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JOINT COMMITTEE ON EUROPEAN AFFAIRS debate -
Wednesday, 17 Dec 2003

Vol. 1 No. 57

Regional Development in a European Context: Presentation.

We will hear presentations on regional development in a European context from Bishop Thomas Finnegan, retired Bishop of Killala; Mr. Sean Hannick, chairman of the Council for the West; Ms Lisa McAllister, chief executive officer of the Western Development Commission and Dr. John Sweeney, joint chairman of the East-West Alliance. I welcome the visitors who are present to address the meeting on regional issues, which include Objective One status, tax designation, the Lisbon agenda and congestion issues. The committee visited Castlebar on 31 January last and held a meeting with representatives of regional development groups, including Ms McAllister who addressed the meeting and responded to members' questions. That meeting, which proved very interesting, was the first of our meetings outside Dublin, of which we try to hold four each year. Now 11 months later we have an opportunity to revisit this topic.

Mr. Sean Hannick

I will give the background to the meeting and Bishop Finnegan will give the background to the Council for the West. We thank the Chairman and members for giving us the opportunity to address this committee. We were heartened by its comments in January at the meeting in Castlebar and we decided to take the issue somewhat further to address the concerns that are common to both of us. Both groups felt that they were working at opposite ends of the same problem.

Bishop Thomas Finnegan

The Council for the West, a voluntary independent non-political body, monitors and reports on the socio-economic state of the west. It is also a lobby group promoting the development of the west and it played a major part in the campaign for Objective One status that resulted in the BMW region.

In 1987 the western Bishops issued a pastoral letter on emigration considering all aspects of the problem that was then at a very high level. Levels of unemployment and emigration rose all over the west between 1987 and 1990, particularly in the rural areas. Some of those who suffered as a result asked the Bishops to intervene. For example, in south County Galway there were requests to Bishop Kirby to intervene in the plight of local farmers. In north County Mayo, the local priests came to me concerned at the high levels of emigration. In 1991, a major conference was organised in Galway city to guide the approach for the subsequent campaign. Mr. John Hume, MEP, advised us when seeking EU funding for a socio-economic study of the west of Ireland which was put in train in 1992.

As a result of the conference, the bishops established Developing the West Together and in every diocese core groups were launched that fed into this socio-economic survey. European funding was received for the socio-economic study of the west of Ireland. In 1994, the study's report, Crusade for Survival, was published. From this, the Government set up a task force to study this document and to make recommendations on an action plan.

The principal outcomes were the establishment of the Council for the West by the Bishops that is a voluntary, independent and non-political body. Another outcome was the establishment of the Western Development Commission by the Government.

Ms Lisa McAllister

Tá an áthas orm a bheith anseo inniu. I thank the committee for inviting me to make a presentation along with the Council of the West and the East West Alliance.

The Chairman referred to the presentation in Castlebar, County Mayo where the first targets were drawn up. In that presentation, on balanced regional development, I posed a number of questions. After 30 years of Objective One status, will the west of Ireland be able to compete with other regions, not just in Ireland, but also in an expanded Europe and other regions throughout the world? We are not ready to compete in a single market. We will not compete seamlessly as if we are one market with other regions throughout an expanded Europe. Is this being achieved through the national development plan, with its key objective of achieving regional balance? The answer was clear because the indicators show that. Despite a commitment to balanced regional development, the divergence between the two regions in Ireland is wider than ever. The mid-term review of the national development plan allowed Ireland's poor performance in attempting some regional balance to be addressed. As the real challenge for us is that of change, I asked what changes would come about after the mid-term review to make a significant difference to the outcome of the national development plan in achieving balanced regional development.

The results of the mid-term review have been published and I will speak about the key challenges facing the west of Ireland, the changing nature of regional development and the urgency of exploiting Objective One status, the position on transportation infrastructure and the role of the mid-term review in bringing about change. I am aware that members of this committee are familiar with the Lisbon agenda that set the strategic goal for the EU for the next decade. Its objective states:

To become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth and more and better jobs and greater social cohesion by 2010.

This must be put into a west of Ireland context. Can the region be the most competitive and dynamic knowledge-based economy in the world? Businesses in the west of Ireland trade in an increasingly fast-paced, globally networked economy where the rules of competition and business location are fast changing. The challenges facing the west of Ireland are clear. Will traditional manufacturing and emerging high-tech and white collar services industries in the west of Ireland be able to compete in Ireland, the EU and worldwide in this new knowledge-based, speed-driven marketplace? Will the companies in the west diversify, into "new economy" high-tech, research and development and information-intensive business services sectors? To respond successfully to these challenges in the region and create the conditions for industrial competitiveness, job creation and business location, the growing importance of knowledge, speed, agility and accessibility must be addressed.

The Western Development Commission has highlighted the importance of access infrastructure to the western region. Accelerated delivery of infrastructure is a key driver of the economy and if implemented would have a positive impact on the west of Ireland. It is a well-established fact that transportation infrastructure has always shaped business location and commercial development. Access infrastructure along with fast, competitive telecommunication services are considered essential infrastructure in today's world. The urgency with which air, road and rail infrastructure in the western region needs to be completed cannot be overstated.

