Background
to the
Research
- Prior to the late 1980s district councils
involvement in economic development had been minimal, despite the powers
given to them in this area in the Local Government Act (1972). Two initiatives
in the late 1980s gave impetus to district councils involvement. LEDU,
the IFU and the EU funded the establishment of LEA premises in each
district council area. Secondly, the Tourism Operational Programme initiative
(1989-93) allowed councils to apply for funding for major public sector
tourist projects.
- The Local Government Order (1992) gave
councils the power to make payments for promoting LED to an annual limit
of 2p in the pound of the rateable value of the district - this was
raised to 5p in April 1995. In 1994/5 £3 million (1.2%) of district
council expenditure was used for LED. The LEDM was introduced under
the Single Programme Document for NI Structural Funds in the mid 1990s.
Research
Approach
- The authors sought to explore the socio-economic
and labour market context at council level, councils potential spend
on LED, the allocation of funds under the EU LEDM, councils economic
development strategies and planned expenditure strategies.
- The authors carried out documentary research
of councils' powers and potential expenditure in relation to LED and
reviewed and analysed the 26 councils' economic development strategies
and action plans. In-depth interviews were carried out with 5 councils
- Ballymena, Belfast, Derry, Fermanagh and Magherafelt. Interviews were
conducted with representatives of the voluntary and community sector
in NI.
Main
Findings
- The Robson Deprivation Index shows that
at district council level deprivation is mainly concentrated in Belfast
and in the predominantly Catholic West and South of the region. The
Greater Belfast areas and the rural East, which are predominantly Protestant
are less deprived.
- In the planning of labour market services
the DED uses TWAs as the minimum unit of analysis, the TEA uses 5 geographical
areas and LEDU 6 regional offices. Therefore, because of the small size
of some councils, there is a case for councils to co-ordinate and co-operate
in joint projects.
- Estimates of labour force and employment
growth in the next 5 years, based on past trends, show employment in
Catholic council areas would need to grow by between 10% and 15% between
1995-2000 to match labour force growth. Based on data from the last
2 decades employment is unlikely to grow by more than 7%. In predominantly
Protestant areas, both employment and labour force growth is lower and
the gap narrower.
Council
Expenditure
- The maximum expenditure by district councils
on LED in 1994/5 is estimated to be £9 million, this is equivalent to
2% of total government expenditure on economic development in NI. Assuming
that councils could gain matching funds from the EU and the private
and public sectors at a ratio of 1:3, the maximum could rise to £36
million per year.
- There is wide variation in the rateable
value of council districts, Belfast has the highest and Strabane the
lowest. Eleven of the 26 council areas have a majority Catholic population
and a rateable value lower than the NI average. In contrast, 7 of the
15 which have a majority Protestant population have a rateable value
higher than the NI average.
- Deprived areas have lower rateable values
and have less to spend on economic development and are less able to
raise the rates to meet greater expenditure or raise income from other
sources.
Allocation
of the LEDM
- The allocation of £8 million of EU structural
funds under LEDM from 1995-97 was based on the quality of councils'
action plans and the amounts councils could raise through the rates.
Belfast, Antrim, North Down, Derry, Ballymena, Coleraine, Lisburn and
Craigavon have received more structural funds per head of population
than the NI average. All are in the Belfast TWA or the North East of
the province, except Derry. Outside urban areas, the share has favoured
areas with high employment and low unemployment.
- The 5 areas with the lowest share per
head of population are Newry and Mourne, Dungannon, Newtownabbey, Strabane
and Cookstown. These areas are predominantly Catholic and have high
unemployment, except Newtownabbey.
- The allocation of structural funds has
tended to shadow and reinforce inequalities because LED spend is linked
to the rateable value of district council areas. On the other hand,
the allocation of District Partnership sub-programmes of the EU special
PPR is made on the basis of need and population share.
Councils'
Economic Development Strategies
- Councils appear to have consulted widely
with statutory and non-statutory agencies, the voluntary and community
sector, business and, in some cases, academics.
