of his predecessors, Peter Hain.

It is very frustrating that progress towards the creation of a single Education and Skills Authority has repeatedly been stalled. This was expected to save around £20m a year, rising to £25m a year. Meanwhile, there are over 54,000 surplus places in our schools, wasting an estimated £100m annually (according to the CBI).

However, the signatories to this report also believe that the UK Government should rescind its decision to withdraw year end flexibilities from the devolved government of Northern Ireland - a decision that particularly severely affects the Department of Education.

7. Department of Environment

Savings identified in the Department of Environment draft Budget include a reduction in spending of £2.9m in Planning Services costs and what appears to be an increase of £2m from increased planning charges. Given that the Planning Service is already having difficulty in dealing with the backlog of applications and that existing levels of planning fees are causing difficulties for many applicants, these proposals may be incompatible with the Executive's objectives of stimulating the economy.

The proposals may also indirectly particularly harm the North West, as they may cause a slowdown in planning applications related to City of Culture 2013, which need to be handled expeditiously.

Other jurisdictions have raised significant income by levying charges on off-street (private) car parks. Such an approach may have the benefit of equalising the treatment of inner city and out-of-city retail environments.

Additional measures to stimulate the economy should be considered. These include more generous rate rebates for small businesses, particularly small retailers, and the creation of a more equitable rating system, that does not discriminate against city centres. These measures are particularly important for historic retail centres, such as Derry-Londonderry.

Departments need to take action to protect city centre retailers. This action should include setting business rates for out-of-town shopping centres at no less than those of town and city centre retailers. This would raise very substantial amounts of revenue and remove discrimination against traditional retailing centres. Particular concern has been raised about the 'double whammy' that is likely to arise from the introduction of on-street parking charges, while out-of-town retailers benefit from consumers having free car parking.

8. Department of Enterprise, Trade and Investment

DETI's draft Budget indicates two areas of substantial spending reductions. One is in the Invest NI capital budget, the other is on Selective Area Assistance. The potential abolition of SAA from 2013 is outside the power of the Northern Ireland Executive and is the result of decisions taken by the European Union. Spending by Invest NI on building infrastructure in the North West has traditionally been one of the few levers available to it to promote inward investment and the expansion of indigenous businesses in the North West.

Given the reduction of these two types of spending that have traditionally been applied in the North West, it is important for DETI to indicate what steps it expects to be taken in future to encourage higher levels of job creation in the North West.

It is also essential that DETI continues to recognise the key role of social economy enterprises in the social and economic regeneration of deprived communities in the North West. It is important that there is continued support for this through DETI's social economy programme. An expanded role for the social economy in the North West is a key component of the Ilex regeneration plan.

9. Department of Agriculture and Rural Development

Development of the River Foyle as part of Northern Ireland's impressive and attractive tourism offer is a key element of the economic development plan for the North West. A modest financial allocation is needed to support this and assist both urban and rural areas to improve their economic prospects. Additional minor investment would achieve significant benefits for the rural economy by improving the infrastructure for walking and angling holidays.

It is to be hoped that DARD will also give serious consideration to relocating its headquarters to Derry-Londonderry.

10. Department of Finance and Personnel

It would be helpful if DFP initiated action to require all departments to undertake a ‘zero base budget' review. This is an exercise in which no prior expenditure is taken as sacrosanct, each department's budget is built from scratch and every item of spending has to be carefully argued for and justified. While such an exercise may sound radical, the stringent financial situation facing local authorities in England has led to many councils conducting zero base budget reviews, through which they have achieved substantial savings. Our argument is that these savings could, at least in some instances, be allocated to support the North West, so that the economic conditions improve and the region becomes financially self-sufficient - thereby removing the need for continued subsidy from the Northern Ireland and UK exchequers.