To date, the current and previous national development plans, driven by EU Structural Funds have seen the delivery of access infrastructure in Ireland and, more particularly, in the southern and eastern regions. The average GDP in Ireland has risen to 118% of the EU 15 member states in 2001. That is a phenomenal rise from approximately 68% in 1988. The GDP per capita in the new member states is around 39% of the EU average. In a European Union of 25 member states, Ireland is likely to rank as one of the richest countries and is certain not to qualify for Objective One status after 2006. Ireland has three years in which to exploit the advantages of being in an Objective One area. This opportunity must be maximised by making full use of Objective One status over the period 2004 to 2006. This means pushing ahead with the expenditure identified in the national development plan, which allows higher levels of state-aid support into projects under the various programmes.

Objective One status is not only about higher amounts of Structural Funds for projects, it also enables higher levels of aid from the national exchequer to be offered to projects under state aid guidelines for Objective One areas. Is this opportunity being exploited? For example, in the 2002 budget, money was made available for tourism marketing. I am aware of one community group in a low-populated rural area who applied to market its local facilities. The group was approved for 50% co-financing but it could not raise the matching 50%. The other 75% could have been offered but it was not. These are opportunities that are being missed. It is an example of why Objective One status is given to the region because in areas such as this, groups do not have the capability to raise the necessary co-finance and the private sector level of investment does not exist in these areas.

However, there are three years remaining to exploit this opportunity. The flexibility of the 2002 budget scheme is only available to the BMW regions so long as they have Objective One status. It should be policy across all Government spending to maximise the co-financing to projects in the BMW regions as standard for the period 2004 to 2006. An instrument such as a ministerial directive could implement such a policy. A promotion of this policy would have a positive effect on the encouragement of private sector investment in the BMW regions.

Since the introduction of structural funding support for EU regions, it has focused largely on geographic targeting. For example, Objective One regions were identified for various supports as "regions lagging behind in development." In the next round of financial supports, it is likely that a thematic approach will be taken for those areas outside of Objective One status. The committee will be familiar with this debate. Suggested themes include innovation, employment, the knowledge society, sustainable development, urban problems, improvement of competitiveness and social cohesion. Cross-border and transnational co-operation will probably continue. A thematic approach suggests a basic level of development in infrastructure, as would be envisaged for regions emerging from Objective One status. The final three years of the current NDP are essential to the delivery of basic infrastructure in the western region. That will not happen unless priority is given, along with clear, time-bound targets, to infrastructural programmes. The mid-term review revealed the very poor performance of the BMW region across the entire NDP. Of the total of €7.169 billion allocated to the BMW region at the mid stage, the spending undershoot was €1.8 billion. That is a phenomenal sum amounting to more than 25% of projected expenditure.

The performance within the NDP varied, and I do not intend to go through the performance of each programme. However, I have circulated a table showing the levels of projected and actual spending. The reasons for the under-spend vary, including a lack of clear, time-bound targets for projects in the BMW region, unsuitable measures, lack of absorptive capacity in the region for available measures, administrative delays and other unanticipated factors such as foot and mouth and the attacks of 11 September 2001.

I have set out several graphs to highlight the extent of the under-spend in some of the key industrial development programmes. The first is foreign direct investment. The second is expenditure on the indigenous industry programme, and the third is the RDTI indigenous programme. The three graphs showing projected against actual spending on the industrial programmes, foreign direct investment and indigenous RDTI show not merely the poor performance of the programmes but the substantially lower funding projected for the BMW region. The percentage of under-spend is one factor, but one must remember that the levels were considerably lower in the BMW region.

I am sorry to interrupt Ms McAllister, but it looks like we might have a vote in the Dáil. That will take a few minutes, so perhaps we might get through her presentation and then resume. It is a vote rather than a call for a quorum. We may have to stop at some point.

Ms McAllister

That means addressing the growing importance of knowledge, speed, agility and accessibility and creating conditions, inheriting a means, and providing essential infrastructure. Those are dealt with in the next section.

On the west of Ireland, which is only one part of the BMW region, if we are to examine the Lisbon agenda and think again about becoming the most competitive, dynamic, knowledge-based economy in the world capable of sustainable economic growth, accelerating spending in the BMW region is crucial for the second part of the plan. The forthcoming recommendations of the enterprise strategy group set up this year by the Tánaiste will shape future national enterprise policy and will certainly have an impact on the delivery of the second part of the NDP industrial programme. It is essential that the group address some of the serious regional disparities in job creation that are reflected in the low level of uptake regarding industrial measures in the BMW region compared with the south and east. The Western Development Commission is contributing to that process.

The spending on the economic, social and infrastructure operational programme was most worrying. We know that accessibility and speed will underpin our ability to grow and sustain growth. However, the under-spend on the roads was 69% of projected expenditure. In public transport, the figure was 51%. The Western Development Commission has recommended that clear, time-bound targets be set for the implementation of the national roads programme for the remaining three years of the NDP.

This might be a good time for a break. I am afraid that it looks like there is a vote. It will take about ten minutes, and we will resume as soon as the vote is over.

Sitting suspended 11.54 a.m. at and resumed at 12.18 p.m.

Would Ms McAllister like to continue?

Ms McAllister

I was just making the point that progress on the economic, social infrastructure operational programme was probably the most worrying of the entire national development plan. I mentioned continually accessibility and speed as factors that will underpin our ability to grow and to sustain growth. Yet, as borne out in the graphs, the expenditure on roads was just 69% of projected expenditure and on public transport, the figure was just 51%. The mid-term review process gives the opportunity to change this trend and we are recommending clear, time-bound targets be set for the implementation of the national roads programme for the remaining three years of the national development plan in the BMW region. Targets are set only for the Dublin area and the major inter-urban routes. We need to have targets on the other national roads programmes. Otherwise they tend to be perceived as having a lower priority and they slip.

