I propose to deal first with item No. 4 on the agenda, a discussion with the Minister for Finance on the proposed National Development Plan 2007-2013. The Minister will make an opening statement, after which members will be invited to ask questions or make comments and contributions but for no longer than ten minutes each to facilitate all members. If members wish to ask further questions, we will try to facilitate them.
Proposed National Development Plan 2007-2013: Ministerial Presentation.
I am pleased to be here to make a presentation on the next national development plan which will cover the period 2007 to 2013. This presentation arises from the invitation I gave to the joint committee to prepare a submission to me and the Government on the next national development plan. I look forward to receipt of its submission and hope our exchanges today will be of assistance to it in its preparation.
The focus of this exchange is on the next national development plan. As requested by the committee, I have circulated a statement detailing progress under the current plan. It is not necessary for me, therefore, to dwell on this in my presentation. Suffice it to say that investment under the current plan is transforming our stock of economic and social infrastructure. We are also investing in our communities and promoting social inclusion.
The appropriate investment strategy for the period 2007-13 should be informed by a vision of our optimal state of economic and social development in 2013. This vision should include a stable, well managed and competitive economy with sound public finances which will deliver the resources to fund top class public services and a world class economic and social infrastructure stock, with particular reference to transport, housing, health, education and environmental services. We should continue to experience high levels of employment among a skilled and adaptable workforce with strong productivity in the public and private sectors. Our socially inclusive and regionally balanced society will incorporate a well integrated and diverse ethnic and cultural mix. Social provision will be adequate to meet the needs of more vulnerable groups in society, especially the young and the elderly. Our society will be imbued with a strong sense of community spirit and will enjoy a good work-life balance and a high quality environment.
As committee members will appreciate, it is easy to articulate a vision. However, the achievement of this vision will involve many functions, some of which cannot be controlled by any Government, for example the state of the international economy. The Government cannot achieve its social and economic objectives on its own but must provide leadership, direction and competence. In particular, it must invest in areas that improve competitiveness and productive capacity and promote the economic conditions that allow the private sector to thrive. The new plan will be framed against this background.
A key feature of the next NDP will be an overriding commitment to economic and budgetary sustainability. In other words, the investment allocations set out in the next plan will be dependent on the availability of resources. A commitment will be made to further enhance economic and social infrastructure in the key areas of transport, environmental services, social and affordable housing, health, education, broadband and energy policy. Major investments will be made in education at all levels, with a particular emphasis on the third and fourth levels, in tandem with continued investment in labour force training and lifelong learning. Supports will be made available to the productive sector, including manufacturing, agriculture, tourism and general services. Social inclusion will be promoted through the harnessing of targeted investments among disadvantaged areas and groups. A substantive investment framework will be developed to promote a better balance in regional development in line with the template of the national spatial strategy and will include a framework for the development of the rural economy. The plan will promote North-South economic co-operation and develop an all-island economy. Investments in the environment will promote environmental sustainability.
Before I expand on some of these features, I would like to make a number of specific points about the forthcoming plan. It will be a high level strategic document, not a list of projects. The latter will flow over the period of the plan from the investment framework it sets out. The seven-year financial allocations set out in the plan will be indicative in nature. Given the overriding budgetary constraints and the fact that allocations will be made over seven years, it is totally unrealistic to suggest that these allocations can be set in stone. I can, however, assure the committee that the level of commitment will be ambitious and the Government will be determined to see it delivered.
Indicative allocations will be made at national rather than the two region level set out in the current plan. The two region basis derived from the Structural Funds regionalisation strategy under the current round, which yielded an additional €600 million in Structural Funds. That issue does not arise on this occasion and the regional development strategy in the NDP will be built around the national spatial strategy template rather than the narrow two region approach.
The funding in the NDP will be domestically sourced and the vast majority will come from the Exchequer. It is proposed to encompass key investment by commercial State bodies and local authorities. Some €800 million in Structural Funds will accrue to the country over the seven years and this will be the subject of a separate programme to be agreed with the European Commission.
The achievement of value for money will be central to NDP investment, and capital investment in particular. This will require rigorous appraisal and best practice management of all capital projects by implementing agencies and Departments. The enhanced value for money measures I announced last October will be fully applied. Ongoing programme evaluation, including a comprehensive mid-term review of the plan, and robust reporting and monitoring arrangements will be put in place. The reporting format will be clear and transparent and will enable progress to be readily identified across the various priority areas of the plan. My Department will draft an annual report on NDP implementation and lay it before the Houses of the Oireachtas.
