Dáil debates

Wednesday, 26 February 2014

Other Questions

Capital Programme Expenditure

5:50 pm

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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6. To ask the Minister for Public Expenditure and Reform if he will provide a breakdown of the amount spent on and nature of the stimulus projects introduced since 2011; their importance for the national economy; the breakdown at local and-or regional level of the various projects; and if he will make a statement on the matter. [9306/14]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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10. To ask the Minister for Public Expenditure and Reform the number of jobs that were created as a result of the July 2012 stimulus plan he announced; when the plan will be fully implemented; if a review of the plan has taken place; and if he will make a statement on the matter. [9448/14]

Photo of Ann PhelanAnn Phelan (Carlow-Kilkenny, Labour)
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40. To ask the Minister for Public Expenditure and Reform if he will provide a breakdown of the amount spent on stimulus projects since 2011 in the areas of health, education, transport, child care infrastructure and so on; their importance for the national economy; a breakdown at local and-or regional level of the various projects; and if he will make a statement on the matter. [9407/14]

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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I am trying to get a handle on how the stimulus proposals have impacted on a regional basis, how they have affected the national economy and the number of people who have been employed in each region.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 6, 10 and 40 together.

In 2011, my Department led a Government-wide review of the public capital programme which culminated in the setting of a new investment framework for 2012 to 2016. The framework includes investment of €17 billion across a range of sectors over that five year period. Since then, I have made a number of announcements in relation to additional capital investment, including in July 2012 a €2.25 billion stimulus package, which included a new €1.5 billion public private partnership programme involving projects across the education, roads, health care and justice sectors; in June 2013, a €150 million Exchequer investment in schools, energy efficiency and roads projects; and in budget 2014, along with the €200 million already committed to the national children's hospital, some €200 million from the national lottery licence transaction. Information on these projects was set out in my Department's announcement on budget day.

Activity on the PPP programme is well under way, with seven of the nine stimulus PPP projects already issued to market and the largest project in this phase, the N17-N18 Gort to Tuam road, due to reach contract award shortly. There has been active market engagement from investors and construction contractors, reflecting the growing confidence in the economy. We had great difficulty getting PPPs back on the agenda following the difficulties faced by the economy. Investment in the PPP stimulus package is expected to generate around 13,000 jobs. At this early stage in the process, most of the employment impact has been in the technical and advisory areas and a number of enabling works have also begun. This year, €45 million will be invested from the proceeds of asset sales to meet costs associated with those enabling works. Construction on the N17-N18 project is planned to commence during 2014, with accommodation projects starting before year end.

In relation to the €150 million Exchequer stimulus announced last year, €60 million was invested in 2013 on the roads and energy efficiency projects, with the remainder due to be drawn down by the end of 2015. It is envisaged that around 3,000 jobs will be supported through this investment. Expenditure on national lottery licence funded projects will commence shortly once the transaction has been finalised. I can inform the House that I expect that to happen tomorrow. Due to the wide variety of projects being supported, figures for employment impact are not available now but the types of works involved generally represent areas of high labour intensity.

As I have indicated, a review of the public capital programme will be undertaken this year which will include an examination of the scope for using non-traditional funding sources to further augment capital investment. I am very conscious that we are constrained in terms of the quantum of money that will be available to us. We are spending between €3 billion and €3.5 billion per annum on capital projects. For as long as we can see into the future, we will be constrained financially. We need to be constructive in terms of looking to PPPs and investment from other sources to ensure we get as much infrastructural development and jobs as we can.

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour)
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The national children's hospital is welcome, as is the construction of new classrooms to replace prefabricated buildings. I acknowledge that a great deal of work is being done and welcome the 3,000 additional jobs. We are currently experiencing a housing crisis in the private sector and in the social housing area. I recently read in a report that there is pent-up demand for 80,000 units in the Dublin area alone. On top of this, there is a huge demand for social housing. In the context of the envelope available for investment, can additional funding be provided for the provision of social and affordable housing? A large number of people renting in the private sector would like to purchase homes and have families.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I am very conscious of the issues raised by Deputy Humphreys. There are many large road projects under way in the transport sector. We also have large projects in the education sector because we need schools to meet the demographic change. We also need to invest in the Grangegorman project which I believe will be the flagship education project of this Administration. Housing is a new issue. It was for that reason I allocated, from the modest sum available in the budget for additional capital over and above the public capital programme, €30 million for housing. It is an issue I would like to revisit. I am aware the Minister of State, Deputy Jan O'Sullivan, is concerned about rising rents and market forces pushing people out of the housing market. We cannot have a situation whereby we are chasing rising rents with more money from the Exchequer. I do not think that is the way to go. We need to return to some form of traditional house building. We are engaged in how that particular issue can be addressed.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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My question is along a similar vein to that posed by Deputy Humphreys in that it relates to capital spending and the July 2012 stimulus package of €2.25 billion over a seven year period.