Integration of transportation in the west will be key to the competitive positioning of the region. In addition to the planned expenditure there are two projects that could immediately improve the accessibility of the region outside the national development plan. Knock International Airport is the only international airport in the BMW region. It offers the region the potential for good international access. Accelerated investment in Knock International Airport in the immediate term will make a significant difference to the region.

The development of the western rail corridor is also a strategic regional project that can connect Sligo, Galway, Ennis and Limerick, along with connecting Knock International Airport to these cities and towns and to the national rail network. Both projects have regional importance and, in addition to the planned NDP expenditure, can make an immediate difference to the competitive position of the west in an economy where speed and access, along with integration of air, road and rail is expected.

The west must rise to the challenges facing it in a new and changing world economy. To respond successfully to these challenges in the west, we must create the conditions for industrial competitiveness, job creation and business location. We must address the growing importance of knowledge, speed, agility and accessibility. Critical to this is the immediate urgency of improving the issue of accessibility, road, rail and air access in the west. There are three years left of the national development plan during which the western region can benefit from Objective One status. Real change is needed in the second phase of the national development plan. Once again we recommend that the infrastructural programmes in the national development plan be completed as a matter of priority for the BMW region with clear time-bound targets set for each of the measures.

Accelerated investment in Knock International Airport and the development of integrated rail services along the western rail corridor are two projects of regional significance that can have the absorption capacity that would have an immediate impact on the regions competitive positioning. For the remaining three years as a standard policy across all Government spending, the best use should be made of Objective One status by providing the maximum allowable grant aid under State aid legislation, whether or not the money is drawn from EU Structural Funds or the Exchequer. A promotion of this policy could have a positive effect on the encouragement of private sector investment.

The final point I would make is that in the language used here there are phrases such as "the west of Ireland will trade in an increasingly fast-paced global network where rules of competition are fast changing". We talk about a "speed-driven marketplace". This is type of language is not my language. This is the language of the experts in these areas. I wish to stress the urgency of increasing the expenditure on infrastructure over the next three years of the NDP.

Thank you. We will have some questions now and perhaps some of the other members of the delegation can come in and add to the contributions made. I am fearful that there might be another vote In the Dáil so perhaps we should try to get into an exchange. There are two questions I would like to ask. Mention was made of Knock Airport and the Sligo-Limerick rail line. What view do the Western Development Commission and the Council for the West have of the Corrib Gas Field? It was stated that the under-spend on the roads programme was 69% of projected expenditure, and on public transport 51%. What does the delegation consider to be the main reasons for that?

Ms McAllister

I will speak from the point of view of the Western Development Commission. The Council for the West may want to answer for itself. On the first question, I did not mention the gas or energy infrastructure, as it does not, in the main, come under the NDP. We would certainly see access to gas as very important to the western region. The route of the gas pipeline is particularly important. We are aware that there is a Government commitment to bring gas from Ballina to Sligo, depending on feasibility, and this was reiterated in the national spatial strategy. We are aware that the route chosen is one directly from Ballina to Sligo, and we would like that to be reviewed, to look at strategically placing any infrastructure through central Connaught and not over the Ox mountains. There would be better value for the money if it were strategically placed through a number of developments or growth hubs. There are no opportunities in the Ox mountains for development in the future. There will not be spurs in an area that is only sparsely populated with small villages and a rural population. Gas infrastructure is necessary for the western region but it must be strategically placed so that in the future we can access spurs for development.

On the second point, the Chairman asked why, in our view, spending on public transport, on the roads programme and the rail programme is so low. The answer is clear. There were no clear time-bound targets set. They were set for the projects. The projects completed, mainly in the south and east, had targets. The major inter-urban routes had targets. The national roads around Dublin had targets. They were completed. The ones without targets were not. That is one of the critical aspects. Without targets, and it was identified in the Fitzpatrick review on the roads programme, a lower priority tends to be suggested.

When you speak of 51% and 60%, are you speaking nationally, not just regionally?

Ms McAllister

No. That is 69% in the BMW region. It is not about comparing us with the south and east. That is why I did not bring that up. The overall expenditure in the south and east is clear on the bar chart. We very much under-spent. The south and east over-spent. It is because targets were set and they were prioritised. The other projects had no targets set. They were of a much lower priority. That is why it is so important to set clear time-bound targets for the remaining part of the programme.

I am delighted to have had the opportunity of listening to this presentation. The delegation made a very compelling case. I should declare an interest, being from west Cork, which I always considered to be a part of the west. It was one of the 12 disadvantaged counties at one time. We suffer from the additional disadvantage of not being an Objective One area. I have an affinity with the west. My reaction to the presentation was that I am appalled at the figures produced. I could see problems in relation to absorption capacity in some areas and possibly lack of take-up in others. However, if we cannot use the money that is available for basic projects such as building roads, God help us.

I wish to raise a couple of questions. Figures quoted highlighted the under-spend and I understand that is to the end of December 2002. The first question is whether there is any information available as to what is happening in the current year. Has there been a better or more accelerated implementation for the current year? The second issue is that there has been much emphasis on time-bound targets. Will the delegation explain that a little more? What does that mean? How important is it from the point of view of ensuring implementation?

The third question is, what can those of us who genuinely would support the Save the West Campaign - members of this committee or Members of the Oireachtas generally - do to help?

Would Mr. Hannick like to come in at this stage?

