The Department for the Economy consults sector on Brexit concerns

16 Oct 2017 Carys Brown    Last updated: 16 Oct 2017

On 10 October a contingent from the DfE met with sector representatives to discuss Brexit’s implications for the Voluntary and Community Sector and the issues it works on in an economic context. 

NICVA hosted the session as part of a continuing effort to encourage dialogue between the government departments and the sector in relation to the ongoing Brexit negotiations and its future implications. 

An outline of the Department for the Economy’s workings on Brexit:

  • The DfE highlighted that Brexit occupies a priority position on their agenda.
  • The decisions reached in negotiations were clearly identified as being of vital importance to the health of our economy in Northern Ireland.
  • The DfE set out the framework which has been put in place to handle Brexit. The DfE acknowledged the complexity of this framework comprising multiple actors, structures and ‘moving parts.’ However, the DfE believes the framework in place is no more complex than the situation demands.  
  • The DfE has been commissioned by the NI Civil Service’s EU Future Relations Project Board to take particular leadership in the areas of market access/border, migration (alongside DAERA) and energy. However, primarily the DfE fits into the framework at interdepartmental level. 
  • The DfE has been proactive in its response to Brexit and as such it has established its own departmental EU Exit Project Board which encompasses various workstreams within its departmental remit, including market access/border, migration/access to skills, energy, legislation, domestic consquentials/common frameworks (including State Aid).
  • The DfE stressed preparation as key. As such, the Department sought to emphasise the energy being allocated to its day one scenario planning workstream which will aim to deliver stability in NI whatever the deal struck from the start. 
  • The DfE also highlighted its extensive engagement with Whitehall departments (in particular with DEXEU, the Home Office & DBEIS), and that lines of communication remain active at a civil service level in the absence of political representation in NI. 
  • The DfE also tackled the topic of legislation. The European Union (Withdrawal) Bill was given specific attention due to its potential consequences for Northern Ireland.  For example - Will the transfer of EU legislation result in the subsequent transfer of more devolved powers post Brexit?
  • Regarding data and research, due to the speed at which Brexit has entered the political scene, having not previously been an agreed government policy, there has been a rapid demand for relevant data which is not always readily available, there having been no real history of data collection on many of the issues Brexit has thrown up. 
  • The DfE highlighted their programme of research and analysis, headed up by Shane Murphy, which is seeking to address this need. The programme is both collecting new data and drawing on reserves that the DfE does have access to, but from new angles. 
  • Trade, migration and the Common Travel Area were identified as areas of focus for this work.
  • Notably, the DfE observed the timescale which accompanies Brexit and the ensuing pressures for all those involved in the process. 

Circulating sector concerns:

  • Sector representatives recognised the breadth of issues to be resolved in relation to Brexit. However, in the same breath voiced fear that VCSE concerns are being or will be lost amongst competing priorities.
  • Concern for a continuity of approach to Brexit in an atmosphere of change and political turbulence.
  • Lack of political direction and representation in NI surfaced as a major concern. Whilst the role of the DfE and the wider NICS was recognised as vital, the apolitical nature of the civil service doesn’t allow for the articulation of policy direction. The sector voiced concern about what the lack of political leadership will mean for NI’s economic future in the face of Brexit. 
  • With the potential for an increase in devolved competencies, sector representatives questioned Stormont’s capacity, if and when it resumes, to handle a potential increase in the remit of devolved powers.
  • Crucially, funding insecurity as follows – 
  1. Source: What will replace funds such as Horizon 2020, ESF or EU structural funds in the case of a Hard Brexit? Will the UK economy, or specifically the NI economy, be able to compensate? Will there be an increase in the NI subvention, if so will this translate into accessible funding for the sector?
  2. Allocation: Over and above concerns for funding sources is the issue of funding allocation. Arguably allocation and direction of funding emerged as a greater concern within the sector. Will there be a shift in focus? How will Westminster’s priorities differ from the EU?
  3. Longevity: Representatives raised concerns about long-term financial planning and where the sector will fit into plans. The desire for assurances beyond a smooth transition or day one stability was noted.
  • The potential trickle down effect of Brexit on the already socially disadvantaged in society was voiced as an area of concern. 
  • Likewise, concerns for children and young people were raised. The potential for increasing child poverty rates post Brexit due to a slump in the economy was identified as an example. As was the impact on education opportunities due to potential disintegration of academic partnerships or funding dissolution.
  • Sector representatives were eager to stress that the sector’s concerns constitute more than border worries. There was concern for the threat Brexit poses to the Common Travel Area and the implications which flow from this, which have not diminished. – cross border student mobility was offered as an example.  

Fundamental sector recommendations:

Engagement and Communication 

  • Sector representatives were keen for the DfE to engage with stakeholders on a more regular basis, whether in the form of more roundtable events, mailing lists, online discussion forums or questionnaires. Representatives placed emphasis on the importance of both talking and listening.
  • The volume of work still in hand regarding Brexit was noted universally as expansive. Representatives expressed a desire for the DfE to tap into the sector’s range of expertise more often in order to tackle the task ahead.

Creative solutions

  • Sector representatives were eager to have a role in co-designing Brexit solutions. 
  • As such, sector representatives articulated their wish to see a visible, workable and innovative economic strategy to deal with Brexit repercussions for people from different social strata, age cohorts and so on; children, students and the socially disadvantaged. 

Funding Queries

  • Sector representatives urged the DfE to put pressure on the OBR (The UK Office for Budget Responsibility) to complete an objective forecast for Brexit funding implications in NI. 
  • Representatives require more information surrounding government commitments to ‘match funding’ in order to plan ahead.
  • An appetite for close consultation with the sector regarding funding allocations came through particularly strongly.
  • Question marks over the impact of Brexit on NI’s subvention should be put to Government in Westminster. The current political context should be accounted for in any such response.

Legislative change

  • The volume of legislation due to be translated from EU acquis to domestic legislation under the European Union (Withdrawal) Bill is immense. NI’s ability to keep up with such rapid and fluid change requires attention.
  • Sector representatives suggested outsourcing scrutiny by means of more consultation with specialists in respective policy areas as a way forward.  
  • Emphasis was placed on the NI specific potential opportunities and dangers which accompany such a large legislative transition.  Sector representatives broached the possibility of legislative consent motions as a last resort in order to cope with the upheaval Brexit may pose.

Political Progress

  • Sector representatives strongly urged movement in the direction of cross party agreement and restoration of a functioning Assembly in NI.
  • In such an event, sector representatives recommended serious engagement between the new Executive and the DfE in order to meaningfully inform NI policy position and economic decision making in response to Brexit.