BELFAST BRIEFING:Cutbacks are inevitable, but the Executive must be careful when deciding what should take a hit, writes FRANCESS McDONNELL

A STRIKING bronze sculpture due to be unveiled in Belfast this week to commemorate the city’s industrial heritage could also unwittingly mark a new chapter of economic austerity for the North.

The sculpture of a female mill worker harks back to a time more than 100 years ago when 96,000 people in Belfast worked in the linen industry.

Linen profits helped to build the city of today but the industry also created horrific working conditions for some of its poorest workers, condemning many to a life of misery.

The beautiful bronze, which will be located in north Belfast, seeks to remind people of the city’s link with its not-so-distant industrial past.

But it also serves as a reminder of a time when the city was on the brink of a new economic future and when it was one of the fastest-growing industrial centres in Europe.

There may have been misery in the working-class trenches but there was also hope and the prospect of a better future.

Belfast can no longer lay claim to being an industrial giant and there is a sense that a new wave of economic misery without any prospect of escape may just be around the corner.

Sweeping public-sector cuts unveiled by the UK’s new coalition government are set to chop up to £128 million (€149 million) from the Northern Ireland Executive’s local budgets. In a city like Belfast, the impact of this on the ground will be severe.

The budget cull comes on top of an estimated £393 million in cutbacks already planned for the North this year.

The substantial cuts should not have come as a surprise to anyone – particularly the Executive, which had been well warned they were on the way.

But the question now is how well the North’s political leaders are placed to deal with the shortfall the cuts will create in local budgets. The Executive has been given the option of deferring the cuts but the decision on where they will fall will have to be taken at some stage.

Esmond Birnie, Northern Ireland chief economist with PricewaterhouseCoopers, says the spending crisis “offers the Executive an opportunity to demonstrate leadership and forge partnerships between the public, private and voluntary sectors”.

Birnie believes it could also provide the Executive with a once-in-a-lifetime chance to “develop imaginative policies to regenerate the economy and maintain strategic infrastructure investment”.

But the issue is how and where it takes a leap of faith.

There has been a welcome swell of job boosts since the beginning of the month, which has shone the spotlight firmly on the North’s ability to attract new and repeat investors even in an investor-challenged climate.

Last week Cavan-based Kingspan confirmed plans to invest £47 million in a major expansion of its Northern Ireland operations.

The investment programme, which will be rolled out over the next five years, is expected to generate up to 163 jobs at Kingspan’s Co Armagh facility.

Just days before the investment injection from Kingspan, US multinational General Electric announced its intention to create 104 jobs in Co Antrim as part of a significant expansion project for the North.

The North’s Enterprise Minister, Arlene Foster, recently remarked that for every investment the North secures it has to be won in the face of a global recession and against fierce competition from other potential locations.

Undoubtedly one of the factors that helps Invest NI, the regional economic agency, to attract new investors is the level of financial support it can provide to assist investment projects.

Kingspan has been offered financial support packages totalling £6.5 million from Invest NI towards the overall cost of its £47 million investment project, while General Electric was offered in the region of £981,000 towards its expansion project.

If Invest NI was to suffer a major reduction in its budget and was unable to provide this level of financial assistance, would potential investors be tempted to look elsewhere?

In the cold light of day there is no debate about the answer to that question, and Invest NI could be an easy target for the Executive if it is seeking to save a few million.

But if the Executive imposes sweeping cuts on local agencies such as Invest NI, what impact might that have on the wider economy and job prospects down the line?

This is why a serious debate is needed on where the budget cuts in the North, which are unavoidable, will be made.