Mr. Hannick

I can answer the Deputy's question on the percentage. This year the position has got worse. We estimate the under-spend is approximately 64%, taking account of this year's figures versus the figure of 143%. The position has got worse because the announcements made in January and February were of developments also stacked to the south and east. That figure is only an estimate but we think the under-spend is approximately 64%, which has decreased from 69%.

Why is that the case?

Mr. Hannick

There are several reasons. Some of reasons quoted were the impact of the foot and mouth crisis and the events of 11 September, reasons that seem a little crazy to us. Those events affected road developments in the early stages around that time but since then there has been plenty of time to make up the difference.

On the question of Corrib gas——

Has Mr. Hannick a view on why the position has got worse?

Mr. Hannick

It is not that anybody deliberately goes out to do down the West, but the State system is geared towards the bigger centres of population and one has to keep fighting it to get not alone what one is due but what one was promised. That is my view. Perhaps MsMcAllister has another view.

Ms McAllister

The Fitzpatrick report contains a review of the national roads programme and those projects with targets were started first. There were major projects, the major inter-urban routes, the Luas and the Port Tunnel. A vast amount of the budget was allocated to them, but many of those projects had started and needed to be completed. That is one of the main reasons we were given in terms of this year's allocation, that those projects could not be simply stopped. Those involved started them and they must continue them. We have been told that expenditure is low in the Border, midland and western regions, and the reason given to us and identified in the Fitzpatrick report was that the projects had already started and they needed to be finished.

Did they absorb the available national funding and is that the reason the money has not been allocated?

Mr. Hannick

The Minister, Deputy Brennan, indicated that the bulk of it went to three projects, the Port Tunnel, the Kildare bypass and the M50.

Despite the fact the west has Objective One status and was promised these moneys such moneys are not being allocated but absorbed into the projects mentioned.

Ms McAllister

The Fitzpatrick report identified other issues about the management of contracts and other matters. When I said "time-bound target", the Deputy asked what I meant by that. In a national development plan there is a primary priority route and a number of priority routes are selected. For example, the N4 to Sligo and the N6 to Galway, and that is it. Galway is a major inter-urban route and we will keep that separate. There is also the N17. On the question of the major inter-urban routes out of Dublin, those concerned state that these roads will be completed by a certain time and different times for them have been put down throughout the programme. The other roads were simply called priority routes.

If this money is not allocated within the balance of the NDP and the region loses its Objective One status, will the region be out in the cold at that stage?

Ms McAllister

That would mean we would lose the higher levels of support that can be pumped in across the board. The other point I made about Europe adopting a thematic approach around innovation, competitiveness and urban problems, assumes that there would be a basic level of infrastructure. We are in a vulnerable position in our efforts to avail of the new types of European support. Coming out of Objective One status, we need to have the necessary basic infrastructure in place. That is the urgency for completing such work within the next three years.

Mr. Hannick

I wish to answer two other questions. When the Chairman considers it appropriate, perhaps I can give my presentation, which will not take more than four to five minutes and it might help to further explain the position.

Deputy Jim O'Keeffe asked about what members could do to help. We think the issues involved are the opposite ends of the one problem; there is over-development in Dublin and a lack of national planning or planning in Dublin. Planning is driven by developers who buy land; obtain planning permission and proceed with development. This is happening all over the city; it is not controlled and is simply allowed to evolve. We believe that is one area we could address by working together to prevent over-development in Dublin and its surrounds and underdevelopment in our area. Many people in our area have to move to Dublin or other cites to get jobs.

Deputy Jim O'Keeffe asked about Corrib gas, we are supportive of that development and have said so publicly. We have done considerable research on it, gathered a good deal of information on it and we have come out publicly to support it and have done so all along. We also supported it recently when the company announced that it was going to apply for planning permission again.

Many people locally believe that a pipeline will be laid to take the gas out of Mayo and bring it to Galway and into the southern ring because at present there is only the southern ring. We know that other towns along the route, such as Castlebar, Westport, Tuam etc., will have access to the gas. We tried to get somebody to carry out a feasibility study on bringing the gas strategically through Connacht which would cost approximately an extra €20 million to €21 million. That would involve piping the gas to service the Knock Airport area, which has a vast potential to develop and will develop, to service industry in Ballaghaderreen and to bring the gas to Boyle, Carrick-on-Shannon and down to Sligo. That would involve bringing the gas roughly an extra 20 miles at the cost of approximately €1 million per mile, involving an additional cost of €20 million to €21 million. However, neither Bord Gáis nor the Department has yet agreed to examine the feasibility of doing that.

There is nothing in my brief to indicate that there would be more than one presentation, but if Mr. Hannick wishes to take four or five minutes to make his presentation now he can do so. A number of Deputies are offering.

Mr. Hannick

The four of us wanted to contribute. I can confine my presentation to three minutes.

You can proceed now if you wish.

Mr. Hannick

I will speak about bringing jobs to the people, the industrial side, about which I know most. We seriously question the effectiveness of having Objective One status in terms of the Government's job policy. I will deal with three bodies, Enterprise Ireland, the IDA, and county enterprise boards. Even though the Minister came back from Brussels at one stage and announced that the Government could offer an extra 20% for the BMW region, being an Objective One region, in most programmes that does not happen.

