Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Last Friday, the Government launched Project Ireland 2040 in Sligo. This includes two core elements: a national planning framework, led by the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy; and a €116 billion national development plan which sets out an ambitious and strategic vision for Ireland’s investment in public infrastructure over the next decade. With this plan, investment levels in Ireland will continue to increase at a sustainable rate and, very importantly, our infrastructure investment will be strictly guided by the national planning framework to create a single vision for our country as a whole, both rural and urban. This will deliver modern public infrastructure over the coming years to improve the lives of people throughout Ireland and allow our companies and economy to continue to compete with the best in the world.

This kind of investment will play a critical role in ensuring a whole-of-Government approach and implementation of the national planning framework. It will change how we invest in public infrastructure from the way we did this in the past. It moves beyond the approach which saw public investment spread too thinly and, crucially, it moves away from investment decisions which did not align with planning strategy. These practices contributed to some of the major issues that we face today, particularly the predominance of Dublin in terms of economic growth, alongside the challenges facing rural communities. This development plan is, therefore, strictly aligned to the vision set out in the national planning framework and its ten strategic outcomes, which were developed following extensive consultation over the course of 2017.

The capital plan detailed in the national development plan is underpinned by sensible and moderate projections of the economy’s potential growth, which are assumed at 2% over the period 2022 to 2027. This aligns with the most recent projection on growth from the European Commission for Ireland for the 2020s, while being lower than the OECD long-term projection of almost 3% for the same period. This plan will see public investment in Ireland increase from relatively low levels following the recession to being among the highest in the EU by 2021, and this will be sustained over the entire remaining period of the plan. The plan sets out a total public investment programme of €116 billion for the period 2018 to 2027, including both Exchequer and commercial State-owned enterprise investment.

The average capital investment in the EU over the past 20 years was in the region of 3% of national income. Under the national development plan, it is projected that public capital investment will reach 3.8% of national income, or GNI*, in 2021 and 4% by 2024, with sustained investment averaging 4% on an annual basis over the period 2022 to 2027. This reflects the bottom-up demand for increased public capital investment identified in the evidence base produced for the review of the capital plan last September. This approach will ensure that public investment underpins the sustainability of economic growth and avoids contributing to economic instability and exacerbating any risks of unbalanced and inflationary growth.

The plan includes many new projects and programmes that were not listed in the previous plan published in 2015. I refer, for example, to the M20 Cork to Limerick road, the new hospital for Cork, the BusConnects programmes for Cork, Dublin and Galway, and a major investment programme across the cultural institutions, to name but a few.

While some projects may have been announced previously, those announcements were outside of a long-term funding framework and reflect the commitments that we now have to communities and citizens throughout the country. The existence of plans that were not joined up on a cross-sectoral basis, or with the resources to implement them, was highlighted by the International Monetary Fund as a weakness in our public management investment system. In the past, various strategies were announced but the resources needed to implement them were not available.

Before the launch of the national development plan, the Government was committed to investing €29 billion of Exchequer resources over the next four years. Under this new plan, the Government is now making a commitment to provide €90 billion in Exchequer resources over the next decade to deliver identified strategic investment priorities explicitly knitted into the objectives of the national planning framework. Identifying and funding long-term investment priorities was just one of a number of innovations included in the national development plan that are designed to improve capital expenditure policy in Ireland. The funding reform was introduced to encourage Departments to develop investment proposals directly targeted at delivering planning priorities and which contribute to the clear articulation of a strategic ten-year vision for Ireland’s public capital infrastructure.

I will highlight the four new funds established under the new plan. These funds will have a combined allocation of €4 billion and will be allocated on a competitive basis for projects which meet the criteria of the funds. These funds will help us to meet challenges in the areas of rural development, urban development, climate change and disruptive technology. The rural regeneration and development fund will amount to €1 billion over the next ten years. This fund will be under the control of the Department of Rural and Community Development and will promote rural renewal in order to enable towns, villages and outlying rural areas to grow sustainably and support delivery of the strategic objectives of the national planning framework. The urban regeneration and development fund will amount to €2 billion over the next ten years. This fund will be under the control of the Department of Housing, Planning and Local Government and will support the co-development of the framework's growth enablers for the five cities and other large urban centres. Examples of projects that have the potential to receive support from the fund would include the development of the Cork docklands, the Limerick 2030 initiative, the Waterford north quays strategic development zone regeneration project, the plans for the regeneration of Galway city centre and the Portlaoise urban design and renewal initiative. Each of the funds will be operational from January 2019, but work on preparing applications can start immediately for submission this year. Further details on the application process and selection criteria will be published in coming weeks.

