Northern Ireland builds a Potemkin village to look good for the G8

A teachable moment in austerity.

Northern Ireland is in a tricky situation. It's hosting the G8 summit in the luxury Lough Erne resort in three weeks time, in the midst of an economic slump which has rendered much of the nearby community of Fermanagh a ghost town. That's not the sort of thing which any nation wants to deal with; it's embarrassing enough when the neighbours pop over and you've forgotten to do the hoovering, let alone when you don't have a fully functioning economy in your rural outskirts. And while George Osborne isn't exactly hiding the fact that the UK is in dire economic straits, the chancellor still wants to put on a brave face in front of Vladimir Putin. So what do you do? Build a potemkin village, of course! The Irish Times reports:

Just a few weeks ago, Flanagan’s – a former butcher’s and vegetable shop in the neat village – was cleaned and repainted with bespoke images of a thriving business placed in the windows. Any G8 delegate passing on the way to discuss global capitalism would easily be fooled into thinking that all is well with the free-market system in Fermanagh. But, the facts are different…

The butcher’s business has been replaced by a picture of a butcher’s business. Across the road is a similar tale. A small business premises has been made to look like an office supplies store. It used to be a pharmacy, now relocated on the village main street.

Hopefully, the Chancellor does, in fact, know that the economy in rural Northern Ireland is suffering somewhat. It's his job, after all. So the Potemkin village is just for the sake of appearances in front of the neighbours. Still, while he's out there, he could learn a thing or two from the Northern Irish Departments for the Environment and Social Development, like how to justify economic stimulus:

All is paid for by so-called dereliction funding. About £300,000 was made available by the Department of the Environment and the Department for Social Development. A second round of funding is expected… The short-term beneficiaries were local builders and painters who were called in for the spruce-up.

But as Keynesianism goes, this is a pretty poor attempt at it. It suffers from the same false economies that most of the UK's policy does these days. If you're going to spend money with the aim of a) sprucing up a town in preparation for international visitors and b) providing work for local builders and painters, then a far better sort of stimulus would be to increase your initial outlay, to £3m or even £30m, and try to fill those properties with real businesses, rather than pretty pictures of businesses. In the short term, the cost will be more, but there's no substitute for having a thriving local economy, and you'll soon earn the outlay back.

But if Osborne understood that, we wouldn't be in this mess in the first place.

Enniskillen in Country Fermanagh. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.