I have a chart with examples of all the programmes of Enterprise Ireland, the majority of which involve a difference of 5% or 10% depending on location, although many involve no difference. The funding for county enterprise boards is effectively the same, whether it is based in O'Connell Street or in Mayo. Recently a project was lost to Ballinrobe because the IDA offered only €3,300 per job. The promoter, when negotiating with other overseas officers, was given to understand he would get much more. When he was offered only that amount per job he took that offer as a rejection and located one part of his project in Wales and the other part in Birmingham and about 70 jobs were lost to Ballinrobe.

I have considerable experience of industry in that I have been involved in Killala Community Council which was involved in bringing in 12 industrial projects over a number of years. We attracted our first industry in 1971, and some of the companies we encouraged to locate in the district then still survive and others have been lost. I have a small engineering company in Killala for the past 22 years and we employ 43 people. I also work with the vice-chairman of the Mayo Industries Group which has multinationals represented on it. That group was formed to lobby for better infrastructure in the west, including better roads. A number of local companies found that many of their goods were damaged in transit on the N5, the condition of which is still quite bad, although the NRA is making some improvements to it. We hope the Minister, Deputy Brennan, will start to redress the imbalance in 2004.

Many of us believe that if the proper incentives were available industry could be attracted to locations outside the cities and in the west. I wish to refer to the making available of accelerated capital allowances for tax designated areas such as business parks in Dublin - the East Wall business Park is very successful. However, when we try to do something like that in the west we are told that Europe will not allow it. Can the committee find the reason for that? I imagine there must be some way around that, if one can get tax designation for a business park. We have a developer who is the same person who developed East Point. Such a project could be developed as a pilot exercise around Knock Airport or elsewhere and then expanded to other areas in the west if it were successful, which we believe it would.

The infrastructural figures were mentioned before and I will not go into them again. Deregulation without a public service order could have dangerous consequences for the west, where providers want to go to the bigger centres. That is understandable, so it is important to have the public service obligation as well.

I would seriously question how effective Objective One status has been for the BMW region. Perhaps the committee, or some other body, should carry out an assessment of its effectiveness. It was introduced to help areas such as the west to develop and operate on a level playing field.

Dr. John Sweeney

The EU's centre of gravity is about to take a dramatic and substantial shift to the east. Peripheral regions, especially those in the west, are about to become even more marginal in the years ahead. We must face the reality that an urban hierarchy - comprising Prague, Warsaw and Budapest, with increasing influence from Berlin - will play an important role in attracting mobile investment, which might hitherto have come to Ireland but may now be attracted to relatively cheap and well-educated labour forces in the accession countries. That is the broad picture we have to consider because the problems of peripherality will become even more acute.

Imaginative and radical spatial planning policies are required in order to position Ireland to cope with this situation. We require a strengthened urban hierarchy and need to do business in an increasingly efficient way at European level. The reality is that Dublin is the only European city that can compete on this large city scale, so it must become a more efficient area in which to do business.

At the same time, a strengthening of the Irish urban hierarchy outside Dublin is necessary to create attractive areas where a critical mass can be created for attracting investment. This is the rationale behind the national spatial strategy. The price of ignoring this imperative, for whatever ends, will be very costly for Ireland Inc. in the future.

The territorial component is also a feature of the draft European constitution under which EU citizens will have a constitutional right to equal opportunities, regardless of where they live. The target of eliminating spatial disparities has been adopted by ministers responsible for spatial planning in each member state, as far back as the Potsdam conference in 1999. Economic and social cohesion, the conservation of natural resources, and a more balanced competitiveness for the EU's territory were three fundamental goals specified at that conference. Indeed, they have been activated in a number of European policies, including Structural Funds, competition policy, environment policy and trans-European networks. Ireland has benefited from many programmes, such as INTERREG and Leader.

There is a need to look more closely at how we manage territory and the national development plan recognises this from a national perspective. However, the dimensions of the problem are such that the gaps between west and east in Ireland are now growing larger. The statistics are quite clear: the share of net industrial output accounted for by the seven western counties shrank during the 1990s, while that of the Dublin region grew markedly. Total employment in IDA-supported industry fell by 3.3% between 1998 and 2002 in the Border, west and mid-west regions, whereas in the east it increased by more than 18%. This has had consequences that lead us to argue that we cannot solve the problems of the west without at the same time tackling the difficulties of the east. Both areas are essentially two dimensions of the same problem.

From the metropolitan fringe of the Dublin region, it is clear that residential expansion is transforming the whole physical, social and community landscape there - not in a nice, orderly or rational way but in a disorganised, cherry-picking approach, which is showing a complete lack of central control. This is not conducive to the long-term economic or social development of either the west or east of Ireland.

The dimensions of the problem in the east are well known to many people, including the fact that quality of life issues are becoming bigger. The duration of journeys to work has doubled since 1990. Reliance on cars, congestion and social dislocation have become major issues in many towns and villages surrounding Dublin. We know about the infrastructural bottlenecks and we are also aware that structural funding for arterial routes was not designed to have them clogged up by commuter traffic.

There is a social and infrastructural deficit that affects cohesion, education and the quality of life in many areas. I come from a typical town in north Kildare, which has half the population of County Leitrim, but it has no children's playground, community centre or any public sports facilities. A large proportion of children there are educated in pre-fabricated buildings. Children from the same families may even be bussed to schools in three or four neighbouring towns. There are major difficulties in the east and it is only by tackling them that we can address some of the issues in the west, also.

We face longer term issues of infrastructural spending in the east to cope with the mess that, one could argue, we have made of it. Related issues such as climate change and water supply will become big issues in terms of the huge infrastructural spending required to support the population of the east. That may have been unnecessary if we had got the situation better under control earlier on.

