Regional Development: Discussion with Department of Finance.

The purpose of this meeting is to hold a discussion with officials from the Department of Finance on the National Development Plan 2000-2006, specifically regional development. I welcome Mr. Pat Casey, Mr. Dermot Nolan, Mr. Declan Kelly and Mr. John Palmer from the Department of Finance. Before asking Mr. Casey to make his presentation, I draw witnesses' attention to the fact that while members of this committee have absolute privilege, the same privilege does not extend to witnesses. Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against any person outside the House, or an official, either by name or in such a way as to make him or her identifiable.

Mr. Pat Casey

I thank the joint committee for the opportunity to make a presentation on expenditure in the National Development Plan and Community Support Framework 2000-2006. In the course of these opening remarks, which focus on the financial implementation and physical outputs of the plan, I hope to address some of the issues which have been raised by Members of the Oireachtas through parliamentary questions and other routes. At the outset, I wish to make two general points. First, under EU rules, spending under the 2000-06 round may continue in 2007 and 2008 in respect of commitments entered into in 2005 and 2006. This means we will not have final data for financial implementation for the last round until next year's returns are in. Second, the NDP financial envelope included not only Exchequer and EU funding but also assessments of the possible take-up by the private sector of funding opportunities that were available to them. Both of these points should be kept in mind when examining the financial implementation figures for the end of 2006.

The NDP-CSF has made a major contribution to our economic growth and employment levels, and has significantly enhanced Ireland's competitiveness. It set out to ensure Ireland remained competitive in the global international marketplace and that the economic success would be shared more equally at regional level and throughout our society. The plan was framed after an extensive consultation process that included social partners and regional interests. It reflected the broad consensus on the future development needs of the country. The plan provided for an investment in the order of €57 billion of public, private and EU funds over the period 2000-06.

Could we have more volume on the speakers please? I am finding it hard to hear with all the noise. Thank you.

Mr. Casey

This included significant investment in infrastructure such as roads, public transport, water and waste services, health services, social housing, education, industry and rural development. Unlike previous plans, most of the public funding for this plan, approximately 90%, was provided from domestic sources, mainly the Exchequer. Nevertheless, the contribution from the EU will total €6 billion, with €3.8 billion from Structural and Cohesion Funds, and €2.2 billion under the Common Agricultural Policy rural development funding.

The 2000-06 plan contains three main categories of funding: Exchequer, EU and private sector. In broad terms, the expectation is that when the final results are in, the Exchequer and EU components will be broadly in line with the forecast. The private sector component, however, will not. Many of these schemes are demand driven. This means funding possibilities are made available and published at the start of the programme but implementation is, in the final analysis, heavily dependent on private project promoters coming forward with proposals and spending the money on these.

Despite lower than expected take-up by the private sector, some €54 billion is expected to be spent on the NDP-CSF to the end of December 2006. This represents 95% of the original profile for the life of the plan. The Exchequer and EU contribution to the plan for the same period amounts to €46 billion, which represents 104% of original profiled Exchequer and EU expenditure for the lifetime of the plan.

Overall, the assessment by the Department is that the original NDP-CSF forecast will largely be met, even though there are likely to be broadly offsetting variances as compared to the original forecasts at individual operational programme level. The final Exchequer and EU expenditure is expected to largely cover a lower than expected take-up from the private sector.

The €54 billion in investment is concentrated mainly on two operational programmes, namely, the Economic and Social Infrastructure Operational Programme, ESIOP, and the Employment and Human Resources Development Operational Programme, EHRDOP. Combined, they account for 80% of total expenditure to December 2006. The ESIOP has provided over €8 billion for national roads funding — 69 projects completed so far — totalling more than 500 km of new roadway, including 170 km of new motorway. Major projects have included the Dublin Port tunnel, the M1 to the Border, M4, M7, M8, motorways and M50 upgrade and many other dual carriageways and town bypasses.

Some €3.6 billion has been invested in public transport initiatives such as the Luas, the DART upgrade, hourly services to Cork from Dublin, the modernisation of the Iarnród Éireann rail fleet, and the introduction of the rural transport initiative. A total of €3.1 billion has been invested in environmental infrastructure projects. Meanwhile, €10 billion has been invested in housing projects, €3.2 billion in health and €2.9 billion in education infrastructure.