For me and, I imagine, for the Minister the key issue is jobs. At issue is not only construction jobs because many projects are also delivering sustainable jobs. On top of that, if the investments are strategic in nature, then there will also be long-term jobs by way of making the economy more competitive in terms of broadband. I am keen to hear the Minister's views on the matter but, to be honest, I am not confident about it because I have tried to track various announcements dating back to the previous Government as well as the current Government. The projects take so long. From the date they are announced until there are diggers on the ground takes several years. Let us consider my area in Cork. Certainly, a good deal of money is being spent on education and there is a new prison in Cork but other projects seem to get stuck in bureaucracy. Is there any initiative within the Department to review how projects can be rolled out with a view to accelerating them in order that we can get the job creation benefits for which they are intended?

6:00 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I share the Deputy's concern in as much as public private partnerships take a long time to come to fruition. We had a major difficulty in the beginning because the market was so seared by the cancellation of PPP projects at the time of the economic collapse. We are going back to the same body of funders in the market and suggesting that we want them to bid for these projects and put in their money upfront. It takes a major effort. The first PPP we got over the line was the Newlands Cross and N11 project and that was almost totemic. Once we got that across, a growing confidence emerged.

I have a monthly monitoring system in my Department to watch all PPPs. I meet representatives from the National Development Finance Agency regularly and I will meet them again shortly. I met them last month as well. We are keen to ensure that there are no delays but there are several constraints. For example, I have asked for school bundles to be joined together where we have resources and if there is a market willing to fund it. Then, we have to deal with the construction capacity within the Irish economy to bid for large projects. I assure the Deputy that every possible measure that can be taken to ensure PPPs are delivered is being taken and I am confident that a good system is in train now.

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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My point was general and not specific to PPPs because there are still few of them in place in reality. The difficult is with the capital budget, from the initial stage when it is announced to the design and through to construction. It seems to take forever. It is not only the delivery of projects. Let us look back. The Government announced in September 2011, two and a half years ago, that we would have a strategic investment fund on a statutory basis and that some money from the National Pensions Reserve Fund would be channelled into commercially feasible projects, but we are still waiting for the legislation. The Minister is responsible for capital expenditure and I would have expected that such legislation would have been fast-tracked. Instead, it seems to have simply got lost. I know we are expecting it shortly but we are two and a half years on.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That legislation does not fall within my remit but it will be published next month. That is no constraint. We have the agreement of Government to expend the money. We do not need the new legislation to allocate the funding and it has not been a constraint for me in pushing co-funding projects. That is not an issue.

Reference was made to non-PPP projects. There can be frustrations. For example, one project - I realise it is a PPP project - involves school bundles. Two of the planning applications were refused and that knocked things back and we had to start again. We were keen to have the children's hospital up-and-running by now but An Bord Pleanála made a decision on that. Then, we had to change the site and now it will take longer but it will be completed by 2018. We need to have construction started next year.

There is a frustration with these big projects. It takes time for the design, they must have careful planning, they must have the funding in place and they must have local community assent. That is the way we have. These things can sometimes cause difficulties. Even relatively small projects are faced with local opposition sometimes and those involved have to be dealt with, assuaged and encouraged, and the real concerns have to be addressed.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Reference was made to the Minister's efforts at job creation and the stimulus package. In particular, some points were made by Deputy Humphreys about housing. Does the Minister believe it is appropriate that Fingal County Council is currently offering staff an under-the-counter payment of €5,000 per employee to transfer out of the housing department? If we were to factor up that amount of money, it would be the equivalent of two full-time workers employed in the housing area.

My understanding was that under the Haddington Road agreement local authorities and organisations in the public sector were prevented from making any under-the-counter payments to secure deals on transfers. Will the Minister investigate this matter? The reality is that the local authority is proposing to use public funds to incentivise workers out of one area and to transfer to another area. Such moneys could have been used for job creation and at least two full-time jobs could have been created with the equivalent amount.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I know nothing about the charge the Deputy is making. It might be one that Deputy Daly may wish to bring to the attention of the local government auditor. I can only say to the Deputy that I am giving her a very fine new manager in Fingal County Council shortly. I will be sorry to lose Mr. Reid, who is the officer in charge of the reform unit in my Department. Deputy Daly will find when he gets out there that he will be an extraordinary asset to the county.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Will the Minister confirm whether under-the-counter payments were outlawed under the Haddington Road agreement?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I know nothing about that.

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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It is the Minister's deal.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The issue of under-the-counter payments never arose in anything. I have no idea what Deputy Daly is talking about.