The committee should consider issues that relate largely to the absence of legislative control. There is no legislative basis for the national spatial strategy, the regional planning guidelines to implement it, or the strategic planning guidelines for the greater Dublin area. I would refer the committee to last year's High Court case that demonstrated this.

The political will to tackle the problem of excessive rezoning requires fundamental reconsideration. This is because the engine for much of the problem in the eastern part of the country is coming from the rezoning frenzy and the huge amount of paper capital created as a consequence of excessive rezoning. I would refer the committee to two counties where, by the stroke of a pen, €7 billion worth of assets were created. Sometimes, those assets are bought by people from the west of Ireland in search of jobs, and sometimes by people from Dublin city who are in search of affordable housing. The issue must be tackled because it is on a scale comparable to Exchequer spending in many key, critical areas.

The two dimensions of the problem should be handled as a unit. We suggest that strict compliance with the national spatial strategy should be a requirement of local authority planning activities and of decentralisation proposals. We urge strong and sustained intervention by the Minister to stop practices running contrary to these objectives.

We hope that the sub-committee on property rights will address the issue of windfall profits from land rezoning practices. The provision of infrastructure - especially power, transport and telecommunications - to the west is vital to strengthen the urban hierarchy of the west of Ireland and, thus, facilitate direct foreign investment there. That is not to say that we do not need social infrastructure in the east of Ireland; it is critically needed and must be provided. Power should be given to regional planning authorities to regulate and co-ordinate county development plans in their jurisdiction and to ensure that strict compliance of such plans with the regional planning guidelines takes place. Only by an integrated approach to the spatial planning of Ireland can the problems of both the east and the west be addressed in tandem to the mutual benefit of both areas.

I welcome the delegation which made an excellent presentation. Some members may have been shocked by what they heard but those of us who live in the west are familiar with it. We discussed the under-spend at length and I will not go into it further other than to say things do not just happen. Mr. Hannick stated that nobody set out that this would happen. However, things do not just happen; they are allowed to happen. It has been a conscious decision. To turn things around, it would have been necessary for the Government, at beginning of this national development plan, to front-load spending on projects in the BMW region. The same thing happened in the last national development plan and it continues to happen. Unless a conscious decision is made, the situation will continue as is. As I said, it is not enough to say nobody set out that this would happen. I strongly believe the fact this happened, and continues to happen, is an indictment of those who allowed it to happen.

People, particularly in the west, were delighted with Objective One status and they believed it would make a difference, yet the delegation made it quite clear that we are losing opportunities under Objective One status. Some extra money is coming from Europe as far as Structural Funds are concerned but Ms McAllister gave a good example about the co-financing of a particular project. If the 75% that was allowed had been offered, the community could have gone ahead with it but it was not given. There is little point having Objective One status if we continue not to implement it and if the opportunities it presents are not taken up.

I refer to the regional aid guidelines. The delegation spoke about county enterprise boards and said the difference between Mayo and O'Connell Street is nil, yet there is an opportunity for Enterprise Ireland, the IDA and the county enterprise boards to give greater regional aid. In many cases, it is not taken up. This is a major issue of which people are not aware; only those involved are aware of it.

Dr. Sweeney's presentation was excellent because sometimes this is perceived as an east versus west issue, but it is not. He spoke about it being both sides of the same coin and how the rezoning frenzy, as he described it, in the Dublin area drives development and is totally contrary to the national spatial strategy. Without a legislative framework for the national spatial strategy or the planning guidelines for the greater Dublin area, it will be a bit like the spend on national roads - it has happened and it will continue to happen because nobody will say, "stop". It is not good for Dublin. Once rezoning takes place and houses are built, infrastructure is needed. It is a vicious circle and unless somebody breaks it and unless a conscious decision is made, it will continue.

I refer to what this committee can do in terms of looking at the European dimensions. As was said, we could look at Objective One status and at how opportunities presented to the west could be maximised. The possibility of tax designation at Knock Airport was mentioned. We received a briefing on tax designation and the guidelines, although I do not know whether it has been circulated. I will not go into it now but the document is available and perhaps we can discuss it later, that is, the implications of such tax designation.

Yesterday in the Dáil the Taoiseach, when reporting on the Brussels meeting, spoke about the Quick Start projects that will be partly funded by the EU. He mentioned two in particular, the Cork-Dublin-Belfast rail link and the motorways of the sea project. He also mentioned two other possibilities, the Cork-Dublin-Belfast road link and a second interconnector for electricity. I told the Minister for Foreign Affairs that three of those projects would contribute little, if at all, to any type of balanced development in the regions. I suggested to him that if those four projects were put forward, either the road or the rail link from Cork to Belfast might travel up the west coast while the other might travel up the east coast. As a committee, that is something we could pursue or push in the context of balanced regional development.

I listened to the presentations with great interest. I agree with Dr. Sweeney and Mr. Hannick about this being two opposites of the same problem. On the one hand, there is overcrowding in Dublin resulting in gridlock, social problems and so forth while on the other hand, the west is being denuded of its population as young people move to Dublin and larger cities for employment, as was stated in the Council for the West document. As a Deputy from Dublin, I have a great interest in these matters. Obviously, the delegation has come to the committee with specific proposals that I welcome. Ms McAllister made specific proposals on transport infrastructure and so forth which we would like to pursue.

