Spend Local: Scheme should have targeted lockdown closures, says study

The analysis suggests the Spend Local scheme should not have been used in supermarkets

Stormont's Spend Local scheme should have targeted businesses forced to close during the Covid-19 pandemic, economists from Queen's University Belfast (QUB) have suggested.

The £136m scheme was designed to boost businesses affected by coronavirus lockdowns.

It allowed everyone over the age of 18 in Northern Ireland to apply for a £100 pre-paid card.

The QUB study has said supermarkets should have been excluded.

It also said the scheme should have been designed to help pensioners and those on income support as those measures "would have had a greater economic effect".

Official figures by the Northern Ireland Statistics and Research Agency (Nisra) found that one third of the high street vouchers were spent in businesses that did not have to close during the pandemic.

The Department for the Economy has not yet conducted its final analysis into the scheme.

In an article published in The Economics Observatory, Prof John Turner and Dr David Jordan said: "Given the high proportion spent in supermarkets, it is very likely that a substantial proportion of extra expenditure by consumers leaked out of the local economy."

The academics found the busiest month for transactions was November

They criticised the "poor timing" of the scheme, suggesting it should have operated from late August to October, months which have lower retail footfall.

It found the busiest month for transactions on the pre-paid cards was November, a month when retail spending is traditionally high before Christmas.

They suggested these factors meant an increase in spending in Northern Ireland was "much lower than was originally intended or would have been hoped for".

"A post-scheme evaluation needs to happen to determine whether this policy experimentation was cost-effective and worth repeating," the assessment concluded.

The scheme opened for applications on 27 September 2021 and was supposed to close on 30 November, but the deadline for spending the cards was extended a number of times due to various problems and delays.