We furnished the clerk of the joint committee with a review of the NDP-CSF, which was circulated to the committee earlier. This briefing document provides details of these and other achievements, as set out in the plan. I will highlight one or two others for the joint committee. The human resources development operational programme's investment in productivity improvements, unemployment prevention and skill enhancement has contributed to the historically high workforce participation rate and low unemployment rates. Strong progress continues to be made in strengthening Ireland's position as a knowledge-driven economy. Enhanced funding to business and third-level institutions, and investment in new technologies such as broadband provision, have significantly improved our competitiveness position. Furthermore, investment under the plan has also created over 31,000 new child care places. Cross-Border co-operation has been enhanced, while more and better facilities have been provided for tourism. Details of all these matters are set out in the review document that has been circulated to the joint committee.

The NDP-CSF has played a central role in developing competitiveness in the regions. Improved access to markets, better ICT, more effective investment in infrastructure, better training and development, improved adaptability of the labour force, which are all sub-elements of the NDP-CSF, have contributed to strengthening competitiveness at local and regional levels. The NDP-CSF has also played an important role in the convergence of the regions. Economic development in all countries, including Ireland, invariably occurs at a different pace in different regions. The rate and location of regional economic development reflect many different factors, some of which can be directly influenced by Government policy, and some of which reflect the inherent characteristics and potential of different regions, while others reflect the natural growth of the private sector.

Regional economic development can also have a close relationship with population distribution. Strong clusters of population can, in themselves, be a driver for regional development, while in turn being the result of economic expansion in the related regions. The regions of Ireland have enjoyed strong economic and social progress over recent years. Population decline has been halted and reversed. Employment has increased significantly whilst unemployment has been reduced to low levels by historic and EU standards. The NDP-CSF has seen a major enhancement of regional infrastructure throughout the country. The gaps between Irish regions and their EU counterparts have been reduced and in some cases eliminated. Some parts of Ireland are, in terms of economic activity, in the first rank of the European Union.

In a recent paper entitled, Labour Market Adjustments in the Irish Regions 1988-2005, Professor Brendan Walsh of UCD reviewed the comparative performance of the Irish NUTS III regions in terms of unemployment rates, labour force participation, population trends and per capita incomes, particularly over the Celtic tiger period. He found that regional disparities had diminished under these indicators. In the most recent data published by the CSO for 2004, the disposable income gap between the BMW and south and east regions had narrowed again. The BMW region was only 6.8% below the State average at that time. Gross value-added figures need to be evaluated cautiously, given the high proportion of foreign firms in the economy. The ESRI, in the ex-ante evaluation of investment priorities published for the NDP in 2006, stated that:

While gross value added, GVA, is a particularly useful variable in most countries, in Ireland one has to be more cautious in interpreting it. The high proportion of foreign firms in the Irish economy, which due to the relatively low corporation tax rates prefer to declare profits in Ireland rather than other countries, implies that GVA is artificially expanded.

The ESRI further stated:

Given the drawback of the GVA measure it is also useful to consider direct personal income measures. The relative differences are smaller for income compared to GVA. This reflects the fact that income is measured where the persons who earn it live, while GVA is measured where it is produced. Thus commuting flows imply that income flows out of the regions with the higher output. Another reason why the absolute differences are smaller is that the social welfare system and other subsidies (e.g. agriculture subsidies) are responsible for redistribution to the poorer regions. Overall there appears to be convergence across regions regarding income.

This point is best highlighted by the fact that County Kerry with one of the lowest disposable income levels in Ireland is in the south-west regional area, which has the highest GVA per capita in Ireland.

Cork plays a significant part in that.

Mr. Casey

Yes. If personal income levels in the two regions based on the figures published by the CSO for 2004 are examined, we see that for the BMW region total income levels have increased from 88.4% of the State average in 1999 to 92.3% in 2004, while in the south and east, they have decreased from 104.1% of the State average in 1999 to 102.8% in 2004.

Regional development is a core feature of the new National Development Plan 2007-13 launched by the Government last January. The regional development strategy set out in the plan will give a major impetus to the implementation of the 2002 national spatial strategy, although investment under the previous plan was also reflective of and consistent with the NSS. With the regional planning guidelines adopted, the NDP provides the specifics in terms of programmes and resources to further implement the vision of the spatial strategy. NDP investment will help all regions to reach their potential. Lopsided economic growth which sees the capital and its hinterland as the primary driver of all activity is not in anybody's interests, not least the interests of the people of Dublin and its surrounding counties. Balanced regional development is a precondition to sustainable national development.

While recognising the importance of maintaining Dublin as Ireland's international gateway, the plan sets out an investment strategy for the development of the other gateways with a view to promoting better balance in economic development. This approach is about a better quality of life for citizens in all regions including the greater Dublin area. The plan sets out investment priorities in each of these gateway areas. This investment will be complemented by appropriate planning and land use strategies to maximise the sustainable impact of these and other investments. In this way, the regional development strategy will complement the goal of environmental sustainability. National development planning is a process and the National Development Plan 2007-13, involving an investment of €184 billion, will continue to maintain and enhance national competitiveness and close the remaining infrastructure gaps, while at the same time providing a better quality of life for all our citizens.