I will now elaborate on some of the specific priority areas in the next plan. Sound economic and fiscal policies will be central to the next NDP. The Government has learned the lessons of the past. We have continued to foster carefully the conditions necessary to sustain strong economic growth. Since 1997, Ireland has become one of the most successful economies in the world. Economic growth has averaged 7% per annum, unemployment has been reduced from over 10% to the historically low level of 4.3% last month and more than 500,000 new jobs have been created. The Government's debt ratio, at 28% of GDP, is the second lowest in the euro area and stands at less than half of 1997's ratio of 65%. The budget has recorded a general Government surplus in eight of the past nine years. We have given money back to the taxpayer and our tax policy has encouraged and sustained the jobs market. However, we must work hard to maintain economic success and ensure this prudent fiscal management continues.
Sustaining economic development over the coming years will require increasing investment to address the economy's infrastructural deficit. The Government is determined not to take our success for granted or to become complacent. We will actively promote continued social and economic development so that the prosperity created today can be enjoyed by generations to come. Without investment in infrastructure, our future prosperity will be put at risk. In planning our infrastructure, we also need to think in a strategic and long-term timeframe. We have a window of opportunity in resource terms to invest at the necessary levels in our infrastructure over the coming decade or so. The composition of our population and our general demographic position means we have a relatively low dependency ratio for this period and can draw on a large pool of labour. That benign position will not last indefinitely.
The longer-term demographic issues faced by our economy and society will create challenges for the management of fiscal policy over coming decades. A number of analyses have indicated the pressures that demography will put on the public finances. The proportion of the population aged 65 and over relative to those of working age will more than double by 2050. This will inevitably lead to increased pressures across a range of age-related expenditure categories and give rise to significant costs. The Government has, of course, taken action to ensure that we will be in a position to deal with some these challenges. Our track record of budgetary discipline, Ireland's low debt ratio and the fact that we have been investing 1% of GNP in the national pensions reserve fund since 1999, for a cumulative total of €16.6 billion, will help to meet some of these costs. However, another part of our strategy has to be about raising our infrastructure to the standards enjoyed by other European economies in order to enhance the overall productive capacity of the economy. We must therefore use this window of opportunity to transform our infrastructure to a world-class standard.
The next NDP will be the key instrument in bringing our infrastructure to the required standard. Central to this process will be the roll out of the Transport 21 framework. Notwithstanding the particularly good progress made in recent years, we need a sea change in the quality of transport infrastructure, particularly in the area of public transport. In urban areas, and the greater Dublin region in particular, the public transport system fails to meet the needs of a modern international city. We need to radically enhance the public transport network in the greater Dublin area, while also investing nationally in line with the national spatial strategy.
I am aware that sceptics have questioned the economic wisdom of such an accelerated level of investment. My reply is that we simply have no choice. Projections show that there will be in the order of 300,000 more people living in the Dublin area by 2011 and the city is already suffering from intolerable congestion at peak times. It is not environmentally sustainable to rely on the car and the bus network alone to provide the answer. If we do not invest at the planned level, the result will be a further loss in competitiveness, serious deterioration in our environment and a lower quality of life for our citizens. We will, therefore, deliver on our commitments in Transport 21. I would stress, however, that all NDP investment in infrastructure, including Transport 21, must be delivered in a way that ensures full value for money.
Investment in education will form a core part of the NDP. We will build on the wise harnessing of Exchequer social fund moneys, which was a hallmark of previous plans. This is investment which has delivered major returns and will continue to do so.
The Government has placed research and development at the heart of its economic development strategy to build the skills necessary for a modern, knowledge-based economy and to strengthen our research base. We are committed to making a quantum leap forward in the area of research and development and to move Ireland from impressive latecomer to acknowledged leader in this critical area. The next development plan will provide the investment to advance that objective.
The programme for research in third level institutions, PRTLI, plays an important role in facilitating the strategic development of institutional research capabilities, enhancing the numbers, quality and relevance of graduate output and supporting high quality interdisciplinary and interinstitutional research.
