Invest NI: A Performance Review

Date of Issue: 27 March 2012 

Invest NI: a performance review

Mr Kieran Donnelly, the Comptroller and Auditor General, today issued `Invest NI – a performance review’. This report examines the strategic performance of Northern Ireland’s primary economic development organisation from its formation in April 2002 to March 2011.

Conclusion

Invest NI operates in a challenging environment. Its performance over nine years shows steady progress measured against the targets it has set. In a complex picture of performance, there have been some important successes but there remain some areas where success has yet to be achieved.

In its first nine years, Invest NI spent almost £1.5 billion. This includes £674m on Selective Financial Assistance, £208m on Research & Development (R&D), £111m on company development and training and £30m on its Start a Business programmes. Invest NI estimates that this has resulted in a range of benefits, including the promotion of over 42,600 new jobs, safeguarding of over 19,400 jobs and planned investment of £5.5 billion in the Northern Ireland economy. Invest NI has developed a framework of three year Corporate Plan and annual Operating Plan targets for measuring its performance.

Invest NI’s performance against targets

Performance in Invest NI’s most recent Corporate Plan period 2008-11 was the strongest to date. It achieved all its major targets in job promotion, investment, exports and in targeting social need, including promoting over 7,500 new Foreign Direct Investment (FDI) jobs.

In its first two Corporate Plan periods 2002-08, Invest NI’s performance was mixed. During 2002-05, just over half its targets were achieved. Whilst targets for the number of FDI projects and local business start-ups were surpassed, there was considerable under-performance in R&D, export sales and high growth business starts. In 2005-08, Invest NI achieved a majority of its targets.

A number of Invest NI’s targets in the first two Corporate Plan periods were insufficiently challenging. While this calls into question the strength of performance achieved, it also illustrates the improvement during 2008-11 when more challenging targets were achieved under less favourable economic conditions.

Research and development

Invest NI’s R&D programmes have helped to significantly increase R&D investment in Northern Ireland. During 2008-11 R&D investment by its client companies increased almost three-fold compared to previous levels, virtually eliminating the gap in business expenditure on R&D between Northern Ireland and the rest of the UK. However, the degree to which this has contributed to improved productivity has not yet been quantified.

Job creation

Envisaged as a wealth creation agency, Invest NI does not have job creation targets. It has reported performance in terms of jobs promoted (i.e. those projected at the start of a supported project), but has also attempted to measure the proportion of jobs actually created. The most reliable estimate suggests that 21,000 of the 28,000 jobs promoted between 2002 and 2008 were created, although not all of these may have been fully attributable to the assistance provided by Invest NI due to ‘deadweight’1.

Analysis by Invest NI suggested that its client companies had created 28,873 jobs between 2002 and 2007, although in the same period 28,545 jobs were lost. Separate external analysis suggested more positive results: a net increase of 3,000 jobs (3.7%) between 2001 and 2007. Invest NI is assessing current performance in this area and is committed to developing performance targets for job creation.

Job quality

Higher value jobs boost economic productivity and raise living standards. Over 9,000 new jobs created before 2008 were in `contact centres’, and only a third of these had salaries above the private sector average. In 2008, Invest NI introduced formal job quality targets, and recent performance has improved markedly – 75% of new FDI jobs promoted between 2008 and 2011 had salaries above the private sector average.

`Transform’ – Invest NI’s change management programme

In light of the Barnett report, Invest NI launched `Transform’, a major change management programme in February 2010. At March 2011, significant progress had been made in implementing `Transform’, including rationalising its various schemes for supporting business; developing a skills training programme; focusing on firms seeking export-led growth; establishing new delegated financial limits and casework procedures to improve its response to customers; and introducing new arrangements for managing major projects.


Notes for Editors

  1. The Comptroller and Auditor General is Head of the Northern Ireland Audit Office (the Audit Office). He, and the NIAO, are totally independent of Government. He certifies the accounts of Government Departments and a range of other public sector bodies. He has statutory authority to report to the Assembly on the economy, efficiency and effectiveness with which departments and public bodies use their resources. His reports are published as Assembly papers.
  2. This report is available from the Stationery Office throughout the United Kingdom. It is also available on the Audit Office website at www.niauditoffice.gov.uk. The report is embargoed until 00.01 hrs on Tuesday 27 March 2012.
  3. Background briefing can be obtained from the Audit Office by contacting Neil Gray (028 9025 4345) or Alan Orme (028 9025 1136).

* Deadweight can be defined as a project or activity which would have occurred anyway in the absence of intervention.