I will briefly comment on the report. A complete picture of expenditure in both regions, over the lifetime of the NDP-CSF, will not be available until the full year expenditure data for 2006 is analysed and reported at the June 2007 meeting of the NDP-CSF monitoring committee and when the co-funded measures under the NDP achieve their full entitlement to Structural Funds by the end of 2008, the timetable set out in the EU regulations. The latest figures reported to the Department indicate that €15 billion or 83% of the total original forecast and more than €13 billion or 93% of forecast Exchequer and EU expenditure had been invested in the BMW region by the end of 2006. This is a good implementation rate in view of the slow start up in some areas at the beginning of the programme, the relatively disappointing response in certain demand-led schemes, the impact of the slowdown in economic activity in 2000-02, the outbreak of foot and mouth disease and a lower than anticipated private sector involvement.

By the end of the programming period, it is expected that €16 billion or 88% of forecast will have been invested in the BMW region. Some €14 billion of Exchequer and EU money or 95% of forecast is included in this figure which means the original NDP-CSF forecast will largely be met. All demands for Exchequer expenditure are being met in full. The main difficulties in expenditure in the region are a large demand-led component that did not materialise and a lower than expected private sector involvement rather than a lack of Exchequer commitment.

The designation of Ireland into two NUTS II regions in 1999 allowed Ireland to maximise the available EU Structural Funds for the 2000-06 community support framework. Since that time, regional development policy in Ireland has, however, moved from this two-region approach to the gateway and hub model outlined in the national spatial strategy. The NDP 2007-2013 builds on this model rather than the two-region approach. I would also like to clarify the references to technical assistance spending levels in the operational programmes. Technical assistance is funding available to the managing authority of an operational programme to assist with the administration, evaluation, monitoring and information and communication of the operational programmes and is not designated to provide funding for ICT or other type infrastructure to industry or commerce. We can write to the committee clarifying this and some other issues should the committee feel this would prove useful.

The mid-term evaluation of the NDP-CSF carried out by the ESRI reinforces the investment priorities chosen by Government under the NDP-CSF 2000-06. Its key findings are that the NDP/CSF "will have a sustainable positive effect on competitiveness and the productive capacity of the economy in the long-term" and in the long run the level of GNP will be approximately 3% higher at that time. Furthermore, the ESRI in its ex-ante assessment of investment priorities for NDP 2007-2013 concludes that, “The current NDP (NDP/CSF 2000-2006) has greatly enhanced the economic and social infrastructure of the State with major benefits to economic development throughout all regions”, including the BMW. While there has not been equalisation between the two regions, convergence in living standards as measured by disposable incomes, settlement patterns as indicated by the 2006 census data and unemployment data, have all shown recent convergence trends. I thank committee members for their attention and if there are any questions or points of clarification, I am happy to take them.

I thank Mr. Casey for his comprehensive overview of the plan, which will be of enormous assistance to members. Is the BMW region in a transition phase between now and 2013?

Mr. Casey

Between 2007 and 2013, the BMW region will receive additional funding under EU Structural Funds for a transition phasing-in period. In the previous round, 2000-06, the region qualified for Objective One funding, which was higher, but because it no longer qualifies for such funding due to economic growth and other improvements, it qualifies for phasing-in additional moneys. That gives the region a top-up, which must be spent in the first three years of the next round. Under the breakdown for the 2007-13 period for EU Structural Funds, the BMW region will receive €458 million and the south and east region will receive €292 million. Half of the €458 million will be spent under the ERDF and the other half will be spent under the ESF.

Will Mr. Casey forward a paper on that to members so we will have information for those who are interested? Many of us represent areas in the BMW region and we would like to motivate private sector interests who could avail of the funding.

I welcome the officials to the meeting. I am sure they are independent people but I am under the impression they are trying to put their best foot forward.

I acknowledge the positive indicators but there are still a number of major regional imbalances between the two Irish regions and the national development plan has yet to redress this imbalance and remedy the major deficits still evident in the BMW region. For example, when the BMW operational programmes are taken together, the expenditure has only reached 65% of the revised forecast. That cannot be a healthy figure by any standards. These are the stark statistics which are noted daily by people in the BMW region. They realise the poor quality of infrastructure with which they are trying to cope. The expenditure on national roads in the BMW region is only 74% of forecast whereas the spend was 120% in the south and east region. Public transport and national roads are critical to any region. Only 55% of the forecast spend has been expended in the BMW region compared with 107% in the south and east region. Those comparisons are very stark and they bring home the message clearly.

