Oireachtas Joint and Select Committees

Thursday, 1 July 2021

Committee on Budgetary Oversight

Capital Investment: Department of Public Expenditure and Reform

Mr. Ronnie Downes:

Maybe I will go first on this one. There is a general point there and then there is applying the general point to the specific case of the construction sector. Generally speaking, it would be well accepted among economists that in a market economy, the private sector could be expected to do a good job of delivering certain services, such as supermarkets and so on. Then there may be other services the market is not in such a good position to deliver from time to time and the State steps in and provides them.

On the construction sector, we must also bear in mind that when we are talking about the public sector versus the private sector, sometimes the distinction can be a bit more blurry. It is the case, for example, that when we are going out to tender for the construction of a new housing complex, prison, school or whatever it might be, generally speaking the public sector is reliant on contractors to bid to build those facilities. There is only so much capacity in the country to deliver that at any one point in time. A good way of expressing it from a slightly different angle is that there are many ambitions we are doing our best to move forward on and commitments in the programme for Government, such as the area of retrofitting of social housing and public buildings. There is also what we were talking about earlier, that is, those ambitions and commitments the Government is moving forward on with housing policy and so on. Professor John FitzGerald and others have made the point that there is a lot of overlap in terms of capacity for achieving all of those objectives at once, particularly if we are going to upskill people to become familiar with retrofitting. There are things we can do to expand our labour force and the levels of expertise out there to deal with that but inevitably it will involve and draw some people who would perhaps be more traditionally involved in the construction of buildings into the retrofitting side. That is all a way of saying there are capacity constraints, whether we put it under the label of the public sector driving ahead with a particular policy agenda or the private sector providing it, there is an overlap and when they do meet with respect to those capacity constraints we must try to address that as best we can.

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