Official Report: Minutes of Evidence Report

The Chairperson (Mr McGrath): I welcome Councillor Brian Tierney, who is the mayor. We also have John Kelpie, who is the chief executive officer. Hopefully, we have both on the StarLeaf system. You are very welcome, gentlemen. Thank you very much for coming along to give us a presentation today and to discuss the issues that are impacting the Derry and Strabane area with Brexit just round the corner. If you want to take a few moments to detail to us some of the issues that you are facing, and then we will open it up to members for a few questions.

Councillor Brian Tierney (Derry City and Strabane District Council): Thank you very much. On behalf of Derry City and Strabane District Council, all our people across the council area and all our businesses, I will take this opportunity to thank you and the Committee members for inviting us along to this very important Brexit stakeholder event.

Derry City and Strabane District Council area has a resident population of around 150,000 and a wider reach in the north-west region of approximately 350,000, many of whom criss-cross the border daily to access employment, education, health and retail services. This long-standing history of social and economic connectivity in the cross-border north-west region is reflected in the present social fabric of both jurisdictions. The Derry City and Strabane District Council population poses the highest percentage of Republic of Ireland-born residents living in Northern Ireland, amounting to just under 7,000 people, which is about 5% of our population. Correspondingly, half of those who were born in Northern Ireland and are resident in the Republic of Ireland live in Donegal, which amounts to about 13,000 or 8% of the population of Donegal. Such connections are even more prevalent in the Donegal border settlements located about five kilometres outside of Derry, such as Killea, Bridgend, Muff and Burnfoot. Half of their present population were born in Derry, amounting to around 3,000 individuals who have strong family and other links to their birthplace. While lower house prices initially attracted those Derry City and Strabane District Council residents to move to Donegal, their relocation was further accelerated by the absence of any significant administrative barriers to living in Donegal and having the ability to commute quickly and unfettered to our council area to access employment.

The volume of people crossing the border varies across the three major border-crossing routes of Buncrana Road, Culmore and Strabane in the north-west, but the scale and magnitude of cross-border travel is evident, with Derry and Donegal traffic reaching 300,000 journeys per week in Donegal. Ninety-eight per cent of the border crossings are by commuters into Derry and/or Donegal. In fact, over 60% of all cross-border movements between Northern Ireland and the Republic of Ireland take place along those three routes in the Derry City and Strabane District Council area.

I will now turn to specific sectors. Research conducted as part of our preparations for Brexit showed that a quarter of those employed in health in the Derry City and Strabane District Council area were resident in the Republic of Ireland, with similar patterns of employment in local government and education. In order to understand the situation fully, it is worth noting that some firms in Donegal reported that almost 50% of their workforce are Northern Ireland residents, while many firms in the Derry City and Strabane District Council area have reported that a significant percentage of their staff live in Donegal. Although official figures for employment show that approximately 7% of staff are in export-orientated firms, anecdotal evidence suggests that that is vastly underestimated, with many firms providing trade services right across the border region, not least in the areas of construction and building maintenance, few of which appear in official data.

Chair, with your indulgence, at this point, I will hand over to our chief executive, John Kelpie, to take us through the next part.

Mr John Kelpie (Derry City and Strabane District Council): Thank you, mayor. Good afternoon, Chair and members. The economy of the Derry City and Strabane District Council area grew at a relatively low rate in 2019, by only around 0·3%, as did the population. Although there has been some employment growth, our rate is still amongst the lowest in Northern Ireland, with continuing high rates of economic inactivity and unemployment. As a remedy to our relatively poor economic performance and indicators, the council and its city and district partners developed and agreed, in 2017, a fully inclusive strategic growth plan. That is essentially our community plan, and it sets out an ambitious and comprehensive way forward for the region in terms of economic development, the environment and social and community well-being. Much progress has been made to date on the plan's objectives, but much more needs to be done. There needs to be much more focus on delivery of the big, key strategic economic projects in the plan, and that requires the collaboration and cooperation of both Governments in that cross-border region.