The further development of our knowledge economy has made reform of our third level sector imperative, in order to enhance the quality of teaching and the student experience, to increase participation in third level education and meet up-skilling needs and, of course, to support research programmes, both basic and applied.
I announced in budget 2006 a strategic innovation fund for higher education over the next five years and allocated €300 million to that programme. This fund will be a central part of the NDP investment in higher education. The key objectives which will be supported by the fund are to incentivise and reward internal restructuring and rationalisation efforts, to provide for improved performance management systems, to meet staff training and support requirements associated with the reform of structures and the implementation of new processes, to implement improved management information systems and to introduce teaching and learning reforms, including enhanced teaching methods. It will support programme restructuring, modularisation and e-learning and quality improvement initiatives aimed at excellence. It will also promote access, transfer and progression and incentivise stronger interinstitutional collaboration in the development and delivery of programmes.
The NDP will also encompass investment in infrastructure in other areas, including social and affordable housing, health, energy, broadband and child care facilities. These are all key areas in the achievement of the vision for 2013 which I articulated.
The national spatial strategy set out a blueprint for balanced regional development. This blueprint is one which has achieved a general consensus and a measure of support. A key task of the NDP investment strategy will be to support this blueprint. It is important in this context to point out that this is not a question of the greater Dublin area versus the rest of the country. The NSS recognised the pivotal role of Dublin in national economic success and stated that it was essential for balanced regional development that the performance of the greater Dublin area be built upon and physically consolidated. The reality is that investment in infrastructure in the greater Dublin area and the linking of that area with other regions are beneficial for all regions.
Dublin is the key access point for a vast amount of our trade and for our international visitors. It is also now an international business centre and the spin-offs feed down to other parts of the country. The NDP must put an investment framework in place that will, in line with the NSS, assist each gateway to develop its full potential to contribute to the overall economic and social performance of the State. That must be done in a realistic way. Ireland is a relatively small country and investment in one region is likely to benefit economic performance in adjoining or outlying regions. We must avoid the development of a narrow, localised mindset and try to ensure an integrated, prioritised approach to regional development. In particular, unnecessary and wasteful duplication of infrastructure provision should be avoided. That said, it will be crucial that those NSS gateways which are lagging behind receive the necessary level of investment to enable them to improve their economic performance.
My presence here today is part of a major consultation process on the next NDP which has been undertaken by my Department. Submissions have been received from most of the social partners and from regional interests and meetings with those bodies have been held. In general a strong consensus has emerged from the consultation process as to what the NDP priorities should be and the overview I have given today has been informed by those views. It is also important that the views of the Oireachtas are heard and I look forward to a submission from the committee after our exchange today. It is intended to publish the NDP in November next so the time is relatively short for submissions to be made.
I thank the committee for its attention and I am happy to answer questions from members.
I ask members to restrict their contributions to ten minutes in order that all will get an opportunity.
I thank the Minister for his presentation and for attending to hear our comments. I find the NDP process extraordinarily lacking in transparency. The last mid-term review, which is a significant document published by the ESRI, confirms that impression. It refers to costs being too high and major design changes being made without any fresh analysis. It mentions problems with project selection and with management. It states that weaknesses are evident in the transparency of project selection and prioritisation, and calls for the establishment of a unit in the Department of Finance devoted exclusively to the conduct and commissioning of cost benefit studies on major projects, to improve the way they are carried out at present. It points to weaknesses in project management which are manifested in both excess costs and delayed project delivery and management structures which do not always enable management of the programmes. It states that sanctions are not imposed for non-performing measures and lists many other deficiencies. It is a less than glowing assessment of the position at mid-term.
I have consulted the website to see what progress there has been since then. The last piece of information on the website relates to 2004, which is at variance with the notion that we are on top of the programme, focused on delivery and adapting rapidly to changes where projects go awry. The report shows that, in 2004, two thirds of the way into the programme, we had already spent more than 100% of the provided money for roads but had only delivered half the projects. We had spent 80% of the money for waste water but delivered only one third of the projects.
It states that 85% of the money for public transport was spent and approximately 85% of the projects delivered. However, the report measured the targets for Dublin Bus by reference to its total number of buses, not added buses, which is extraordinary. It determined that Dublin Bus had achieved 90% of its target by counting the entire fleet. Surely any realistic evaluation of investment for the purposes of the NDP would count the number of additional buses, which we know has not changed in five years. There is something fraudulent in the way those figures are presented.