Mr. Casey said the NDP expenditure can spill over into 2008. I accept this but the problem is we will arrive at the end of 2008 and that is not the time to find out there has been under-expenditure in the BMW region. The game is over at that stage and there is no way we can bring about any better balance into the spending between the south and east region and the BMW region.

The report stated that economic developments occur at different speeds, even within countries. This is exactly the point I am making. The BMW region is developing at a slower rate than the rest of the country. The report highlights exactly what we are trying to highlight, that development is taking place too slowly in the BMW region. This is the reason we need to have positive discrimination towards the BMW region. We have been discriminated against and this must be addressed now to make up for the sins of the past before proceeding into the future.

I ask Mr. Casey to respond on the points made by Deputy McHugh who prepared a report for the committee and spent a lot of time preparing statistical data which he has presented with his submission. I compliment Deputy McHugh on the professional presentation in his report.

Mr. Casey

The figure of 65% referred to by Deputy McHugh covers part of the expenditure in the BMW region but does not give the full picture. This is a figure for one of the operational programmes that make up the total spend in the BMW region. There are seven operational programmes under the National Development Plan 2000-2006. The programme specific to the BMW region is one of the seven. Two of the remaining seven — the economic and social infrastructure operational programme and the human resources programme — account for 80% of the spending. Moneys being expended on these programmes are also spent in the BMW region. Our figures of the total spend and impact of the NDP-CSF on the BMW region include the full amount of money that has been spent on the region. Our figures indicate that in total, almost €16 billion is expected to be spent in the region by the end of the programming period which is the end of 2008. This spend is considerably higher than the 67% return.

With regard to the specific operational programme referred to by Deputy McHugh, the slow start of spending is an important factor. The report we prepared for the Joint Committee on Finance and the Public Service contains a useful graph which indicates the slow start and the fact that expenditure has almost doubled in the BMW region under that operational programme from 2000 up to 2005-06.

I refer to some highlights from the report. Expenditure rose from €1.4 billion in 2000 to €2.4 billion in 2005. A similar trend emerges in transport expenditure. The national roads programme invested €1.5 billion over the period 2000 to 2005. It was €1.8 billion in 2000 and increased to €4 billion in 2005. Expenditure programmes start slowly and double towards the end of the period. Our expectation is that the figures available to the monitoring committees at the end of this month and the beginning of next month will show a similar pattern of high levels of expenditure to those identified in 2004 and 2005 and which were maintained in 2006, and some extra moneys that fall to be considered will be reflected in 2007 and 2008, bringing the level of expenditure in the BMW region to a higher amount. I will ask Mr. Nolan to comment about the period 2007 to 2013.

I will make some general points about the next national development plan and how it will contribute to and impact upon the BMW region. The Government adopted the national spatial strategy in 2002 which identified nine gateways as being the key nodal points for investment to deliver regional development in the future. Five of those gateways are in the BMW region — the Letterkenny-Derry gateway, the Sligo gateway, the Dundalk gateway, the Galway gateway and the midlands gateway. Those five gateways are also complemented in the spatial strategy by five connecting hubs which are Ballina, Castlebar, Tuam, Cavan and Monaghan. In the regional development chapter of the plan launched by the Government in January, specific investment is allocated to each of those five gateways, especially in the area of infrastructure, and this is designed to enhance their economic competitiveness.

The regional development dimension to the plan is structured around the gateways and hubs and how they link into the other towns and surrounding rural areas. Deputy McHugh referred to infrastructure in the BMW region. The national development plan was not intended merely as a list of projects but rather as a planning framework for public agencies whereby they would be given set allocations within which to work.

It is fair to mention a few key significant projects that will be delivered in the BMW region over the next seven years. The major interurban routes will be completed to Galway and road connections to the north west will be improved. In co-operation with the authorities in Northern Ireland, the Government has committed itself to create a dual carriageway connection to Derry and Letterkenny. There will be significant improvements in all intercity rail routes going through the BMW region and there is a commitment to develop the western rail corridor over the next seven years.

It is fair to note the benefits of greater North-South co-operation and an all-island approach to development opportunities and challenges. The restored Executive in the North will begin in May and it is a Government priority to work with the restored Executive on infrastructural issues and other public service delivery to maximise common benefits to mutual advantage.

I note the significant commitment in the national development plan to developing the rural economy in which agriculture will playa significant part. There is also a significant commitment to develop broadband, tourism and enterprisedevelopment in rural areas which would be of particular assistance to the BMW region over the next seven years.

I thank Mr. Nolan. Deputy McHugh may wish to speak as Tuam was mentioned.

