BELFAST BRIEFING:The North no longer has enough cash to fund specific demands from the two communities, writes FRANCESS McDONNELL

THERE IS nothing like a budget crisis to focus the mind as the Northern Ireland Executive is fast discovering. But what it might not realise yet is that the perfect economic storm might also contain a silver lining.

There is no question that Northern Ireland will feel the brutal impact of sweeping public spending cuts and welfare reforms in the immediate future. There is also little doubt the combination of the recession and government cutbacks will see thousands of jobs lost.

But it has taken one of the smaller industry groups, the Royal Institute of Chartered Surveyors, to point out for the first time that the budget crisis might also create a rare opportunity for political leaders to deal with one of the economic legacies of the Troubles. It believes now is the time to address what it describes as the “cost of division” in the North.

In the past Ministers had the luxury of having enough cash to fund specific demands from the North’s two communities, to keep the peace so to speak. But as Ben Collins, the institute’s Northern Ireland director, highlights there is no longer a pot of gold at the end of that particular rainbow.

Collins says the actual cost of division – ie, providing the same service or facilities to two communities perhaps in different locations or under different guises, has been disputed. What is clear now is that the practice is “debilitating and unsustainable”.

“In addition to the cost of the double provision of services of a divided society” on the public purse, Northern Ireland has also lost out on “a huge amount of tourism and inward investment over the years”, Collins believes.

“In terms of tourism alone, it has been estimated that Northern Ireland could have generated up to £1.5 billion in additional revenues over 20 years if societal divisions had not existed.”

The institute is urging political leaders to ensure the capital spending budget plays a key role in local economic development. According to Collins, the Executive should spend money on projects that will create a “shared future” for Northern Ireland.

“Spending, for instance, should be focused on providing integrated facilities and on ensuring projects help bring communities together. Doing so will have large, long-term economic benefits.”

The institute is calling on local political leaders in their budget discussions to ensure the Executive first addresses the issue of division.

Minister for Finance Sammy Wilson needs no convincing that difficult decisions are looming over spending plans.

He says doing nothing is not an option, but it appears that not all of his Executive colleagues are convinced if the debates between the various political parties behind the scenes at Stormont over the projected budget cuts are anything to go by.

Anyone who needs convincing should take a close look at the latest economic analysis published this week by Ulster Bank. It shows the North’s private sector is not simply struggling but in desperate need of a lifeline.

Richard Ramsey, the bank’s chief economist in Northern Ireland, says that in October private firms reported their “sharpest decline” in three months.

To put this in context, he says private sector companies in the UK recorded their strongest rate of growth in the same period.

Ramsey says not only is the local economy moving in the opposite direction to the UK generally, but it is also continuing to experience job losses and falls in new business orders.

“There has been only one month in the last 35 when Northern Ireland firms have not posted a fall in business output,” Ramsey warns. “At a regional level, those areas most exposed to the public expenditure cuts – Northern Ireland, Scotland and Wales – have already gravitated towards the bottom of the UK regional league table. These regions are expected to underperform the rest of the UK going forward,” he said.

The construction sector recorded its sharpest rate of decline last month since March last year, in contrast to continued expansion in the UK’s construction industry.

If ever there was a time for Northern Ireland to put its differences aside for the good of the economy, today is the day.