The Northern Secretary, Dr Mo Mowlam, has defended the performance of the Industrial Development Board following the publication of a report by the Northern Ireland Economic Council criticising the agency for failing to meet government objectives.
The report, The Implementation of Northern Ireland's Economic Development Strategy in the 1990s, examined the extent to which the current strategy - Competing In The 1990s - had been implemented.
Introduced in 1990, this strategy aimed to include a reduction in financial assistance, particularly automatic capital subsidies, and a greater emphasis on training, innovation, marketing and research and development.
An enterprise culture would replace the dependency culture, and human, rather than physical, capital would be assisted.
The NIEC report, however, finds "a considerable gap between the rhetoric and the reality", and singles out the lead development agency, the IDB, for its "very limited progress" in implementing key elements of the strategy.
In response to criticism of the IDB, Dr Mowlam said the report did not include the most recent figures for amounts of grant aid distributed by the IDB, and that the agency's approach had undergone a radical change since the early years of the decade.
"The amount of selective financial assistance which the IDB offered in 1998-99 shows a reduction from an average of £155 million (€197 million) in the previous three years, to £66 million. There is also a greater emphasis on job quality and working with companies which are committed to adding value, improving competitiveness and competing globally," Dr Mowlam said.
The council also criticises the government's own allocation decisions in the annual public expenditure survey, which it says have not been consistent with its own economic development strategy.
"At the macro level, there has been little reduction in overall public expenditure on economic development, either in absolute terms or relative to Great Britain. Timetables and benchmarks for the implementation of the economic development strategy have not been set, and public expenditure has not been reallocated to training and R&D by channelling an increased share of the [Department of Economic Development] resources to the Industrial Research and Technology Unit and the Training and Employment Agency," the report says.
Dr Mowlam said government policy had helped the Northern Ireland economy to grow strongly in the 1990s, producing record investment and job creation, but she agreed there was a need to continue to promote an enterprise culture and to reduce grant dependency.
The report, described by Dr Mowlam as "a welcome contribution to the ongoing debate on economic development policy", says public expenditure on trade, industry, energy and employment, and regional assistance should be reduced by at least 15 per cent between 2000 and 2005. It should be reallocated to "areas designed to raise the long-term productivity of the Northern Ireland economy", such as the expansion in the number of places in higher and further education, and the reversal of recent cuts in funding university research and development.
