Last Friday in Sligo the Government launched Project Ireland 2040.
This included two core elements:
- A National Planning Framework; 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 10 years.
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 which creates a single vision for our country as a whole, both rural and urban.
This will deliver modern public infrastructure over the coming years which will improve the lives of people throughout Ireland and allow our companies and economy to continue to compete with the best in the world.
IMPLEMENTATION OF THE NATIONAL PLANNING FRAMEWORK
Public infrastructure investment will play a critical role in ensuring a ‘whole of government’ implementation of the National Planning Framework.
This National Development Plan will change how we invest in public infrastructure in Ireland.
It moves beyond the approach of the past which saw public investment spread too thinly and investment decisions which didn’t align with a spatial strategy.
These practices contributed to some of the major issues that we face today as a country, particularly the predominance of Dublin in terms of economic growth, alongside the challenges facing rural communities.
The National 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.
INCREASED AND SUSTAINABLE INVESTMENT IN INFRASTRUCTURE
The capital envelope detailed in the National Development Plan 2018-2027 is underpinned by prudent and moderate projections of the economy’s potential growth at 2% assumed over the period 2022 to 2027.
This aligns with the most recent projection from the European Commission for Ireland for the 2020s while being lower than the OECD long-term projection of almost 3% for the 2020s.
The National Development Plan will see public capital 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 last twenty 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-star, in 2021 and 4% by 2024, with sustained investment averaging 4% on an annual basis over the period 2022 to 2027.
The National Development Plan also reflects the ‘bottom-up’ demand for increased public capital investment identified in the evidence base produced for the review of the capital plan published in September 2017.
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.
NEW PROJECTS WITH DEDICATED RESOURCING
This plan includes many new projects and programmes which were not listed in the last plan published in 2015, for example;
- The M20 Cork to Limerick road,
- The New Hospital for Cork,
- BusConnects Programmes for Cork, Dublin and Galway and
- A major investment programme across the cultural institutions,
…to name a few.
While some projects may have been announced previously, those announcements were outside of a long-term funding framework required for their delivery which is now clearly set out in the NDP.
The existence of plans which weren’t joined up on a cross sectoral basis, or with the resources to implement them, was highlighted by the IMF as a weakness in our public management investment system.
Various strategies have previously been launched containing particular investment projects but the resources needed to implement them were not identified or available.
Before the launch of the NDP the Government was committed to investing €29 billion of Exchequer resources over the next four years.
In the NDP, this Government has now made a commitment of €90 billion Exchequer resources over the next ten years to deliver identified strategic investment priorities explicitly knitted into the objectives of the National Planning Framework.
NEW FUNDS
Identifying and explicitly funding long-term strategic investment priorities was just one of a number of innovations included in the National Development Plan which are designed to improve capital expenditure policy in Ireland.
This funding reform was introduced to encourage Departments to develop investment proposals directly targeted at the achievement of NPF priorities and which contribute to the clear articulation of a strategic 10-year vision for Ireland’s public capital infrastructure.
I would also like to highlight the 4 new funds established in the 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 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 NPF.
The Urban Regeneration and Development Fund will amount to €2 billion over the next ten years.
This Fund will be under the Department of Housing, Planning and Local Government and will support the co-development of the NPF’s growth enablers for the five cities and other large urban centres.
Examples of projects that have the potential to receive support under the Fund would include the development of the Cork Docklands, the Limerick 2030 initiative, the Waterford North Quays SDZ regeneration project, the plans for Galway City Centre regeneration, 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 in 2018.
Further details on the application process and selection criteria will be published in the 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, or 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.
REGENERATION
The plan also commits to the establishment of a new National Regeneration and Development Agency which will maximise the potential use of underutilised land banks 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, to place a spotlight on how specific land holdings, mostly already in public ownership, can and will be used to the maximum potential to deliver on the objectives of the NPF 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 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.
ACHIEVING BETTER VALUE FOR MONEY
The National Development Plan will see 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 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 – the IPSG- with senior representatives of all of the infrastructure and investment Departments 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 has already begun with the publication in September 2017 of a Major Capital Projects Tracker on the website of the Department of Public Expenditure and Reform.
The purpose of the tracker 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.
The Tracker 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 IMF to become the primary tool for public transparency on infrastructure project priorities, timelines and performance targets.
DEALING WITH CONSTRAINTS
Potential overheating risks and supply side constraints in the construction sector were addressed as part of the review of the Capital Plan as published in September 2017.
This highlighted the importance of adopting a prudent and measured approach to increased public capital spending as reflected in the National Development Plan in circumstances where there is a degree of uncertainty regarding the cyclical position of the economy and the likelihood of overheating risks being realised.
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 addition, to ensure regular and open dialogue between Government and the construction sector, a Construction Sector Working Group will be established.
A healthy and well-functioning construction industry which offers good long-term quality employment and construction output is essential to the achievement of the goals of the NPF and the delivery of the projects outlined in the National Development Plan.
The experience of the last fifteen years highlights the dangers for society and the economy when the construction sector expands too greatly and contracts too steeply.
CONCLUSION
To conclude, the National Development Plan sets out a detailed and positive vision for Ireland’s infrastructure over the next 10 years.
It includes a number of major new projects and very importantly it 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 which will improve how we invest in public infrastructure in Ireland.
Now that Project Ireland 2040 has been published, following extensive consultation, our focus will turn to ensuring the timely delivery of the plan 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 which will be among the highest in the EU, thereby delivering the kind of state-of-the-art public infrastructure necessary for our people and economy to thrive in the ever evolving modern world.
ENDS