Beverley Flynn (Mayo, Independent)
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Question 540: To ask the Minister for Finance if his attention has been drawn to the fact that the gap in income [i]per capita[/i] between the BMW region and the south and east region stands at 42%; that this gap has widened in the past ten years; that the BMW region accounts for a declining share of national wealth; that the shortfall between projected and actual expenditure under the national development plan in the BMW region stands at €3.65 billion; and in view of the fact that this underspend will not be made good in the remaining short lifetime of the national development plan, he will make a statement on the way in which he intends to address the crisis. [1754/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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In responding to the question I will be using data for regional gross value added, GVA, for 2002 published on 23 March 2005 by the Central Statistics Office. I am assuming that this is also the data the Deputy is referring to.

Gross value added represents the value of goods and services produced. The average output level in the BMW region, as measured by GVA, stood at just over 69% of the State average in 2002. The south and east region was 11.1% above the State average in 2002. The gap in GVA between the two regions has grown from 34.2% in 1995 to 42% in 2002. GVA is a measure of output and not of income and the regional breakdown should be viewed with caution. The Deputy should note that GVA includes total profits of companies, considerable levels of which arise in the State but accrue to non-residents. The level of GVA in the BMW region is approximately 92% of the EU 25 average. Furthermore, the workforce that produces the GVA in a region may not live there and may bring their incomes home to a neighbouring region.

With respect to income, the CSO estimates that disposable income per person in 2002 in the BMW region was 8.2% below the State average. The similar measure for the south and east region was 3% above the State average. There are a number of points also to keep in mind. First, the 2002 data suggest that disposable income levels between the regions are converging. The gap of 11.2% in 2002 has narrowed from 12% in 2001 and 13.4% in 2000. Second, differentials in the cost of living and housing between the regions would suggest that the gap in prosperity between the regions is considerably narrower than the data for disposable income indicates.

Convergence between the two regions has occurred in respect to employment. Data from the CSO quarterly national household survey indicate that, between the third quarter of 2000 to the third quarter 2005, the number employed increased by 20% in the BMW region compared with 13% in the south and east region, the labour force grew by 19% in the BMW region compared with 14% for the south and east region and the participation rate grew by 6% in the BMW region compared with 3% for the south and east region. In the third quarter of 2000, the unemployment rate in the BMW region was 1.6% above the rate for the south and east region. The rate of unemployment was lower in the BMW region in the third quarter 2005 at 4.4% compared with 4.7% in the south and east region.

The Deputy will be aware that investments under the national development plan are delivered through a number of operational programmes, OPs, which are directly managed and implemented by Departments, the regional assemblies or other agencies. The responsibility of my Department is to ensure that resources are made available to meet the Government's objectives and to secure full drawing down of Ireland's allocation of Structural Funds. Departments have been asked to ensure that the investment objectives for the BMW region are prioritised.

Significant progress continues to be made in the implementation of the national development plan in the BMW region. The most recent monitoring data reported to my Department indicate that overall around €10.3 billion has been expended in the region under the plan over the period January 2000 to end June 2005. This represents 74% of total profiled expenditure for the years 2000 to 2006.

Expenditure under the EU funded elements of the operational programmes will continue until the end of 2008. Therefore, significant levels of expenditure will be incurred in the years 2007 and 2008 which will have to be considered when viewing the rate of progress on the measures supported by the Structural Funds. To ensure full utilisation of Structural Funds and matching public resources, expenditure levels should exceed 50% at the end of 2004 the midway point in the programming period. At the end of 2004, estimated expenditure of the Structural Funds and matching public resources amounted to €1.4 billion or 72% of profile. This is well above the midway target and should ensure that all Structural Funds and matching public resources for the programming period 2000-06 are fully expended.

With respect to the eventual outturn for the NDP, I expect the end 2006 position for the key economic and social infrastructure OP and employment and human resources development OP to be close to or above targets with the Exchequer contribution likely to be above profile. The position for the PEACE and technical assistance OPs will be close to their targets at the end of 2006. The regional programmes and the productive sector OP are unlikely to achieve their end 2006 targets, particularly for those measures that are not co-funded by the Structural Funds. The Exchequer contribution to the regional programmes is not expected to reach its target by the end of 2006. This relates to the level of EU co-financing in the programmes where expenditure will continue until the end of 2008.