The Economic and Social Research Initiative's (ESRI) October estimates forecast that growth in the Republic of Ireland will fall by half in the event of a no-deal Brexit scenario. Given that half our city region is in the Republic of Ireland, you can see the potential consequence that that will have on the city and the economy. Although there has been a tremendous variation in the forecasts for Brexit's impact in Northern Ireland and the north-west in particular, there is still a consensus among most economists that, in the long run, it will depress economic activity on this side of the border, in the Derry City and Strabane District Council area, and that we will see fewer than 2,000 additional jobs created.

To date, the north-west has, like other council areas, benefited significantly from a range of EU Peace programmes, with investments over the decades, and all sorts of European social fund (ESF) programmes and European regional development fund (ERDF) programmes and capital projects to the tune of more than £80 million over a seven-year period from 2007 to 2013. Good business and other relationships between the Republic of Ireland and Northern Ireland are critical for both our economies and our societies to grow, if we leave the European Union, as, indeed, is the maintenance of extensive east-west trading and supply chain connections with Britain. Only by strengthening those east-west and North/South relationships can a border area such as ours reach its full potential and deliver on its strategic growth plan target.

The council's objective is to move away from being a low-growth economy. The objective of the wider north-west region is to be a solution-focused place, a place of growth and innovation and a platform for multi-jurisdictional cooperation and collaboration, enabling both parts of the city region to become net contributors to their respective economies.

Derry City and Strabane District Council welcomes the commitment by the UK, the EU and the ROI that guarantees unfettered access from Northern Ireland to ROI and GB markets and ensures minimum disruption to these very important commercial relationships, within whatever new dispensation arrives. I will hand back to you, mayor.

Councillor Tierney: Thank you, John. Chair, given how beneficial EU programmes have been in fostering economic growth and safeguarding peace, particularly in the most disadvantaged areas, such as the Derry City and Strabane District Council area, and in Donegal, it is critical that Northern Ireland will have continued access, through some agreed mechanism, to European support programmes, such as PEACE PLUS, ERASMUS and any substitutes for the ERDF, by either the UK Government or the EU. Additionally, existing and forthcoming challenges, such as those posed by climate change, require a coordinated response, particularly where the issues cross existing jurisdictional borders. Again, if we are to fully address the transition to green energy, it can be effectively achieved only from an all-island approach. We must, therefore, work collaboratively to ensure that mechanisms remain to guarantee continued joint working to maximise the benefits for all across these islands. To do all these things, we must ensure that our region is open for business, whenever that originates, and continues to be so after December 2020, at the end of the transition period, and that the EU structural and other funds continue to flow to more disadvantaged regions.

Importantly, improved levels of education and skills will be fundamental in addressing the challenges presented by a new, competitive Brexit market environment. For all of us in the north-west in pursuit of that objective, the north-west region plans sustainable expansion to our third-level provision, in line with the commitments by both Governments contained in the New Decade, New Approach agreement. Post-Brexit, the furtherance of the vision requires even closer cooperation, coordinated responses being fully integrated and co-working by all partners. The successful delivery of the graduate entry medical school at the Magee campus provides a demonstration of what can be achieved through close working. It is a useful template for further development, especially the delivery of the university expansion, as promised in the New Decade, New Approach agreement by both Governments.

It is only through the further development of our existing relationships on a North/South, east-west basis that the Derry City and Strabane District Council will be able to maximise the sustainable benefits occurring from our city deal and the inclusive future fund, creating 10,000 jobs and more than doubling our economic growth rate. It should be noted that Northern Ireland, the UK and the Republic of Ireland will all benefit from this investment in our futures, but key to its successful achievement is that we are promised unfettered access to markets within the withdrawal agreement and a willingness from all parties, particularly the UK and the EU, to put in place the measures that we have called for to mitigate the inevitable disruptive effect that our moving to a new chapter and new environment will generate.