I was surprised no speaker mentioned decentralisation. I presume it is important. MsMcAllister referred to the importance of Knock Airport. Presumably, the decentralisation of a Department to Knock is a significant event and I would like to hear the delegation's views on it. Dr. Sweeney mentioned quality of life. Has any study been carried out on whether the quality of life in the west is better than in the east in terms of social problems, traffic congestion and lower prices? Is that a fact, or has it been disputed? Has a study been carried out on other countries? Has any other country got this right? Economics is capital, labour and flows to the centre. Deputy Harkin mentioned somebody making a conscious decision to bring this about. Perhaps she was dealing with the specifics but, in general, no conscious decision has been made in regard to economics. Economics and the free market economy mean things flows to the centre. Has any country in the European Union, or potential EU member state, addressed this issue satisfactorily?

I wish to make some comments before the delegation responds. Deputy Haughey raised the issue of decentralisation. I do not know whether it is of much benefit to decentralise a Department to Waterford if one happens to come from Knock, and I know it sounds great to develop Knock Airport. I have no difficulty with decentralisation or with the question put by Dr. Sweeney but I have a difficulty with it being done in an unplanned way. It is not an east versus west issue. There should be planned and balanced development.

I resent it being said that there is a Dublin mindset. I am a Dubliner and I will not apologise to anyone from being one. I have no difficulty with Deputies from Mayo, Cork or elsewhere. I am a Dubliner and was elected by the people of Dublin South Central. Some of the poorest communities on this island and from which people do not get the opportunity to go to university, for example, are in my constituency. There are flat complexes in my constituency which house more people than the population of Tuam and from which nobody has ever gone to university. It is not a question of either/or; it is a question of both and of acting in a balanced way. We must win each other's respect.

I like the west and not only as a place to visit. We should be careful in respect of it and try to develop it. However, that need not be done by pitching people from different regions against each other. There is a case for balanced development but it should be done in a balanced, agreed and planned way. That is my view for what it is worth.

As a Deputy from Dublin, I am a little concerned that we might talk down Dublin not within the island but outside it and people might say it is a terrible place in which to invest or to live. It is not a terrible place. I do not want to live anywhere else. I am quite happy living in Dublin. We do have problems such as traffic congestion and we need to address them, but in doing so we should not talk down Dublin. This is a fine city in which to live and I am very proud of it. Deputy Haughey and I are former lord mayors of the city and we both are very proud of it.

On the issues the delegation raised, we have been to Castlebar and we have had the delegation come here. The delegation has come a long way to put these issues before us this morning. They are interesting and well thought out concerns.

The committee might consider appointing a rapporteur. We have the power to appoint a rapporteur, a member of the committee who would take into account what the delegation has said, what we found on our visit to Castlebar, any other findings that members of the committee would like to bring together and any other witnesses the rapporteur might wish to consult, and then set a report before the committee for us to agree and present to the Oireachtas. That is one way we could assist with the balanced approach to which the delegation referred. Appointing a rapporteur is something we could think about for the new year, if a member of the committee wished to take up that offer.

Mr. Hannick

We are in favour of working together and we would hope to be able to support some projects which would be good for the inner city. Likewise we would hope for similar support. We do not see this resulting in a conflict of interest.

The following is a question which is probably never asked. If somebody buys land in Mulhuddart or Blanchardstown and proposes a new business park creating 10,000 jobs, that is hailed as great. I would ask whether it is great. Many people do not ask whether it is good for the people of Dublin. It may not be.

We certainly welcome the proposed decentralisation. What is happening at Knock Airport is great. The reason we did not mention decentralisation may be that we have been welcoming it for the past few days since it was announced and we had a function at Knock Airport on Monday. That may be the reason we did not mention it today, but we would be in favour of decentralisation and we would like to see more of it coming to the west in the future. We would welcome the civil servants and do everything possible to make them feel at home there.

Ms McAllister

In my presentation, I tried to focus on European issues only. While we did not mention decentralisation, of course we are very glad to see decentralisation occur and we feel it could be a stimulus that would sustain many services.

Quality of life, as the Chairman stated, means different things to different people. Much has been said about quality of life in the west and that sense of community. Certainly there are lower prices and lower house prices, but I suppose there is another side, for example, problems of rural loneliness and access to health services. There are two sides to the issue of living in an urban area or in the west.

Overall quality of life is probably one of the strong points of the west and is probably an aspect we do not promote enough. Perhaps we should be more positive about the region and what it can offer rather than focusing on what it does not have because it has a great deal to offer.

A Deputy wanted specific suggestions about what can be done. Certainly we are keen on the appointment of a rapporteur and we would welcome that. Obviously, we are here about progress and we would certainly be keen to see a way of moving some of the issues forward.

We were watching the Quick Start projects over recent months and we noted that they were on the Belfast and Cork routes. Certainly it would be extremely beneficial if one of those along the western strategic corridor could be considered. It would link not only the east, but the west and certainly Northern Ireland and into Derry. This is quite important, particularly for the northern half of the region. Sometimes we forget about the positioning of Donegal, Sligo and Leitrim, which are very much in the north-west, and therefore those links are quite important.

In my conclusion I mentioned a number of points such as the infrastructure planned in the next three years of the national development plan. If we could even complete the planned expenditure, it would be something. The committee is well aware of the state of the west. We tried to get front-loading of expenditure in the national development plan and it did not happen. We are struggling to get delivery on the actual national development plan and it is very important to see that delivery. We feel that something must change in the mid-term review. If the mid-term review just continues in the same way, administering projects as before, the change will not happen. There must be some change in how it is handled.