Tuam represents a clear example of how much of the talk about facts, figures, projections, etc. is rubbish. The national spatial strategy is not underpinning the national development plan. Tuam is the only hub town in County Galway and happens to be in my constituency.

It is also in Deputy Callanan's constituency.

Some time ago the Minister for Communications, Marine and Natural Resources announced that five towns in my constituency would get a metropolitan area network to provide infrastructure for broadband. The only town designated as a hub town in my constituency was the one that did not get a MAN, which indicates the level to which the national spatial strategy determines what happens in the national development plan. While it is fine to quote figures and put a gloss on the matter, we must deal with the reality locally which is a tragedy. The witnesses are professionals and have a job to do. However, I just get annoyed that this kind of thing takes place.

Mr. Nolan instanced the road to Galway as an example of investment in the BMW region. However, that road will be delivered four or five years late, which is another example of the deficit in the BMW region. He mentioned the western rail corridor. I admit some progress has been made and work has started on the Ennis to Athenry section. However, north from Athenry progress has been slower. It is scheduled to reach Tuam by 2011. All that is required is to lay a track and open the damn thing. We do not need to talk about it and have conferences in Claremorris every six months. We need action and we are not getting it on the western rail corridor. It will reach Claremorris by 2014 or 2016 and will never reach Collooney.

Mr. Nolan mentioned agriculture and rural development. Under that heading expenditure was only 36% of forecast. If it is to shine in the future, it damn well needs to shine.

As we are on a constituency matter, I will call Deputy Callanan ahead of Deputy Hogan.

I am not from the west.

I welcome the delegation from the Department of Finance. While the BMW spend was slow to get started, it is really happening now. I spent 21 years as a member of Galway County Council and I never thought I would see a dual carriageway from Galway to Dublin. It was always talked about, but now it is happening. I join the dual carriageway at Tyrrellspass and by Easter I will be able to join it at Kilbeggan. From there on it will enter my constituency.

Progress is also happening in other constituencies.

Great progress is now taking place on roads in the BMW area. Contracts for work on the N6 from Ballinasloe to Athlone will be signed shortly. The Galway outer road is being brought forward. We will have the so-called Atlantic corridor from Limerick to Sligo and beyond. We will also have the western rail corridor and while it will be slow to reach some parts, it has started and exists. Many people thought the moss would never be scraped off the tracks. I am delighted it is happening with work already started from Ennis to Athenry. New stations will be built along the way. I understand there will be a new station in Oranmore and we will have commuter trains from Athenry and Ballinasloe into Galway. I hope we will have also hourly trains to Dublin. Great progress on transport is being made in the west at this stage. I understand Deputy McHugh's justifiable frustration regarding Tuam. That area needs development and needs to be brought on stream.

Can the Deputy use his influence to help Deputy McHugh?

I am not saying Deputy McHugh does not have influence.

He is a cousin.

He is a first cousin.

We will not get into politics. We always work together.

We will keep politics out of it.

I hope the investment will continue. While I have only highlighted the transport area, other areas are affected. While we were lucky to get some employment in Ballinasloe, other areas in the county need employment. Galway city has high employment. Two thirds of my constituents work in either Galway or Athlone. We would like to see more employment in towns, especially Tuam. In Athenry, as Teagasc land has been designated for industry, it will create employment possibilities, as has happened already in Oranmore. We would like to see more employment opportunities in Loughrea, Gort and Ballinasloe. Great work is being done and I look forward to the implementation of the development plan up to 2013. If expenditure in the BMW area continues at the rate we have seen in the past two years, we can look forward to a good future.

The foot and mouth disease issue slowed things down at the start of the period.

Mr. Casey

I do not know why Tuam is not one of the towns in which MANs are being rolled out. I understand the towns in the wider Galway region that were selected were Furbo, Clifden, Ballinasloe and Athenry. We can ask the Department and write to the committee with the information.

The ESB carried out an experiment to provide broadband through a different means. The experiment failed and although this was documented some time ago, nothing has yet happened. I do not want to get bogged down in Tuam. We are talking about the bigger picture.

It is important to the Deputy.

Yes. Ballinasloe is also important.

Mr. Casey

We acknowledge that expenditure on agriculture in BMW has been slower, as has been the case in the south and east region. Part of this relates to the 2001 outbreak of foot and mouth disease which led to a slowdown of certain demand-led schemes. There has been a slowdown in demand from the agriculture sector for applications for farm waste management grants. This will reported on in coming weeks when we have the meeting of the BMW regional assembly in early May. We will have further information at that time on agriculture expenditure. Grant rates have now improved and demand has increased substantially. On-farm investment schemes arising from those increased grant rates are now on offer. A policy of certainty provided by decoupling and the introduction of the nitrates action plan have both led to new schemes. There has been an increase in the number of applications and the applicants qualify for EU support. We expect the measure will result in an increase but I do not yet have information on its extent. However, the shortfall is not expected to be as large as the one we envisaged six months to a year ago.