In summary: to achieve sustainable growth and to prosper and to address and to meet existing and future challenges, the people and the businesses of our cross-border region in the north-west require unfettered access to GB, the Republic of Ireland and the wider EU; continued and further opportunities to develop our region through eligible participation in existing and emerging support programmes from the UK and the EU; and further multi-jurisdictional cooperation at national, regional and local levels to address the key strategic issues facing the north-west cross-border area in relation to third-level education and university provision, infrastructure, job creation, investment and climate change.

The Chairperson (Mr McGrath): Thank you very much for the presentation and for giving us a flavour of the issues that will be faced in the north-west. When the impact of Brexit became a reality, many of the eyes of Europe, if not the world, looked at the North and zoomed in on places like Derry and Newry as large settlements where half of the hinterland and areas surrounding them are in the two jurisdictions and, therefore, potentially subjected to two different sets of rules with all the tariffs, problems and paperwork that go alongside the exit process.

In your presentation, you mentioned the research that you had prepared and done, working with businesses. It is not so much the case that I am keen to determine the issues, because, over time, they have been articulated and are being pushed out, but I am keen to get a sense of whether you feel that the businesses within your area have been listened to, that their views, worries and concerns have been taken on board and that any of their concerns are being addressed? Is there a flow of communication from the British Government or, now, from the Stormont Government through the Executive, given that they have been in place for the past year? Do you feel that businesses within your area have been part of the process, or do you feel that they still face an uncertain future?

Mr Kelpie: Mayor, do you want me to take that one?

Councillor Tierney: Yes, if you wish.

Mr Kelpie: Thank you, Chair. The answer that you would get to that question would vary depending on which business you ask. This region is probably unique, in that many of our businesses have staff who straddle the border — the mayor gave statistics on that — and some of their products criss-cross the border while in production, and they are probably receiving advice from three sources: the Irish Government, the European Union and the UK Government or Northern Ireland Executive.

The queries that we mostly hear from our businesses relate to the fact that they have multiple sources of information, and, at times, those sources are not necessarily consistent, nor do they get the same information at the same time. There is a variable response to that. There is a unique requirement for businesses in the border area that a joined-up message comes forward from them and a responsibility that both Governments will work. The council is very willing to play its part. Indeed, Donegal County Council and Derry City and Strabane District Council work very closely together to aid in communicating that message to businesses. In response to your question, Chair, I say that that would certainly improve the situation dramatically.

The Chairperson (Mr McGrath): In the interests of time, I will jump straight to my other question. A number of councils have indicated to us the impact of funding through Peace moneys and other structural support programmes. Will you give us a flavour of the level of uncertainty within the employed sector, by which I mean the people who are employed as a result of those funding streams? Are they getting confirmation that the funding will continue into next year in various sectors and, therefore, that their jobs will continue? I am acutely aware that you mentioned £80 million over seven years: £11 million or £12 million per year is a big driver of funds, which is probably on top of the employment that quite a considerable number of people gain from that. Even within your council, you will have many officers who are funded by funding streams for the delivery of Peace programmes and other funding streams where the funding comes from Europe. Can you give us a sense of that funding and the employment sector that is below the European funding and what certainty there is for them?

Mr Kelpie: From my perspective — perhaps the mayor would like to come in on this, as well — I caught the tail end of the discussion with Mid Ulster District Council, and we are in a similar position. That funding is probably heavily split and heavily leaning towards project funding but also includes programme funding. From both perspectives, there is a significant issue with regards to employment and opportunity. We have no guarantee, at this stage, that that funding will continue, other than the broad statements by the UK Government that alternative funding arrangements will be in place. At this stage, we have no detail on that, and we are particularly concerned, as a council, that, with many of the current commitments, there might be an expectation that the council somehow may be able to provide for them, which, of course, given the challenges in councils at the moment, is an impossible ask. It is a very uncertain position at the minute with programme funding and major project funding, which clearly also has a huge impact on jobs and employment.

The Chairperson (Mr McGrath): Given that there are just a number of weeks until 1 January and given that many of these projects and, indeed, public-sector organisations employ through these various streams, are we at protected notice stage yet for those employees or is it just a case of hoping that some form of funding will be in place come 1 January?