- Representatives of the community and
voluntary sectors reported, in some areas, that the consultation process
was perceived as inclusive and took into account the views of local
communities. Others felt that the emphasis was on securing funding without
much regard to proper planning.
- In Belfast there was a perception of
poor co-ordination between the activities of the council and agencies
such as MBW. There was concern that the council viewed economic issues
as the focus of their work and TSN was MBW responsibility.
- Most of the SWOT analysis (which formed
part of the local action plans) were adequate, however overall there
was a lack of adequate data and research at sub-regional level in NI.
The degree of focus on TSN varied from negligible to adequate, although
it was clear that many councils took social issues seriously.
- There was a high degree of mis-match between
the SWOT analysis and the action plan. Links between the SWOT analysis
and the action plans on TSN issues were noticeably weak.
- In general, and with the exception of
Fermanagh, the action plans contained no mechanism by which programmes
would be prioritised nor any criteria for prioritising if funding was
not available.
- While councils have identified potential
funding sources, few have identified the required funding commitments
by source. The range of required external funding varies between councils.
In several cases councils appear to rely solely on EU Structural Funds
for matching funds.
- In general there is an urgent need to
establish appropriate monitoring and evaluation procedures on a common
basis.
- In relation to equality issues, on average
councils' planned budgets for local economic development expenditure
between 1995-97 were split 75%/25% between business-physical development
and social projects. There was considerable variation in the spend for
social projects, with Ards and Ballymoney spending 5% and North Down
spending 54%.
- Councils had different levels of confidence
in their ability to deliver economic development programmes. All felt
confident in their ability to tailor programmes to fit local needs when
given the power to do so. Some councils felt that statutory agencies
were not alive to the potential for councils to shape mainstream programmes
to meet local needs.
- Some councils, more than others, are focusing
on particular geographical locations and/or areas of deprivation and
some are focusing on specific programme areas.
- Some councils are ring-fencing PPR functions
from mainstream economic development functions and some are focusing
on community level LED. Whether community and economic development functions
are separated is a key factor in how new LED resources are distributed.
- Councils whose institutional structures
are closely tied to the funding structures supporting them have less
confidence in their capacity than those that develop their own strategic
vision for the community separate and apart from funding requirements.
Conclusions
- One of the major roles that councils are
likely to have is to act as co-ordinator of local efforts and mediator
between the regional agencies and local communities.
- There is scope for councils and local
communities to contribute to increased effectiveness and value for money
from mainstream spending by relating and targeting regional programmes
to local needs and opportunities. However, over- fragmentation of economic
development is possible.
- The main objective of the LEDM is to
promote economic development and not to address equality/equity issues.
It is unclear whether all councils, in their development strategies
and action plans, have taken TSN and equality issues into account. Although
a number of councils, in emphasising community capacity building, have
contributed to giving the issue a higher profile.
- The allocation of planned spend between
primary economic and social programmes and projects demonstrates no
clear connections between expenditure and opportunity or need. Several
affluent councils areas plan to spend more on social projects, while
several council areas with high unemployment and deprivation levels
plan to spend the least.
- The main responsibility for TSN remains
with the statutory agencies. The development of local district partnerships
under the LEDM and the PPR should promote TSN objectives by making the
statutory agencies more responsive to local need, yet some of the councils
interviewed saw little evidence of this happening.
- The link between the spending limit on
LED imposed on councils and the penny product from the rates favour
more affluent areas. Council areas with high unemployment and deprivation
levels can spend less than areas where levels are low.
- The current system is likely to reinforce
differences between councils and is likely to prevent convergence in
socio-economic conditions between council areas. A fairer system may
be to raise additional taxation through the regional rate, rather than
the district rate, and redistribute this according to need.
- The allocation of the EU special PPR
to district council partnerships is based on population and deprivation
and may be a more appropriate allocation mechanism than the LEDM.
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