New Year, New Opportunities

Restoration of devolved government

The New Year brought welcome news that agreement had been reached on the restoration of devolved government in Northern Ireland. The deal, entitled New Decade, New Approach contains a number of commitments to strengthen Northern Ireland’s economy including enhanced assistance from business-supporting UK Government departments. The Irish Government will be providing a separate financial package. After the prolonged stalemate over the last three years, it is vital that the Executive now gets down to business quickly at this critical time for our economy.

Brexit

The UK’s withdrawal from the EU will take place at 11 pm on Friday, 31 January 2020. A transition period then kicks in. Currently this is scheduled to last until the end of the year and is likely to be dominated by negotiations about the future relationship. It is important to be aware that if no agreement is reached in the negotiations, there is still a risk of leaving without a free trade deal at the end of the year. Depending on what happens in the next few months, potentially the transition period could be extended although Prime Minister Johnson  has ruled this out. The UK and EU have until 1 July 2020 to agree on an extension — either by one year to 31 December 2021 or by two years to 31 December 2022.

Priorities for businesses

After the uncertainty of the last few years, the recent developments are welcome. However, much remains to be resolved and businesses are rightly concerned about the as yet unknown practicalities that will impact day-to-day operations including the potential costs and paperwork involved in moving goods across the Irish Sea.

While it is undoubtedly true that there will be challenges for many businesses over the coming months, there will also be new opportunities. Already, many FPM clients are reporting that quantifying the potential impacts and demonstrating that plans are in place to mitigate them is helping with customer retention. Clients also say that they are winning new business from organisations seeking to onshore supply chains. Looking ahead, we can anticipate opportunities for Northern Ireland as an investment location however it will be important that we continue to invest in education at all levels to make sure we have the people and skills that overseas investors are looking for.

In the meantime, it continues to be important that businesses focus on building financial strength by controlling costs, enhancing working capital and paying attention to their return on investment, cash flow, return on capital employed and financial results. Tax, supply chain, regulatory and legal issues also need to be kept under review. In addition, it will be important that people, processes and systems are able to react effectively and swiftly to disruption. These are things to keep in mind when setting and monitoring individual and team goals for the coming year.

With much to be played for in the coming months, businesses will need to continue to monitor developments closely, taking full advantage of all available supports, advice and funding to mitigate the impact of Brexit on their operations and trade. For up to date information on the latest developments and available supports, contact our FPM Brexit Centre of Excellence.