The damning indictment of the IDB
£61 million Hualon debacle revisited
BY ROBBIE MacGABHANN
It is barely three weeks since the Six-County Industrial Development Board (IDB) was heralding its record year of job creation and lowest ever cost per job. Sinn Féin's Upper Bann Assembly member Dara O'Hagan was a lone voice casting cold water on the IDB hype. Now, however, the party's long-term concerns and worst fears about the operations of the IDB have been borne out in a damning report from the Westminster Public Accounts Committee.
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How did the IDB actually measured the effectiveness of their work attracting transnational companies to the Six Counties if they could not answer the simple question of how many jobs were created over a given time period and how long did those jobs last?
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Sinn Féin's concerns over the years have centred on the accountability of the IDB. Who was there to see they were providing value for money? Many nationalists believed that tens of millions of pounds were being squandered.
Perhaps even more important was the belief that there was no real attempt being made to bring employment to nationalist areas. Many economically marginalised unionist communities also felt the cold wind of IDB indifference to their plight.
Hualon Scandal
example of an IDB project that combined both these elements was the £61 million offered to an investment by Hualon, a Taiwanese textile company that was being brought to a unionist area in Antrim. The Dublin Government and the Industrial Development Authority in the 26 Counties had stepped back from investing in Hualon.
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The IDB were not measuring how many people from disadvantaged areas were actually getting jobs
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Maybe former Progressive Democrat minister for Industry and Commerce Dessie O'Malley guessed there was something wrong when on a visit to the company he found that the Hualon president was under house arrest. That, though, didn't deter the IDB from offering £61 million to land their big fish.
The Westminster Committee of Public Accounts found that the ``IDB failed to justify their justify their offer of public funds assistance''. They found it ``extremely disturbing'' that ``important aspects of IDB's appraisal were not given sufficient weight in their decision to offer £61 million assistance to the project''. One director of the IDB had felt that the project was seriously flawed. However, his concerns were ignored as the rush to create jobs at any cost for the local unionist community was the real agenda at work.
The Committee was ``surprised that IDB persisted so long with the project, given that serious failings had come to light. They were also ``most dissatisfied with the provision by IDB of misleading information on the write-off costs of the Hualon project''. This means that the IDB have still not come clean on how much money was lost on the Hualon project that never got off the ground.
Many republicans feel that if the Hualon project had been earmarked for a nationalist area, an entirely different set of criteria would have been used to assess the project. In fact, over the last three decades, the chances of the IDB offering to invest £61 million in any nationalist area were at best remote.
Promises Broken
The IDB's excesses were no isolated incidents. In another case, the Accounts Committee found it ``alarming'' that the IDB ``decided to make a £57 million expansion offer'' to another company when ``the marketing appraisal had concluded there was insufficient confirmed business to even satisfy the basis for viability and at a time when the initial project was performing far below expectations''. This means that the IDB were prepared to squander £57 million in a company when there clearly was no market for their business at a such a scale.
The Committee also found that the IDB had not used their ability to claw back money from companies who failed to achieve their job targets. Assurances given to the Committee in 1993 by the IDB had not been implemented.
Other failures found by the Committee are highlighted beside this article.
As well as this, the IDB were found to not have developed any method of assessing the cost effectiveness of their overseas offices. The report stated: ``We also found it surprising that, although the IDB claimed to know the performance of each of their overseas offices, they had not maintained a formal record of this.''
The IDB only examined the levels of job creation and job duration for inward investment when asked to by the Accounts Committee. They never actually felt the need to know this crucial information. It begs the question as to how did the IDB actually measure the effectiveness of their work to attract transnational companies to the Six Counties if they could not answer the simple question of how many jobs were created over a given time period and how long did those jobs last.
Even when the IDB was pressed on the issue of inward investment, the Committee found that they persisted in giving figures that covered all the jobs supported by the IDB, not the inward investment figures.
Disadvantaged Areas
In terms of how much inward investment is coming to disadvantaged areas, the Committee found that the IDB were not actually measuring how many people from disadvantaged areas were actually getting jobs in these companies.
The IDBs use of ``jobs promoted'' figures also came in for criticism. The IDB's end of year statement this year tells us that ``of the 13 new inward investment projects, 7, involving 1,932 jobs (76%), are located in or beside disadvantaged areas''. When you apply the findings of the Accounts Committee, you can only conclude that not one piece of the IDB figures is actually
believable.
The IDB has been formally committed to invest in the most disadvantaged areas of the Six Counties. There were 11 designated areas of high unemployment and low economic development. The IDB says that in the nine years to March 1997, 38% of their projects, 41% of jobs promoted and 45% of total planned investment was located in disadvantaged areas. Seven of the 11 areas had no investment including the Moyle and Strabane areas. The IDB were unable to tell the Committee how many jobs actually went to people from disadvantaged areas, despite nine years of running projects targeted at these disadvantaged communities.
Discrimination
The Committee also found that even though Belfast had 23.4% of the North's unemployed, only 12% of jobs promoted were located in this area. Unemployment in nationalist areas of Belfast can run up to four times higher than unionist unemployment.
So where were the IDB projects going? The Committee found that 61% of the jobs promoted went to Derry, Lisburn, Limavady and Antrim Council areas which, with a combined figure of 17.9% of total unemployment, accounted for 61% of jobs promoted.
The Committee also noted: ``We are surprised that IDB does not include all relevant expenditure in their cost per job statistics.''
This all adds up to an agency that is out of control. It will be a real test of the new Assembly to reign in the IDB and bring democratic accountability to this agency. If the IDB were a football club, the message from the terraces would be simply ``Sack the Board! Sack the Board! Sack the Board!''.
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IDB's record of shame
Misled committee on £61 million Hualon investment
Failed to keep promises made in 1993 for reviewing failed projects
£397 million offered between 1988 and 1997 for 15,200 jobs, at a cost of £23,100 per job, according to the IDB
other £80 million was spent promoting the Six Counties as a business location
Actual cost per job was £38,700
A substantial proportion of jobs promised were never created. Many jobs created were not for the long-term
Only 36% of jobs promised actually materialised
The IDB's evidence was contradictory and confusing
No figures for jobs created by transnational companies
No evidence jobs are going to people from disadvantaged areas
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