We do feel that accelerated investment in Knock International Airport and the western rail corridor would be strategic, forward thinking, visionary projects and would have an immediate significant difference in the region. We call for support for those because they are outside the current national development plan. Knock International Airport was categorised under regional airports and therefore accesses only regional funding in terms of supports. Its status would have to be changed to that of an international airport. Although it is an international airport and functions as an international airport, for some reason it is categorised as a regional airport. The re-categorisation of Knock as an international airport may be the methodology of improving investment there to bring it up to the standards needed to compete.

As a matter of policy, the maximum levels available from Objective One status could be used as a blanket policy across all programmes. With the promotion of that, one might see more leverage from the private sector on those issues about absorption and capacity and about the lack of private sector investment. Some of those could be practical ways of bringing the issues forward from a European context.

On the future of Objective One, the committee will be engaging in discussions about how the thematic approach will work. This emphasises the urgency of completing the infrastructure. That thematic approach assumes a basic infrastructure and this focuses on the urgency of generating infrastructure.

I suppose I was careful in my presentation not to compare ourselves to the south and east region all the time. I realise we did so in the charts but not in the text. That is important because it is not about everybody else doing quite well and the west not doing well. It is about our own region, how we can move forward and how we can be competitive.

We would hope that our capital city would grow too. The National Spatial Strategy really underpinned this, that it is extremely important for Ireland. We need a very strong, promising capital city. That is really important.

I welcome the reference to other side of the coin from Dr. Sweeney because he has really given us an insight into some of the other problems - water, infrastructure, environmental issues and planning. These are practical things that are happening today.

Although the committee has been in session since 9.30 a.m., the delegation has come a long way and I do not wish to cut the speakers short. I will ask Dr. Sweeney to say a few words and then perhaps the Bishop might make a few concluding comments.

Dr. Sweeney

A coherent approach to national spatial planning should not in any way involve the relegation or the denigration of the importance of Dublin city. I echo your comments completely, Chairman. The vibrancy and economic health of the city is an essential ingredient in the economic performance of the country as a whole in the future. The difficulties the Chairman alluded to in the Dublin South-Central areas are ones which also exist in many parts of the city, especially on the western fringes of the city, and the State has invested vast amounts of money in servicing land for development in those areas, which have been left derelict and ignored. The difficulty I was alluding to was the problem of cherry-picking and of by-passing areas in favour of areas much further away which are deemed to be more attractive and easy to develop. The inner city is also part of the problem area that can be tackled by a coherent approach to this whole issue of spatial planning.

Perhaps there is something in writing on the issue of rezoning difficulties that the delegation could send us. It is an interesting issue. It might give us an opportunity to pursue it.

Bishop Finnegan

I have a question about the workings of the committee. I know that the committee reports to the Oireachtas. It would interest me that there are information resources with which the committee could help us. Would that be correct?

I am sure there are. We have access to almost any information on Europe that we want to request from Departments and European institutions. Our workload is extremely heavy and the committee's own resources are very limited, but we do have such access.

Bishop Finnegan

Thank you, Chairman.

Mr. Hannick

We would welcome and work closely with a rapporteur.

Deputy Haughey asked about house prices and other benefits. In the west house prices are approximately half or possibly less what they are here. A good three-bedroom house would be approximately €110,000 to €120,000. The development of the west spreading out from the city would assist in the area of inflation and house prices. All that remains for me to do is to thank the Chairman and members of the committee for taking the time to meet us, including the meeting in Castlebar. I hope we can work together on these issues.

I will conclude by thanking Bishop Finnegan, Mr. Seán Hannick, Ms Lisa McAllister and Dr. John Sweeney for attending the meeting. It was a very interesting presentation that was professionally put together. We have the documentation. Balanced development is an issue that should interest all of us on the island. It should not be mutually exclusive. It can be inclusive and we can help each other to improve the quality of life.

This is a joint committee of the Dáil and Seanad. We do not traditionally break down on party lines. We rarely vote and we usually do things by consensus. We try to do things by agreement, by being reasonable and considered. Members of the European Parliament have the right of attendance and participation here. They attend to their other business during mid-week but they regularly attend here on Mondays and Fridays, and sometimes during the week if they happen to be available.

Our terms of reference come from very broad terms of reference given to us by the Dáil and Seanad, which covers almost anything to do with Europe, and also by legislation given to us last year which empowers us to scrutinise in advance proposals coming from Europe. We do this through a sub-committee on scrutiny. This will meet at 9.30 a.m. tomorrow. We scrutinise in advance all draft directives and regulations. Deputy Harkin is a member of the sub-committee and sometimes issues of concern to the west arise. We can ask the Minister or Department in advance if they have raised a certain issue. This will grow with the next treaty but the process has already begun. By law the EU scrutiny legislation passed last year gives us that power.

I will undertake to put on the agenda for the next meeting a proposal to consider appointing a rapporteur on regional development in the European context. It must relate to the work of the committee. We cannot do the work of other committees. We will put the issue on the agenda and see what interest there is in the matter. The rapporteur will have to put a lot of time into the job. A great deal of good material was produced today and in Castlebar. There are other sources from which we can draw. We will try to ensure that the Dáil and Seanad, with the assistance of our MEPs, will move forward with this balanced development. Important issues were raised on the quality of life for us all.

I appreciate the fact that the delegation took the time to come here. I wish them a safe journey home and a very happy Christmas.

The joint committee adjourned at 1.14 p.m.sine die.
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