Mr Kelpie: Chair, we are certainly into that territory. Many of these organisations will be well experienced in dealing with the vagaries of funding not being confirmed until the last minute and will have issues on an annual or three-yearly basis with that. To some extent, the current issues with COVID have maybe taken the attention away from the medium-term issues because people are so focused on dealing with the short term. I certainly think that, once we pass through Christmas and reach January, the realism of all this will dawn and there will be significant issues associated with it. Mayor, do you want to add to that?

Councillor Tierney: Thanks, John. I think that you are right. From my perspective, Chair, I will tie your three questions together and give you a joint response. It is my belief that there is not enough information coming out from any of the Governments on how we are supposed to move forward, and you have pointed out that we are eight weeks away from the end of the transition period. As John pointed out, a lot of our people are focused on battling COVID — we fully appreciate that the Governments are also focused on that — but we have another potential crisis coming down the line in that we do not know whether a substantial amount of funding will be in place come the new year and, if it is, where it is coming from. It is key for the Governments to get that information out as quickly as possible, because, at the end of the day, this involves people's jobs and they are wandering into the Christmas period not knowing whether they will be in position come the new year.

The Chairperson (Mr McGrath): Thank you for those answers. I will now pass over to Martina, who is on StarLeaf. I am sure, given that she is from the area, that she will have some questions. Go ahead, Martina.

Ms Anderson: Thank you, mayor and chief executive. I know personally the kind of work and research that Derry and Donegal have done, and I know about the kind of lobbying and influence that was had in Europe before we were kicked out of the EU. I listened to you talk about the percentage of people who live across the north-west not recognising the border that partitions Ireland. When you consider the fact that the cancer services in Altnagelvin hospital came about because of the critical mass of the north-west, we may need to start to give attention to that, given that the talk is, at times, particularly as the days go by, that there could be a crash-out in relation to the future relationship. The import of the radioisotopes, which are used particularly for diagnosis and treatment of cancer patients in Altnagelvin hospital, will be dependent on the kind of future relationship that we have, and we know that the British Government may find it harder to guarantee a supply chain after leaving the EU. Given the concerns that we have in Derry, have you had any engagements with, for instance, the BMA and others? I know that they have expressed concerns about that matter.

Chair, you talked about the level of funding and quoted the £80 million over that EU tranche. We also have the Peace Bridge and the Science Park. They are big statements that we were able to secure European funding for, and that will be lost. Projects like that, which have been able to avail themselves of European funding, are scattered all over Derry.

I have a question for the mayor, because I think that Brian will probably know about this. The British Government are leading the negotiations. They go into the tunnel and the engagements with the EU. All of us are desperately trying to get some kind of clarity, and the clock is ticking. In the preparation work that Derry and Strabane has already done, and the connectivity between you, what kind of engagement is taking place with the Irish Government around the €500 shared island fund? I ask that because that is going to be important for areas like Derry and Donegal, and that is not just for projects but for people and supply chains. We need to be giving a bit of attention to the issue of radioisotopes and its implications for all hospitals, although we are obviously quite concerned for the hospital in Derry.

Mr Kelpie: Brian, would you like me to open or would you like to?

Councillor Tierney: Go ahead, John.

Mr Kelpie: OK, thank you. Thank you for your question and comments, Martina. I think that you have hit the nail on the head with regard to the big strategic issues that face the north-west. We have a model for how initiatives have been successfully delivered previously. Unfortunately, we also have another model, and there are many examples of where there has not been that success. This issue exists in every border city in every country in the world, if not Europe. You must look at the functional economic area of that city and district, and the functional economic area of this city and district is an area that comprises, as the mayor said, a population of between 350,000 and 400,000 people, half of whom live in one jurisdiction and half in the other.