That is more good news for farming people.

Mr. Casey

Yes. We will have further information. I accept there is frustration over certain projects that did not proceed but we emphasise that the planning process associated with the national development plan is a long-term process. Certain steps were not taken for certain reasons in respect of the 2000-06 programme, but we now have another plan that is picking up on several of the investment shortfalls. The overall, longer-term investment process will deal with several of the issues that are causing frustration. This is part of the evolution of our procedure for addressing investment issues in recent times. Roads comprise a good example in that commuters are already benefiting from improvements on foot of the opening of parts of motorways and dual carriageways, although they will not be fully completed until 2009 or 2010.

I apologise for delaying Deputy Hogan, the spokesperson for his party and perhaps a leader in waiting.

I understand the Galway County Council meeting must be held first.

Deputy McHugh did prepare the report.

I am delighted an additional 50% is being invested in the BMW region compared with where I live, the south and east region. It is great to hear that.

I hope the other two Deputies appreciate that.

I hope the lads in the south-east will hear about this. I come from an area that still depends largely on the weather. The weather is not always great and, therefore, we must try to look after the south-east as well. Will Mr. Nolan provide a sub-regional breakdown of the allocation of money over the periods of the previous development plan and the current one? It is all very well to have national figures but when I look at the south and east region, the old regional development authority region, I note the influence of Cork. Waterford has gateway status and Kilkenny has hub status. How much money was spent on the gateways nationally and how much was spent in the hubs under the previous plan, notwithstanding that the national spatial strategy came into being in 2002? It would be useful to know the progress we are making in rolling out national policy. This would shed light on the nitty gritty and this might help overcome some of Deputy McHugh's frustration.

Will Mr. Casey state whether the Government can exercise the authority to allocate finance to a blackspot or sub-region? We are often told this is part of the national development plan and part of the bigger picture, but I know of blackspots that certainly do not seem to have improved infrastructurally, economically or socially during the term of the last plan. Towns have an influence not only in the areas they cover but also more broadly. They can have an influence in a couple of counties. I am interested in hearing the delegates' views on this.

The take-up by the private sector is disappointing in terms of meeting the objectives of the previous plan, bearing in mind the strong economic growth, the amount of disposable money available to the private sector and the high level of confidence because of low interest rates. What is the explanation for this?

One of the major problems associated with regional development has been implementation and the vehicle therefor. For example, the companies of the Shannon Free Zone can promote their patch exclusively. We do not have a similar type of vehicle in any other part of the country. The Western Development Commission is effectively a talking shop and has no powers of implementation. One is depending on national Government agencies to come together to create a plan for implementation. They are all fighting turf wars internally and trying to get as much money as they can for themselves. They have no overall implementation strategy, unlike Shannon Development, which is a stand-alone entity.

Participation in third level education presents a great problem in the south-east. Everyone must leave the area to do degree courses in the humanities and specialist courses. Good progress has been made in the institutes of technology in Waterford and Carlow, but one is aware of the ongoing debate on university status. The figures speak for themselves and indicate the south-east has one of the lowest levels of third level participation in the country. This is understandable when there is no development entity in the region. What is the position on this matter? It has featured already during two general election campaigns and we do not want it to feature during another. I expect to hear good news in this regard today.

There is a strategic development zone in Belview in south Kilkenny-Waterford, incorporating the port at Waterford. The planning authority for the port of Waterford is in County Kilkenny. Certain parties wanted to remove Kilkenny's responsibility in this regard recently but they failed. The level of infrastructural development in a strategic development zone, such as that in Belview, was very low, especially in respect of energy providers, including the ESB and Bord Gáis. For 15 years, the authorities of the zone have sought the infrastructure necessary to allow development to take place to take advantage of the investment made in the port of Waterford and therefore use much of the land now zoned for industrial use in County Kilkenny. Have the delegates any specific idea of the infrastructural spend and the timescale? If they do not have figures to hand, they can send them to the committee afterwards. I am very interested in the timescales for rolling out developments.

That is very important.

Mr. Casey

I will start with the last point. I do not have the relevant information on the strategic development zone but will obtain it for the Deputy and forward it to the committee. On the question of a university for the south-east, I do not have information but I am aware of the debate in the media. We are not party to the decision-making process but we will forward information to the committee.

