3. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the progress of the capital review; if the ten-year plan will outline funding beyond the 2021 timeframe; the way in which it will co-ordinate with the national development plan; if it will it incorporate a review of the role of PPPs; and if he will make a statement on the matter. (Question 53590/17 asked on 14 Dec 2017)
Deputy Dara Calleary: The capital review plan has been announced many times. Will the Minister provide an update on it? I am conscious that he intends to link the capital review with the national planning framework, a document which is extremely flawed. It is only in the consultation phase. Will the roll-out of the national planning framework delay the national capital plan?
Minister for Public Expenditure and Reform (Deputy Paschal Donohoe): As previously outlined to the Deputy in response to his parliamentary question on this matter in September and at other points, I will bring forward a review of the capital plan that will highlight some key themes which will closely inform and be incorporated into the analysis leading to finalisation of the new ten-year plan for public capital investment for the period from 2018 to 2027. The themes include confirmation of the central role of public capital investment and addressing overheating risks, as well as supporting social progress, the need to align public capital investment with a changing demographic profile, the critical importance of public capital infrastructure in meeting the essential requirement for balanced regional growth and promoting the societal transformation required to achieve climate action objectives, responding to Brexit, driving value for money and having in place strong business cases to underpin important projects. Based on this analysis, the review of the capital plan identified a number of key sectors as priorities for investment including transport, education, housing and health.
Consequently, between 2014 and 2021, public capital investment in Ireland will have more than doubled and as set out by the Irish Fiscal Advisory Council, this will see public investment in Ireland moving to among the highest in the EU. Capital expenditure will reach €7.8 billion in 2021, which is 3.5% of gross national income (Star), GNI*, and 11% of total voted expenditure.
As I have said on a number of occasions, it is my intention and that of the Government to integrate the capital plan with the national planning framework. The latter, as the Deputy correctly said, is out for consultation.. I believe that consultation will conclude quite soon. Once that is finished, we will finalise the national planning framework which will, in turn, determine the capital plan and we aim to publish both early in the new year.
Deputy Dara Calleary: While I know it is not the responsibility of the Minister’s Department, the national planning framework is a document that is causing serious concern. It has laid out choices with regard to the cities that are being selected but is leaving everything else to the regional assemblies in terms of spatial planning and, one would imagine, in terms of capital investment. Were we to publish the national planning framework in the first quarter of next year, there still would be a lot of work to be outlined for those areas and towns that have yet to be selected. Will the projects within the capital plan be put on hold until the full national planning framework is published or will the Minister go ahead with a capital plan in the context of the current version of the national planning framework?
Deputy Paschal Donohoe: We will go ahead with a capital plan once the input from the current consultation on the current draft plan is assessed and if any of it is taken on board. As for what the capital plan will look like, as Deputy Calleary is aware, the planning framework highlights a number of cities at present and beyond that, the framework will be influenced and led by regional assemblies. I do not anticipate that the ten-year capital plan will be able to detail every capital project undertaken in the country over the next decade. Work will need to go on at a regional level to translate the national planning framework into a reality, county by county. It is only when that work is done that we will be able to determine the full allocation of all of the planned expenditure. The capital plan will have a balance between identifying a number of projects and funds to ensure that the national approach is delivered, while still leaving flexibility in respect of many other parts of our State.
Deputy Dara Calleary: The International Monetary Fund, IMF, published a review of our infrastructure earlier this year and was generally positive about a lot of our infrastructural projects. However, it did state that the differing sectoral approaches to infrastructural development was an issue. It also noted that the state of our infrastructure was a barrier to progress. I presume the plan will deal with that but how are we going to deal with the differing sectoral approaches? Are we going to take an all-of-Government approach to infrastructural development and lay down certain standards? In that context, I welcome the fact that Luas cross-city came in under budget. Will the lessons of that project be learned and transferred across all capital spending?
Deputy Paschal Donohoe: There are two learnings that I have taken from the Luas cross-city project. The first is that if one has a State body that is led strongly with the right expertise in place and with a really clear mandate that is supported politically by its line Department, it can deliver complex projects on time and under budget. It is worth emphasising that Luas cross-city is a light rail project that, by and large, was built in the middle of our capital city and the complexities involved in that were immense. That is certainly something that I will be keeping in mind when we move forward.
Regarding the public investment management assessment, PIMA, report prepared by the IMF, the Deputy is correct that the IMF points out that in some areas, infrastructure is an impediment to realising all that we could do economically and socially. I have said the same on a number of occasions already. However, the IMF also said that in other areas, the quality and quantity of our infrastructural stock is positive. In response to the Deputy’s questions on sectors, I intend that the capital plan will be multisectoral but there will be a balance. It is not realistic or achievable for the Government to say how every cent that may be available to the country will be spent over the next decade. We have to allow business cases to be made and we have to allow the national planning framework to be transferred into a reality in regions as well. As I said, we want to highlight and identify some key projects and then to create a framework for others.