The House of Commons Northern Ireland Affairs Committee has published a report into investment in Northern Ireland – following on from its inquiry earlier this year on the same topic – with a significant focus on education and skills, as well as research and development spending.

The headline complaint of the committee concerns the nation’s student number cap, which limits student places in both major universities and is set by the Department for the Economy based on a financial calculation – this cap, we are told, “places a handbrake on the Northern Ireland economy”.

No going back

The committee drew on evidence from Pivotal Public Policy Forum’s report into young people’s reasons for leaving Northern Ireland, which found that higher education is the most common exit point for those living and working outside Northern Ireland. In all, 88 per cent of the student participants in the study – based admittedly on 316 survey responses, and not nationally representative – had no plans to return to Northern Ireland after completing their studies.

One of the reasons cited in this research – among many, including community divisions and lack of work opportunities – was difficulty in finding a university place. This is not only about numbers, but also around the “comparatively narrow range of university courses” available.

A full review of Northern Ireland higher education funding was announced last month, but economy minister Gordon Lyons has already suggested that lifting the cap will require substantial additional funding. Both tuition fees and student maintenance are currently substantially below other UK nations, despite the recent uplift, meaning that expansion in numbers is expensive.

The committee recommends that the cap be lifted:

We urge the Government to explore with the Executive, including through the NI Department for Economy’s review of higher education funding, how the cap on university numbers might be raised to enable the retention of home-grown talent in Northern Ireland and an expansion of the high-skilled sectors of its economy.

Consequential

The report also labels Northern Ireland’s apprenticeship system as problematic:

This is because money from employers in the form of the apprenticeship levy goes to the Treasury, which is then given back to the Executive in Barnett consequentials and is not ringfenced for apprenticeships and training. Therefore, it might not be used for apprenticeship schemes, and, according to businesses, might even be returned to central government at the end of the financial year. This does not happen in other UK nations.

The Northern Ireland fiscal commission has already recommended the devolution of the apprenticeship levy to Northern Ireland, and the committee concurs with the sentiments:

The government must work with the executive to ensure that the money which businesses contribute to the apprenticeship levy is ringfenced, so it is used for its intended purpose.

Elsewhere the committee notes the concerns around the UK Shared Prosperity Fund (UKSPF), echoing concerns in wider UK that there will be gaps (or a “cliff edge”, as UUK put it recently) in funding between the winding down of European Union funding for local skills and training partnerships and the roll-out of the UK alternative. For Northern Ireland, there is an additional complication, which the committee highlighted last year:

To date there has been no meaningful role for the NI Executive and relevant policy departments in the UKSPF and other similar funding programmes. This has led to significant risk of duplication of funding and activity as well as a high likelihood that gaps will emerge.

Stormont gridlock

It should be apparent that many of the recommendations in the report call for a greater role or greater powers for the Northern Ireland executive.

While gridlock remains in Stormont, and with more elections on the horizon, this is easier said than done. The report notes that the “lack of a functioning Executive since February 2022 has affected public investment decisions”, as well as business confidence and the desirability of Northern Ireland as a place where graduates will look to work.