Budget is endorsement of Executive says PwC

Following on from Tuesday's budget announcement, leading business consultancy PricewaterhouseCoopers has said that not only had the five-year £2 billion spending package demonstrated forward-thinking, but it was also an overwhelming endorsement of the Executive’s Strategic Investment Programme.

PwC's chief economist, Philip McDonagh, said that the budget was also an acknowledgement that the Executive got their sums right, but warned that it will cost at least £6 billion to modernise Northern Ireland’s creaking infrastructure.

Mr McDonagh also expressed his concern at the level of Public Private Partnerships (PPP) investment contained in the provisions as it may not be enough to path the way to prompt reform.

“(NIO Minister) Mr Pearson says that if Northern Ireland is to become internationally competitive it must have a 21st century infrastructure – few can dispute that. However, the cost of modernising Northern Ireland will have to be paid for and the introduction of water charges and an overhaul of the rating system will become the primary means of footing the bill,” he said.

PwC believe that PPP's have been significantly under-utilised in Northern Ireland, compared with other regions and that the Strategic Investment Programme offered the Minister greater scope to use PPP this time around.

Mr McDonagh added: “It is important that funding is also available to tackle the causes of sluggish economic growth – like poor workforce participation rates, low per capita GDP, and an imbalance between traditional and knowledge industries.

“PwC has consistently argued that there is no quick fix for the Northern Ireland economy and that the level of infrastructure investment will dictate the pace of economic recovery, business confidence and social inclusion. Now Mr Pearson is saying the same thing.”

Elsewhere, Sinn Fein's Francie Molloy has warned that PPP's could precipitate higher tax rates in the future.

Mr Molloy was making his comments ahead of the party's conference of all-island representatives in the Frank Gillen Centre in Belfast on Saturday.

He said: "The use of private money to build and run the services may enable a rapid start and possibly a greater investment, but the reality is that money will have to be paid back with considerable interest by taxpayers.

"The more private money is used over the years, the larger the proportion of taxes going straight into the pockets of private investors will be and the greater restriction on future spending plans."

Sinn Féin will publish a discussion document on the use of PPP's at the conference.

(GMcG)