I will add to Deputy Hogan's disappointment by saying I do not have information to hand on expenditure on the gateways and hubs in the south and east region. However, we can obtain information on expenditure under the previous plan for the Deputy and make it available to the committee. I have information on the different operational programmes but it is not broken down such as to address gateways and hubs.

How long will it take to obtain that information?

Mr. Casey

The different operational programmes are managed by different Departments so we would need to contact them to see whether they have the breakdown pertaining to gateways and hubs. It may not be available in the desired format in that the information has been compiled on a programme basis. We will inquire and let the committee know early if the information is available, and if so, we will be happy to provide it. The NDP website gives a county by county breakdown of expenditure by the 2000-2006 NDP community support framework. The different measures are identified with a breakdown of where particular projects have taken place. That may be of assistance in the interim.

The Departments have lead roles in addressing sub-regional social inclusion and blackspot issues depending on whether they involve unemployment, social deprivation or whatever. Part of the RAPID programme is involved to address some of these issues. I am not sure that elements of the operational programmes in the previous NDP considered blackspots per se but RAPID examined areas of social disadvantage and tried to distribute money to different Departments to improve those areas. This is a whole-of-Government approach to focusing expenditure from different Departments on certain areas.

Does a national Government, notwithstanding the approvals required for a national development plan from the European Commission, have the authority to deal with issues on a sub-regional basis and with blackspot problems without having to get permission from the European Commission?

Mr. Casey

It would not have to get permission from the European Commission to develop such approaches with its own money but would if EU funding were involved. The programme complements are designed at the beginning of the programme and the Commission has clear rules on changing the components of the programmes. Permission is required for any movement of EU funding.

There is a great deal of interest in inspections for the waste management grant system following the improvement in the grant assistance of 60% in many cases. To get a person from the Department of Agriculture and Food to carry out an inspection, however, is a problem. While I appreciate that is not Mr. Casey's problem, he might pass on our good wishes to the Department. Notwithstanding a public service embargo in certain Departments, additional staff are needed in the Department of Agriculture and Food offices to carry out these inspections which are urgent because there is a timescale involved in drawing down these grants. Some Departments are interviewing many people depending on whether decentralisation is happening at local level.

Mr. Casey

We would also be interested in seeing those grants drawn down to claim.

They will not be drawn down if the Department of Agriculture and Food continues to operate as it is. There is a delay of up to 12 months to carry out an inspection before work can be allowed to commence. That is unacceptable. Something must be done about the agricultural offices. There are only two inspectors for County Kilkenny.

Mr. Casey


Over the past ten to 15 years, institutes of technology have been the new engine for substantially transforming rural Ireland. This committee, which has worked hard for the five years of the 29th Dáil, would like to see all the co-operation and financial assistance possible being given to meaningful extensions of the institutes in areas such as the south-east, County Offaly, where there is low educational penetration, and Mullingar, where I live and which I represent. There should be a tie-in with IDA Ireland which has many valuable strategic sites in these areas. Everyone can criticise or make valid points about what should be done but how to do something about it is a different ball game.

There are four senior members of the Department of Finance present who have a great deal of experience and vision and are of great assistance to Ireland plc. I do not say that in a patronising way. Over the next 20 years, the institutes, the Departments of Finance and Enterprise, Trade and Employment, IDA Ireland and Enterprise Ireland must generate jobs and help small family-owned and other businesses. I have had the pleasure and privilege of being taken to China, India, South Africa and the Gulf states by the Minister for Enterprise, Trade and Employment and the Taoiseach to see what has happened in those areas over the past five years.

The institutes will drive the spatial strategy. For example, if the institute does not become the engine to drive the proposals made by the Department of Finance for the midlands, Athlone, Tullamore and Mullingar, ATM, area under the aegis of the two local authorities, those proposals will not become a reality. At one of the final meetings of this committee, I am concerned that the institutes would be given the wherewithal to expand into other regions and become the engines for Tuam, Mullingar, Kilkenny, Ballinasloe, or wherever. Their work in Carlow, Athlone, Letterkenny and Sligo has been a dream come true for those towns. We want to see this happen in Tullamore and Mullingar. According to the spatial strategy, these towns need to increase their population from approximately 20,000 to 50,000 each to have a combined critical mass of 150,000 by 2020.

Science must be the driver and research and development, for which the 2007 budget provides €273 million, is important. If we do not have it, we must choose a different route because 2013 is looming and we must meet the challenges of our counterparts in India, China and other regions. It is good to educate people in these countries and teach them English but we must look after the Irish families and children of tomorrow. We must find a niche that will keep us ahead of Europe, as we have been over the past 20 years. We have been exemplary and everywhere we go outside the country, people ask how we did it. We do not congratulate ourselves half enough. We should follow the example of our counterparts in America, who from time to time talk up their achievements rather than talking them down. It may simply be the case that the media, and those who own them, have the idea that one must sell bad news, since the public will not buy good news. However, I do not accept that; I believe the public will buy good news. There should be a 15-minute good news slot every day on television and radio to tell the Irish people of our achievements.

