Tuesday 6 March 2018

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.

The Government’s new National Development Plan (NDP) promises investments of a whopping €116bn (or if you prefer €116,000m). A second document – the National Planning Framework – provides a framework to accompany the investment plan. The two documents have been published jointly so that investment strategies can be closely aligned with strategic planning decisions over the next 20 years.[i]

If all of the investments earmarked under the €116bn plan are realised, they will contribute significantly to further growth in output and employment, with appropriate regional development. The planned projects will also provide clarity to the construction sector, allowing the industry to provide the capacity and capability required to deliver Government’s long-term investment plans.

What are the priority policy areas?

Traditionally, public investment funding is allocated to Government Departments – agriculture, energy, environment, transport etc. The new National Development Plan (NDP) does it differently. It focuses on ‘themes’ rather than Departments. These themes are aligned with the National Planning Framework’s classification called ‘national strategic outcomes’. Then each theme is required to be delivered by a lead Department, other relevant departments, and state agencies. For example, the theme of ‘Compact Growth’ will have the Department of Housing, Planning and Local Government in the lead, with two related departments (the Department of Transport, Tourism and Sport and the Department of Rural Community and Development) providing support.

Table 1 lists all of the ‘national strategic outcomes’ and the main issues to be tackled.

Table 1: National Strategic Outputs (to receive NPD Investment funds)

National Strategic OutputsIssues being tackled

€ billion

1

Compact GrowthSocial Housing, Urban Regeneration and Development

14.5

2

Enhanced Regional AccessibilityM20 Cork to Limerick National Roads

7.3

3

Strengthened Rural Economies & CommunitiesRural/Local Roads, National Broadband Plan, Agr. & Tourism

8.8

4

Sustainable MobilityMetro, DART & BusConnects

8.6

5

A Strong Economy, supported by Enterprise, Innovation and SkillsHigher/Further Education, BEI Programmes & Universities

9.4

6

High-Quality International ConnectivityAirport & Ports

4.8

7

Enhanced Amenity and HeritageCulture, Heritage and Sport

1.4

8

Transition to a Low-Carbon and Climate Resilient SocietyEnergy Efficiency, Boilers, Renewal Heat, Climate Action and Flood Defences

21.8

9

Sustainable Management of Water and other Environmental ResourcesIrish Water

8.8

10

Access to Quality Childcare, Education and Health ServicesChildcare, Schools and Health

20.1

11

Others sectorsJustice and Defence

3.0

12

Contingency/Reserve

7.4

Total

115.9

Source: Table 3.2 of National Development Plan, 2018-2027

Major Projects

The NDP does not list (and cost) each and every project that make up the total of €116bn. But information is provided for projects representing nearly 80% of the total funding. Table 2 lists the Top 20 project areas. Each of the project areas is to be allocated €1bn (or over). The total investment planned for the top 20 project areas exceeds €92bn.

It should be noted in the case of the National Broadband Plan, no cost is mentioned in the NDP. Instead, the Plan states that it is keeping the planned cost “confidential”.

Table 2: Major Project Areas in NPD

Major Project Areas (€1 bn, or over €1 bn)€ billion
1Energy Investment (renewals, interconnection etc)13.7
2Social Housing Provision11.6
3Health10.9
4Education (Schools)8.8
5Irish Water8.5
6National Roads5.7
7Regional and Local Roads4.5
8Airports3.8
9Higher/Further Education3.1
10Metro Link3.0
11Energy Efficiency – housing retrofit3.0
12BEI Programmes3.0
13BusConnects Programme2.4
14DART Extension2.0
15Urban Regeneration & Development Fund2.0
16University Investment2.0
17Justice1.3
18Rural Regeneration & Development Fund1.0
19Flood defences1.0
20Ports1.0
Grand total92.3

Source: Table 3.2 of National Development Plan, 2018-2027

Managing the roll-out of the NDP

It is relatively easy to list what public investment projects are required over the next 20 years. It is much more difficult to actually deliver them. Departments and State Agencies are required to ensure that all of the requirements for the different stages in the life-cycle of each project are met – from planning, to appraisal, to evaluation and finally to the monitoring of public investments.

The Public Spending Code produced by the Department of Public Expenditure and Reform is a very useful in listing what is required in the delivery of projects, but of itself the Code is not a panacea[ii]. It is the responsibility of Departments and State Agencies to fully apply the Code in the course of their work of rolling-out public investment. It is interesting to note that currently the Public Spending Code is under review. The review has been assisted by the recommendations of a report produced by the International Monetary Fund (IMF) last autumn.[iii]

That report made a number of recommendations to strengthen the governance arrangements for public investment in Ireland – see my blog of 16 November 2107 on the IMF Report.[iv]

Already, a number of the IMF’s recommendations have been taken into account, including the establishment of an Infrastructure Projects Steering Group by the Department of Public Expenditure and Reform, with senior representatives from all of the infrastructure and investment Departments. It will be interesting to see what other IMF recommendations will be taken into account during the completion of the review of the Public Spending Code. Certainly anything that helps Departments and State Agencies improve their delivery of investment projects must be welcomed.

Notes


[i] Project Ireland 2040 website, available here.

[ii] Public Spending Code, available here.

[iii] IMF Public Investment Management Assessment, available here.

[iv] An Outsiders Look at Investment in Ireland, PAI Blog, available here.