11. Office of the First Minister and Deputy First Minister

Ebrington Barracks is recognised by OFMDFM as one of two major regeneration projects to be funded by the Office: the other is the site of the former Maze prison. Accordingly, some £23.12m has been allocated for capital contributions to the Ebrington Barracks site over the forward period of the plan. In this regard, OFMDFM could be regarded as the only department to provide an apparently reasonable level of support for the North West region in its forward plans. (Arguably, the Department of Finance and Personnel might also be spared from criticism, on the basis that funding was explicitly made available for the construction of the cancer care unit at Altnagelvin.)

However, it is not clear from the spending plans why the majority of these funds - £14m - is earmarked for spending in 2014/15. It would be preferable, if realistic, to complete the majority of the work on the Ebrington site by 2013, in time for City of Culture.

Yet the scale of investment from OFMDFM remains inadequate given the scale of the challenge in Derry-Londonderry. City of Culture projects need perhaps £100m or so investments to facilitate the expansion of arts, culture and tourism sector projects and city infrastructure to allow these sectors to flourish beyond 2013.

Other measures will be required from government as a whole to stimulate an economy that is severely damaged. Those measures that should be considered include a North West economic zone offering special assistance to foreign direct investment, including 100% capital allowances on new investment, 100% rates relief for five years, NIC holidays for new job creation, with VAT reduction to 5% on hotel accommodation across Northern Ireland.

There needs to be clarification over the future of the regeneration delivery vehicle, with a commitment to implementation and delivery over the medium-term.

The Londonderry Chamber of Commerce responded with caution to finance Minister Sammy Wilson's announcement of the Draft Budget.

"The first positive aspect of the draft Budget is that it has been published - after weeks of uncertainty about whether devolved ministers would get this important part of their job done. Well they have and that is excellent," said Jim Sammon, Chamber President.

"The second positive thing is that the two departments that have been given an uplift in their departments' spending allocations are the two economic departments - DETI and DEL. We welcome the fact that the Executive has restated its commitment to economic growth as the main priority and by its actions in supporting that priority. We are also very pleased that capital funds for the creation of a radiotherapy centre at Altnagelvin have been confirmed.

"There is also the prospect of a third positive implication of the Budget - that the Executive's ministers will consider the benefits of having the power to reduce the Corporation Tax rate in Northern Ireland. Sammy Wilson said this would be in response to the Treasury's paper on Rebalancing the Northern Ireland Economy, so this sounds as if that paper, which we have yet to see, supports a reduction in the Corporation Tax rate for Northern Ireland. That would be an excellent move.

"However, there are several aspects of the Budget that are to be regretted. While we appreciate the Executive's efforts to support the capital programme by diverting £250m from revenue spending to infrastructure expenditure, this still means that our capital programme going forward is not large enough to support the expansion of our economy. There is a lack of clarity about whether key infrastructure projects affecting the North West and City of Culture will now go ahead.

"We are also very concerned about how ministers will conduct departmental spending reviews. There are opportunities to make savings through the improvement of service delivery mechanisms and by rationalisation. It is to be hoped that ministers make the right choices and eliminate waster, rather than cut essential services that people in the North West, especially, depend upon."

There are no winners in the ROI emergency budget. The extreme spending cuts including cuts in Education and health, together with € 1.8 billion reduction in capital spending makes this a very worrying situation for Northern Ireland. As our closest neighbours we share one another hardships and as a border county we have every reason to be concerned at the draconian budget. The economy in Derry relies fairly heavily on a healthy economy within ROI. The increased personal taxation of up to 10% will have a significant impact on consumer spending and we will no doubt feel the pinch within the city, particularly within the retail and tourism sectors. We in the North West have important linkages in both trade and export which both governments are intent on ensuring that these linkages are maintained and protected.

On a more positive note we have been heartened by The Taoiseach, Mr Brian Cowans, continued reiteration that the capital funding for the A5 is secured and we will continue to press the government to invest in cross border capital projects that will help grow and develop the all Ireland economy.