On behalf of Fianna Fáil—

Some are part of the family some of the time, and others all of the time.

I am sorry. I should not have said anything.

Deputy McHugh has been a treasured first cousin.

On a very serious note, challenges face this committee of the 30th Oireachtas. We did not have the opportunity when we were starting, but the transformation we have seen in our country because of the good work done by the Government, particularly by the Departments of Finance and Enterprise, Trade and Employment, has been unprecedented. I congratulate them on all that they are doing for the country.

However, one must bear in mind that, in some way, political parties should dedicate part of their manifesto to the issue of outreach by the institutes of technology. As a self-employed person from the business world, I know that they could make a substantial and meaningful contribution to at least another ten or 15 towns with populations of 20,000. They too could become engines of wealth creation.

No one wishes to travel in a bus for 40 or 50 miles to school every morning at 6.30 a.m. or 6.45 a.m., arriving at an institute and returning home in the evening. The IDA has all the sites. They are available, being owned by the Government, and the stroke of a pen could make things happen. The IDA is building a business centre of 20,000 sq. ft. in Mullingar, and there is to be another of 25,000 sq. ft. I know that Deputy Nolan could relate a similar story regarding Carlow. Those centres of excellence and quality could be used for scientific research and development through the institutes. My suggestion concerns roles, where we could go, and how we could make things happen fairly quickly.

At the end of my five-year term as Chairman, I thank members for giving me this opportunity.

The Chairman is welcome, since we cannot stop him.

Not everyone will have the 6 p.m. and 9 p.m. news available to them like other frontbenchers.

Mr. Casey

The Chairman has made a valid point concerning the role of the institutes of technology and their interaction with the business and education sectors, and that is recognised by the two lead Departments of Education and Science and Enterprise, Trade and Employment. The seven-year science and technology strategy announced recently acknowledges their role, and over its life we will see that evolve as they begin to develop better links with universities and compete more effectively for strategic innovation funds. They will also develop better links with industry that begin to translate ideas and innovations into jobs.

Innovation and the knowledge economy are among our spending areas for the next round of Structural Funds, which we will receive from 2007 to 2013. One issue identified is links between the institutes of technology and business.

I thank Mr. Casey.

Regarding projects listed under the NDP and Transport 21, target dates have been given for completion. Is that the full picture, or do they all depend on cost-benefit analyses being carried out?

Mr. Casey

My understanding—

I ask in particular regarding the western rail corridor. We have been given target dates for completion. Does that still depend on a cost-benefit analysis being carried out?

A cost-benefit analysis must be carried out for any major project, including the western rail corridor. In that regard I believe the cost-benefit analysis has already been conducted and a commitment made in Transport 21 to complete the link from Ennis to Claremorris within its timespan. That is certainly the basis on which we are currently operating. As part of the NDP's monitoring and reporting arrangements, we will keep an eye on progress being made on such projects. We will make an annual report to the Oireachtas, both on specific largescale projects and generally.

Is Mr. Nolan saying the western rail corridor does not have to go through any more hoops?

No, since one would have to follow up that question directly with the Department of Transport. However, subject to correction—

The Minister did not explicitly state that it would be subject to anything, but when the funding was made available for the Athenry to Ennis section, it was also allocated for the Athenry to Tuam section, subject to a business plan being presented.

I believe that it is on three rails. We are currently going through it from Athlone to Mullingar.

Mr. Casey

My understanding is that projects worth over €30 million must have a cost-benefit analysis conducted. Projects involving phasing — inputs over kilometres or whatever — must have such an analysis carried out on the total project. In other words, projects are not realised through piecemeal investment decisions. We can certainly check the facts on the western rail corridor.

Does the NTMA conduct such cost-benefit analyses of projects worth over €30 million?

Mr. Casey

It depends on the nature of the project and the timescale. The Department would have lead responsibility for undertaking such analysis, in consultation with the Department of Finance.

Perhaps Mr. Casey might get back to the clerk on that, and we will notify members accordingly.

On behalf of the committee, I thank Mr. Casey, Mr. Nolan, Mr. Palmer and Mr. Kelly for attending. I regret we did not have such a meeting annually during the committee's life. However, if the electorate so wishes, whoever is returned may take that up. We have heard a mine of information, and I thank the witnesses for attending.

The joint committee adjourned at 10.50 a.m. sine die.