There are a number of existing models that we will draw on in designing the funds, including the local infrastructure housing activation fund, LIHAF, operated by the Department of Housing, Planning and Local Government. The intention is that the funds will play an important role in moving away from providing funding resources to individual organisations - essentially on the basis of current investment patterns - in favour of supporting collaborative bids for funding important projects on a competitive basis. The plan also commits to the establishment of a new national regeneration and development agency that will maximise the potential use of under-utilised landbanks in cities and towns across Ireland. This agency will work closely with the local government sector, central government, a range of existing agencies and public bodies and the semi-State sector in order to identify how specific land holdings, mostly already in public ownership, can and will be used to better potential to deliver on the objectives of the national planning framework and national development plan. The body will also identify a clear and practical sequence of steps to be taken by the relevant stakeholders in achieving the tasks set for it and all relevant public bodies by the Government. This will make a significant difference when it comes to improving the efficiency and effectiveness of our public infrastructure investments over the coming period.

The national development plan will also facilitate the implementation of the recommendations of the International Monetary Fund’s public investment management assessment, which was carried out in 2017. This will lead to a greater focus by the Government on achieving value for taxpayers’ money when it comes to public capital investment in Ireland over the period of the plan. In particular, the Department of Public Expenditure and Reform will establish an infrastructure projects steering group, IPSG, on which senior representatives from all of the infrastructure and investment Departments will serve and which will lead in developing cross-sectoral dialogue on infrastructure, including identification of national priorities and actions and standardisation of data presentation. This reform agenda began with the publication in September of a major capital projects tracker on the website of the Department of Public Expenditure and Reform. Its purpose is to inform citizens of the variety of projects currently in the planning and construction phase and to also give a greater oversight to construction and infrastructure sectors of the Government’s investment commitments and opportunities. It will provide the public, businesses and other stakeholders with reliable information about current and future infrastructure delivery. It will be updated to reflect the further projects now included in the national development plan and will be further developed with technical assistance from the International Monetary Fund to become the primary tool for public transparency on infrastructure project priorities, timelines and performance targets.

Potential overheating risks and supply side constraints in the construction sector were addressed as part of the review of the capital plan published last year. This plan highlights the importance of carefully increasing capital spending to ensure that the national development plan is delivered with good value to taxpayers. The measured but ambitious increase in capital expenditure and long-term planning included in the national development plan, and detailed in the major capital projects tracker, will provide greater certainty to the construction industry as to what infrastructure requirements are coming down the tracks and enable them to plan accordingly and increase their capacity and productivity in order to deliver the projects which are now in the pipeline.

In order to ensure regular and open dialogue between the Government and the construction sector, a construction sector working group will be established. A healthy and well-functioning construction industry that offers good, long-term and quality employment and construction output is essential to the achievement of the goals underlying the national planning framework and the delivery of the projects outlined in the national development plan. The approach we have outlined, and the processes by means of which we hope to facilitate it, have been broadly welcomed by the sectors of the economy that we will rely on to make the plan happen. This is because the experience of the past 15 years highlights the dangers for society and the economy when the construction sector expands too greatly and contracts too steeply.

The national development plan sets out a detailed and positive vision for Ireland’s infrastructure over the next decade. It includes a number of major new projects and, very importantly, sets out the funding which is being made available to deliver those projects. This reflects a number of innovations in capital expenditure policy which are included in the national development plan and which will improve how we invest in public infrastructure in Ireland. Now that this plan has been published, following extensive consultation, our focus will turn to ensuring its timely delivery in a manner that guarantees value for money for the Irish citizen. This plan will ensure the implementation of the national planning framework through investment levels that will be among the highest in the EU, thereby delivering the kind of state-of-the-art public infrastructure which is vital for our economy and society to thrive in the ever-evolving modern world.

See this speech in context