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08/08/2017

Deal of the week – or is it?

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Conservative Party and DUP logos

Never has a party from Northern Ireland played such an important role in the establishment of a UK Government.

For the first time, 10 of its 18 MPs became kingmakers, and the DUP used their strong hand to negotiate an additional £1 billion in funding for the region. The deal has, however, appeared to hamper talks to establish an Executive at Stormont.

Sinn Fein, Northern Ireland’s second-largest party, has argued that the deal between the DUP and Conservatives brings the impartiality of the UK Government into question. With no prospect of an Assembly in place and no ministers to make decisions, how will NI capitalise on the opportunity?

£400 million has been earmarked for infrastructure projects over the two-year period of the deal. The sum is significant, but not transformative. The economy creaks along on an ageing infrastructure – a region of the UK where there is one primary rail line and about 60 miles of motorway. 

"The sum is significant, but not transformative"

Four priority projects set by the previous NI Executive will almost certainly benefit, namely A6 dualling, A5 dualling, Belfast Transport Hub and Belfast Rapid Transport. These projects address the physical and social disconnect between Belfast and Derry-Londonderry, improve cross-border connections to the South, and seek to address Belfast’s notorious congestion. The cost estimated for these four priority projects alone eclipses this new funding.

But there are other key infrastructure ambitions including a high-speed railway from Belfast to Dublin, Derry-Londonderry Transport Hub and the York Street Interchange – the current bottleneck in what would otherwise be 300 miles of non-stop dual carriageway. All ambitions that would assist in our resilience to the economic uncertainty that Brexit may bring.

However, this investment represents a tiny slice of the 30-year-plus infrastructure deficit. There is also perhaps a larger challenge. Without an NI Executive in place to deliver these programmes, normal Treasury rules could make it difficult to spend the money in the two-year period of the deal. 

Few infrastructure projects are shovel-ready. Many require planning consent or face legal challenges, like the A5 – caught up in judicial review proceedings. The monies could then benefit improvements across existing secondary roads, for which there is little or no budget. 

This money will only go part of the way to delivering basic infrastructure. It is a two-year booster shot during which Northern Ireland will need to prepare for the challenges and opportunities of Brexit may bring the only area of the UK that will have a land border with the EU.

Emma Walker is associate director with Turley

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