Sinead McLaughlin - Chamber of Commerce, Chief Executive

The Londonderry Chamber of Commerce has warned that capital programmes must be protected from the Comprehensive Spending Review cuts.

Sinead McLaughlin, chief executive of the Chamber, said:

"Revenue cuts imposed by Westminster may be painful, but our government departments should be able to cope with these.  What the North West cannot cope with is any reduction in capital spending.  Our infrastructure is weak and desperately needs renewal and improvement.  Economic activity will not increase unless the conditions for businesses are improved - and that requires public spending on infrastructure.  Not only would that help our badly suffering construction industry, but it would also assist local businesses to expand and help attract inward investors."

Jim Sammon, President of the Chamber, said:

"The North West must have better road connections, both with Belfast and with Dublin. And we need those urgently.  Our rail link with Belfast must improve - and we would like that to be accelerated so that it happens before 2013 City of Culture and not subject to any delays.  Capital spending is needed at Altnagelvin, to improve local cancer care.  Foyle and Londonderry and other schools need new campuses.  We need the expansion of Magee. 

"The North West needs more to be spent on infrastructure than does any other part of Northern Ireland - and that is because of the terrible underinvestment here that has gone back many years.  The risk is that the North West may do worse from the Comprehensive Spending Review than any other part of Northern Ireland.  It is very important that Northern Ireland's politicians unite to protect capital programmes."

Comments on the Published IREP from Londonderry Chamber of Commerce

• Commend the Minister for establishing this review which is direct response to concerns expressed by business organizations such as Londonderry Chamber of Commerce.
  
  
• Welcome in particular the emphasis on Innovation and R&D. The focus on higher value added jobs for the people of Northern Ireland is entirely the right way to approach economic policy and fits very well with the emerging outcomes from the Derry's regeneration plans.
  
  
• Agree with the recommendation that INI and DETI should become more flexible in how support is provided and hope that this move away from programme and compliance based support to a much more entrepreneurial and less risk adverse approach can be speedily introduced. The Chamber in Derry are particularly pleased that this has been addressed in the report given their input which said,

 "A considerable amount of our feedback from members centered on the high levels of bureaucracy, slow response times to queries and perceived disincentive to business to take any level of risk. Some smaller member companies who had previously been served by the LEDU suggest that Invest N I is much less flexible in it's approach with much less delegated authority to client managers."

• Endorse the focus on supply chain integration for smaller companies which will be extremely important for our members and support in developing strong export markets is also of critical importance.
  
  
• Welcome the realignment of the education system to meet demand for STEM.
  
  
• Welcome the sense of common purpose and the proposed merger of DEL and DETI economic functions and giving the next ISNI greater economic focus.
  
  
• Areas of concern include:
  
  • The phasing out of grants to business which do not relate to R&D and the reduction of support for company training. We need to be careful not to make Northern Ireland uncompetitive in the global space. For the NW, the way these recommendations are implemented will be of critical importance
    
    
  • The lack of importance given to infrastructure as being a key component of economic success
    
    
  • Another area of concern that the Chamber had put forward is that within the suite of economic policies and throughout the DETI Corporate plan is the lack of emphasis on Balanced Regional Development. Despite the existence for some years now of a spatial strategy for Northern Ireland and Regional Development Strategy that identifies Derry as the Hub and Regional Capital of the NW, the potential of a key city such as Derry and its cross-border hinterland to contribute to the achievement of the PFG productivity goal members feel is largely ignored. At a strategic level, the Chamber feels this is of critical importance if NI is to achieve real and meaningful success in narrowing the productivity gap. A strong NI needs a strong NW.
    
    
  • We would like to have seen more emphasis on this regional aspect

For further information contact Chamber CEO, Janice Tracey janice@londonderrychamber.co.uk

Chamber represents members interests through a number of different mechanisms - in the media, direct meetings with Ministers, engagement with senior civil servants, and written responses and policy papers to various consultations. A number of strategy and policy documents are currently out for consultation that will have an impact on members operating environments.read more >