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Tom Ferris is a Consultant Economist specialising in Better Regulation. He lectures on a number of PAI courses and contributes blogs regularly to PAI. He was formerly the Department of Transport’s Senior Economist.

If you want make your views known on Public Investment Priorities, you only have a few days to go. The Minister for Public Expenditure and Reform, Paschal Donohoe TD, has set close of business on Sunday 30 April 2017 as the final day for submissions under the public consultation on the Mid-Term Capital Review.

The Capital Plan

This is a review of the 2015 Capital Plan. It sets out a six-year framework for infrastructural investment in Ireland, up until 2021. Since the Plan was formulated, the Government have committed some additional resources to the capital programme. The mid-term review, now under way, is designed to take stock of the national infrastructure priorities and to allocate any further resources so that the social and economic needs are best met.

At the launch of the review on 31 March 2017, the Minister Donohoe said that the:

“…original plan was to invest €42bn across all sectors, including €27bn in Exchequer funding. The Government has added over €5bn to this, including our commitment of €2.2bn for housing. These are substantial resources, which will continue to be directed to achieving real social and economic progress and help us to better meet the challenges and opportunities associated with Brexit that may lie ahead in the years to come”.[i]

 

Extra Capital Funds available

The economic growth generated in recent years has enabled the Government to commit an additional €5.14bn in Exchequer capital funding in support of the Capital Plan. Of this, €2.2bn has already been pre-committed to support the Government’s Action Plan on Housing and Homelessness. Further, Budget 2017 saw the allocation of additional capital funding for 2017, which has carry-over implications for 2018 and 2019. This means that €2.65bn now remains to be allocated on the basis of the outcome of this mid-term review.

The public and key stakeholders are now being asked to give their views as to how that sum should be allocated.

The Author’s Views

This blogger believes that the extra funds should be split between housing, and public transport and cycling initiatives. Additional housing investment is needed if the economy is to provide 30,000 new houses a year, over the next few years, to meet the needs of a growing population in Ireland. However, the addition of €1.33bn will only go part of the way to helping achieve the annual housing target.

The provision of an extra €1.32bn investment in public transport and cycling initiatives can be justified where it is clear that sustainability and climate change issues are being addressed. It is interesting to recall that it is 30 years since Dr Harlem Brundtland, under the wing of the World Commission on Environment and Development, issued the report Our Common Future. That report defined sustainability as “… development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.[ii]

That principle is still very pertinent in meeting the challenge to the environment. Already there is considerable evidence that one of the most effective ways individuals can reduce their carbon footprint is to switch to public transport and cycling. Those who choose to go by public transport can conserve energy by eliminating travel that would have otherwise been made in a private vehicle. Those cycling can also enjoy health benefits. The results manifest themselves in fewer vehicle miles of travel and reduced emissions.

Funds must be spent efficiently

Making one’s views known on investment allocation is not sufficient. It is also extremely important to ensure that the funds are well spent. Specifically, the investment projects that are targeted must be carefully planned and appraised, to ensure that the business cases are robust. The appraisal for projects must demonstrate that there is a clear net economic and social benefit if they are to proceed. There are good guidelines available to ensure that all the necessary work in planning and appraising is done in a coherent way. The Public Spending Code, produced by the Department of Public Expenditure and Reform, provides a consistent set of rules and guidance for the delivery of public projects.[iii]

Under the Code, each Government Department and State Agency is responsible for ensuring that Value-for-Money appraisal and evaluation is carried out in relation to the planning, management, and delivery of Government expenditure programmes and projects.

Notes


[i] Available on the Department of Public Expenditure and Reform, available here.

[ii] Available on the Sustainable Measures website here.

[iii] Available on the Public Spending Code section of the Department of Public Expenditure and Reform website here.

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