Northern Ireland Office

Secretary of State, Peter Hain MP, has said that violence and rioting must be left behind if we are to create a strong and prosperous Northern Ireland. He made the comments during a keynote speech in Belfast today where he set out his agenda for political progress and reform of the public sector.

He said: “Be under no illusions: the recent riots and violence, as well as wasting public money, have shaken an international confidence that was viewing Northern Ireland with increasing optimism.  I accept that there are unionists who are deeply suspicious. Even after a statement from the IRA that is unusually clear, they wonder whether it will be carried through in action or whether hopes will be dashed once again. I also want to see the IRA deliver on its promises.  

“But today’s five-year-olds, who will be completing their education after 2020, deserve to enter a thriving job market and need to be equipped with the skills that will be demanded in that dynamic economy. It will be no consolation to say to them in 15 years’ time that Government was too preoccupied with past or present political disputes to plan ahead for their economic security and social future.

“Unless we can address these problems we will not be in a position to face that future with the purpose and drive required. So the Government cannot simply ‘mind the shop’ awaiting restoration of devolution, but must take the necessary decisions, however difficult and controversial.”

He also set out the government’s approach to public service reform including rating reform, the introduction of water charges and the implementation of the Review of Public Administration.  

On the need for investment and reform, he said:“We need a far more rigorous re-direction of public spending on innovation rather than protection; in skills and education, rather than subsidising economic inactivity; and in infrastructure rather than public sector bureaucracy. We need more investment in education, skills and child care, to ensure we equip our workforce to compete with the best in the world.  

We need more investment in health and social care, not only for a decent quality of life – but also to cut the costs associated with ill health and ensure no-one is excluded from the opportunity to work.  And more investment in infrastructure – not just our schools and hospitals, but in our transport, energy, water and communications sectors.

”But as well as investment, we must reform – and in some cases that means radical reform - to ensure we have the education and health services fit for the 21st century and making the very best value for money use of public spending.”

On water and rating reform, he said: “But making Northern Ireland a genuinely world class place requires not just more public investment but more public service reform, including engaging with the private sector and a ruthless reduction in bureaucracy, duplication and waste. We must also tackle the hugely wasteful costs of division in this society.

“Although Northern Ireland already has the highest level of per capita public spending of any economic region in the UK, conversely, on locally raised revenue, we are well behind the rest of the UK. Average local household contributions (including water charges) to pay for services in England and Wales this year will be £1275; in Scotland £1205; yet in Northern Ireland only £546. This is simply not sustainable.

“If we want Northern Ireland to be world class, have world class public services – or indeed have even comparable services to England, Scotland and Wales – locally raised contributions must increase.   This means increasing rates and introducing water charges from April 2007. But it must be done fairly, and it will be – with protection for those on low incomes.   We will require households to pay no more, but no less, than is absolutely vital for the services that they use – in line with households in England, Scotland and Wales.”  

On the RPA, he said: “And the conclusions of the Review of Public Administration will take forward the most radical, cost saving changes in structures for local authorities, health and education and other areas of government, including options for reducing quangos. This is not just about better use of tax-payers’ money, but about good governance and effective delivery. By any standards Northern Ireland is over administered. For a population of just over 1.7 million we have 26 Councils, 4 Health Boards, 19 Health Trusts, 5 Education and Library Boards and about 100 other public bodies – far higher than elsewhere in the UK for a population of Northern Ireland’s size.

“There is a real choice for the politicians and people of Northern Ireland here. These reforms will be ambitious. They will challenge the status quo. They will disrupt power bases and vested interests. They will lead to a radical shift of resources from the back room to the frontline. But they are all essential to enabling Northern Ireland to be world class and compete on the world stage and we must complete this programme of reform by 2009. In judging these proposals I urge everyone to put, not their own organisational or institutional self interest, but the interests of Northern Ireland first.”

In conclusion, he said: “Northern Ireland is a great place, with great and talented people.  It can be greater still – a great place to visit, a great place to invest in, a great place to do business in, and with great public services. I intend to take the tough decisions, with reform and investment going hand in hand, to equip Northern Ireland for that great and shared future.”

Full text of Speech