12
Rejected
Tackling economic inactivity is one of the keys to economic growth.
Conclusion
Tackling economic inactivity is one of the keys to economic growth. In Northern Ireland, this has been carried out largely by the community and voluntary sector using revenue funding. Under the forthcoming Local Growth Fund, the proportion of revenue funding will be severely curtailed due to a new 70–30 capital-revenue split. In our correspondence with the Government and in oral evidence from the NIO, we have not been given a justifiable reason for this new arrangement. We are concerned about the knock-on effect this will have on NI’s justice, social services and health systems. We are frustrated by the Government’s lack of movement on this issue, and believe the NIO has a duty to advocate better for organisations delivering economic activity programmes in NI. We are disappointed at the way the sector has been treated and the position in which organisations and recipients have been placed. This makes us question the effectiveness of the NIO in voicing the concerns of Northern Ireland in Whitehall. (Conclusion, Paragraph 72)
Government Response Summary
The government acknowledges concerns about the 70-30 capital-revenue split for the Local Growth Fund but defends it as a new fund focused on long-term capital investment for economic growth. It refutes criticism of the NIO's effectiveness and highlights ongoing consultation.
Government Response
Rejected
Government Response
Rejected
HM Government
Rejected
I acknowledge the concerns set out in the Committee’s conclusion and the challenges the funding split for the Local Growth Fund has raised for stakeholders in Northern Ireland. However, it is important to recognise that MHCLG has established a distinct, new fund focused on our priority to ensure long-term investment to support economic growth. Whilst the split does reflect a more capital-focused fund, we recognised resource funding was important, which is why we have ensured resource funding is part of the funding split. I do not share the Committee’s conclusion on the effectiveness of the NIO in being the voice for Northern Ireland in Whitehall – this is at the heart of what we do. In this case, given our understanding the unique circumstances of Northern Ireland, the NIO had an instrumental role in providing mitigations to Northern Ireland that go beyond those available in Scotland and Wales. This included ensuring enhanced flexibility to use Pride in Place Programme funding for the Local Growth Fund, which has added over £11 million in additional resource funding between 2026–29, which without our role would not have been available. I met with the Special EU Programmes Body (SEUPB) on the 5th March together with representatives of the voluntary and community sector and I understand some organisations have subsequently made applications to the PEACEPLUS Change Maker Funding Programme and the Investment Area 1.2 (Empowering Communities) to attempt to access alternative streams of funding. This new fund is an opportunity to work in partnership with the NI Executive and stakeholders to change the way we invest in growth in Northern Ireland. We launched the public consultation for the Local Growth Fund on 8 May, and have had a series of engagement sessions with several sectors, including the community and voluntary sector, to provide an opportunity for stakeholders to provide their responses to how the fund should be designed to best support each sector to promote economic growth. So far these sessions have provided ideas about how capital funding can indeed support the community and voluntary sector, as well as the priorities for businesses and councils.
Source
Committee
Northern Ireland Affairs Committee
Report
4th Report – Economic growth in Northern Ireland: new and emerging sectors
23 Mar 2026
HC 1193
Addressee Bodies
Northern Ireland Executive
Northern Ireland Office
Timeline
Recommendation age
0.4 yrs
Report published
23 Mar 2026