If we look at how, traditionally, we implement big strategic initiatives on a one-jurisdictional basis, we see that that will not lead to success. The cancer unit is a prime example of when we looked at the totality of a functional economic area and both Governments collaborated, and it was to the benefit of the totality of the citizens in both areas. The shared island unit provides an opportunity for this area and others to continue that work and to work as a joined-up, multi-jurisdictional, functional economic area in trying to progress some of the big, key strategic projects. In the north-west, we are certainly trying to do that through the north-west partnerships that have been delivered under the auspices of the North/South Ministerial Council. We have made recent representations to the shared island unit, and, indeed, we had an introductory meeting with the shared island unit's officials just last week. Obviously, it is at its early stages of development, but we have certainly laid out the key priorities for the area to them, and we have asked them to consider the engagement with the north-west as we go forward.

Mayor, would you like to pick up on any of those points?

Councillor Tierney: Yes, thank you, John. Thank you, Martina, for your question. First, I know people — I am pretty sure that you will, as well, Martina — who live in Killea, Bridgend and Muff, and those people do not say that they are from Killea, Bridgend and Muff; they are from Derry. For an awful lot of them, it is a mindset that never changes. Those villages are literally five minutes away from our main city centre, and people genuinely believe that they are Derry people, and they genuinely are.

I have already pointed out the reasons — Martina, you will know them as well as I do — why those people moved to those areas: cheaper house prices, unfettered access and straight back into Derry and the Letterkenny Road. You are probably in the city centre more quickly than from where I am in Galliagh. You will know that that is not an exaggeration.

In relation to our cross-border partnerships, again, Martina, you will be aware of our work with Donegal County Council in trying to make sure that we can get the appropriate messaging out on the COVID restrictions. I am sure that, as an elected representative in the north-west, you, like me, were contacted by numerous people who live in Donegal and work in Derry or vice versa, and were confused at a point during the pandemic because restrictions on either side of the border were completely different, and that was difficult for them. The mayor of Donegal County Council and I worked together to put out a joint video quickly. I do not see any reason that Derry City and Strabane District Council and Donegal County Council should not continue with those working relationships and further enhance any funding that becomes available — the Future Fund, for example. Those engagements should and will continue to make sure that we build all our capital programmes.

Take, for example, the A2 Buncrana Road, of which you will be aware. What is the point of building the A2 from Fort George to the border at Bridgend if it is not continued on out towards Letterkenny? It will, effectively, be a road to nowhere if it were to go back into a single-lane carriageway from the border.

I had the privilege — you were at the meeting — of welcoming the EU ambassador on his first visit to Derry and Strabane to look around, and walking him around our city's walls, pointing out the key pieces of infrastructure — you, rightly, have pointed those out — such as the Peace Bridge, and the Museum of Free Derry, which was partly funded by European money. Those and other key projects have made a significant change not only to the view of our city but to the mindset of our people. That is critical. While it is a key point that we need European and UK money, we also need that money to build our people and change our mindset. In the interests of reconciliation, it is extremely important that those moneys flow to more disadvantaged areas such as Derry and Donegal so that our people can benefit.

Ms Anderson: Chair, because you are taking a note of this and we are doing a report, as the city that had one of the largest responses to rejecting leaving the EU, with 78% of the people here wanting to remain, we need to start planning and preparing for an opportunity, if people want it, to return to the EU. The long-term planning and preparation for that needs to form part of an option that is put into the report in relation to councils. I am not at all saying that it has come from the council, but, as someone who is from the area where 78% of the people voted to remain in the EU, they would certainly want to stay in the EU and at least be given the choice if that opportunity can be taken forward, and it should.

Thank you both for the presentation.

The Chairperson (Mr McGrath): Yes, indeed, Martina, and good old South Down was not far behind you, I am glad to say, in those figures. We were very close in that one.

Gentlemen, thank you very much for your contributions. It really is an issue in areas such as Derry and Newry where there is such a massive population and a massive focus. We could probably take an entire afternoon to discuss the ramifications with you. We appreciate getting a flavour of the difficulties and the issues that we have to face in the months ahead. We will certainly include your comments in our report, which we will forward to the Executive and the Government. Thank you very much for taking the time to join us.