Twenty-five years of devolution: what progress on productivity and skills?

Northern Ireland has poorer productivity than the other two devolved nations. At a recent event in Belfast, researchers, politicians and policy officials discussed the roles of skills, training, childcare and apprenticeships in boosting the nation’s economic performance.

Northern Ireland has the poorest productivity of any region in the UK with a productivity gap that has persisted from before the partition of Ireland. If the UK as a whole has a productivity puzzle, a cynic may view Northern Ireland’s productivity gap as a Gordian knot.

These challenges – as well as the successes – of Northern Ireland’s economy, 25 years after devolution, were the topic of a recent event co-hosted by the Northern Ireland Productivity Forum and the Economics Observatory.

Nearly 200 people gathered at Queen’s University Belfast in late June 2024 for the second in the Observatory’s series of events marking a quarter of a century of devolution in Northern Ireland, Scotland and Wales.

The opening panel of experts on skills and the economy took a deep dive into the education and training reforms needed to boost Northern Ireland’s productivity with David Jordan (Queen’s University Belfast) questioning Sandra McNally (University of Surrey and the Centre for Economic Performance), Graeme Roy (University of Glasgow and a lead editor of the Observatory) , Seamus McGuinness (Economic and Social Research Institute) and Ann Watt (Pivotal).

The second panel welcomed representatives from four of the leading political parties in Northern Ireland: Phillip Brett (Democratic Unionist Party, DUP), Sorcha Eastwood (Alliance), Claire Hanna (Social Democratic and Labour Party, SDLP) and Glen Miller (Ulster Unionist Party, UUP). Each were quizzed by BBC Northern Ireland’s business and economics correspondent Clodagh Rice on what they perceived to be the successes of devolution over the past 25 years, as well as challenges and opportunities for the future.

Here we briefly summarise some of the key themes highlighted by speakers, and questions from the audience, across the two panels.

Education and skills

Sandra McNally began the discussion outlining the importance of education and skills development as drivers of productivity. One reason for Northern Ireland’s low productivity is its poor educational outcomes compared with the rest of the UK. For example, Northern Ireland has the highest percentage of early school leavers and those leaving without any qualifications (Jordan, 2022).

Early years

Panellists also focused on the significant impact of early years on health, education and life outcomes (Department of Education NI, 2021). They welcomed Stormont’s £25 million support package for early years provision, but warned that it did not go far enough (DoE, 2024).

The complexities of the Northern Irish childcare sector were highlighted, including dependence on small providers, particularly in rural areas. Claire Hanna suggested using pre-existing school infrastructure to improve efficiency and affordability; while Sorcha Eastwood noted that low wages and limited training opportunities should be addressed in a sector where staff are mainly women.

Grammar schools

Seamus McGuinness and Sandra McNally both emphasised the role that grammar schools can play in perpetuating economic inequality. In particular, wealthier families can afford tutoring, which gives their children a greater chance of passing the entrance exams. Rather than boosting social mobility, grammar schools can limit the opportunities for pupils from low-income families.

Further educational training, vocational training and apprenticeships

Further education and alternative pathways have been successful in increasing productivity (Productivity Institute, 2023). But as Seamus McGuinness stressed, in Northern Ireland, these options have been squeezed by schools and universities. Beyond funding, the status and identity of these institutions and pathways must be improved, particularly among parents.

In England, funding of apprenticeships has increased productivity (McNally et al, 2020). Sorcha Eastwood echoed the views presented by the first panel and called for apprenticeship reforms in Northern Ireland.

Lifelong learning

To meet the continually changing demands of the workplace, Graeme Roy suggested that a ‘radical rethink’ of skills development was necessary. Both panels highlighted the need for more investment in on-the-job training. Glen Miller referenced good managerial practices as drivers of productivity in small firms and called for greater access to training for Northern Irish business owners, as suggested in a recent report (Jordan et al, 2023).

Productivity is one of the four key priorities for economic development in Northern Ireland. Graeme Roy pointed to the role of Scotland’s productivity agency in its recent success. Likewise, Seamus McGuinness emphasised the benefits of Ireland’s evidence-based approach to policy (McGuinness et al, 2024).

Economic inactivity

Northern Ireland has the highest rate of economic inactivity in the UK, with economically inactive people accounting for 26.7% of the working age population (Pivotal, 2024). Ann Watt emphasised the complexity of economic inactivity: a recent report by Pivotal found that there is no single cause and, as such, the problem requires a holistic policy approach.

Northern Ireland also has the lowest disability employment rate (UUEPC, 2022). The gap between disabled and non-disabled people is also seen in educational attainment. The disability gap in Northern Ireland was labelled a disgrace by several panellists.

The legacy of the Troubles and the pandemic on health, particularly on people’s mental health, was another focus for the panellists (Pivotal, 2024). Earlier intervention to improve health outcomes was suggested as a possible way to prevent economic inactivity.

The politicians echoed the policy suggestions of the experts, agreeing that the NHS, mental health and disability services required greater funding. Yet when questioned about revenue-raising, the four political representatives were hesitant to call for tax increases. Phillip Brett pointed to potentially outdated tax relief loopholes that could be closed to help to fund these needs.

Governance

An audience member questioned whether progress was possible in Northern Ireland given the stop/start nature of Stormont. The panel of experts warned that fixes would not happen overnight and required buy-in from politicians. Claire Hanna and Sorcha Eastwood referred to internal barriers within Stormont that are slowing progress. Nevertheless, there was optimism regarding cross-party cooperation, with successes such as the All-Party Group on Skills being noted.

Conclusion

The event was successful in bringing together academics, politicians, policy officials and members of the business community. The constructive and illuminating conversation was a welcome start in addressing Northern Ireland’s productivity problems.

Where can I find out more?

The Good Friday Agreement at 25: Graham Brownlow, David Jordan and John Turner examine productivity in Northern Ireland since the signing of the Good Friday Agreement in 1998.
Why the UK needs a new institution for growth and productivity: Bart van Ark and others on the need for a commission for productivity in the UK.
Can Labour revive Northern Ireland’s economy? Post-election piece in the Financial Times drawing on the discussion at the event summarised above.
Devolution at 25: Productivity and skills: Details of the event and links to related articles.