It goes on to report that the spend on local infrastructure in the BMW region was 117% of the money allocated but that only 62% of projects were delivered. In the south east the figures are better.
Is Deputy Bruton referring to the last plan?
I am referring to the lessons we must draw from the last plan as we prepare for the next. The document, which was published in January 2006, reports very limited changes in expenditure following the mid-term review. In other words, the work done in the mid-term review did not result in any significant changes to what was done in the rest of the programme. The report goes on to state that we are rich in policy positions and reports but that there is a tendency for such reports to remain as proposals and not to lead to any clear follow-on in decision-making. It is an extraordinary piece of writing for a mid-term review. On the link between policy decisions and investment decisions it states that tangible instances of policy decisions leading to programme changes tend to be exceptions rather than rules. It also states that the national spatial strategy has yet to result in project prioritisation decisions being taken notably different from those that would have been taken in the absence of the strategy.
These are damning indictments of the extent to which the high level strategic policy thinking which the Minister advocated impacts on what happens. The Minister says he would produce another high level strategic document which will be light on detail and will not list projects. I will sound a warning about that. We need a sound strategic basis for what we do but if, as is shown in this document, there are no tangible links between good strategic documents and what happens in project selection and delivery, then we are wasting our time. This goes to the heart of the issue.
I agree with the Minister on some of his priorities, education being an example. It is absolutely crucial but we have no strategic vision whatever for it. We face enormous challenges, with a high proportion of the existing workforce having stayed in education only up to the age of 15 years. There is huge strain on second level education opportunities. However, we do not have a strategic vision for this. We all want to put money into education, but it is vital that we do so in an environment which will ensure we address priorities and see delivery. It is appalling that 17% of children do not sit their leaving certificate examination. For years the Department of Education and Science stated the target was 10%, but we are not achieving this and do not have a strategy to do so. We keep repeating the target and in so doing believe we will achieve a different outcome from the one we keep getting. We need a statement of policy.
The position is similar with the health strategy. It is crucial that we have a coherent health strategy. One was published in 2001 but every element has collapsed. The strategy for hospital beds has been entirely abandoned, as has the strategy for primary care. We do not have a strategy statement followed by implementation in the health sector.
On transport, we have a vision statement, but it has not been underpinned by proper project evaluation. It consists of maps and starting and spending dates. However, the public has not seen any evaluation of projects which would give it the level of confidence the Minister has rightly stated he will insist upon. We are signing up to spending serious sums but not seeing the level of evaluation that will give us confidence that these are soundly based projects.
The Minister has stated the national spatial strategy is crucial. In the very first test — decentralisation — it was entirely abandoned. We need to see how it will be at the core of the NDP strategy the next time around, but this cannot be done with a high level strategic statement. What will occur in hubs and gateways should be pinned down. One would then see an infrastructure programme which would make locations competitive. The vision for regional development is far stronger and more demanding than shoving public servants around as if they were pawns on the board, placing them in decentralised offices.
We need serious thinking on a regional strategy. The Minister appears to think there is great consensus that the issue has been cracked and that there is agreement on a regional strategy. There is no sense that we have such a strategy that is working effectively.
Does the Deputy oppose the national spatial strategy?
I do not.
May I infer from that there is some level of agreement on it?
That is not related to the question. There is no point in coming here to smirk for the benefit of the gallery.
I merely asked the Deputy a question.
I listed for the Minister the instances where the spatial strategy has had minimal or no impact on the spending programming. I am quoting from his own evaluation framework.
From 2003.
This was published in January this year. Perhaps the Minister's officials will get a copy for him. It states:
The National Spatial Strategy is an example where the publication of this (prior to the Mid-Term Review) and the publication of NUTS III level Regional Planning Guidelines subsequent to Mid-Term Review, have yet to result in notably different project prioritisation decisions being taken than would have been taken in the absence of the NSS.
The record is that the national spatial strategy, on which there is consensus, is not making any impact on what is happening under the NDP. There is no point in trying to score political points. I agree with the spatial strategy.
I was just asking.
Bearing the evaluation in mind, I wish to see strategy statements followed by decisions and programmes to implement them. They should not be glossy trophy documents on shelves which look very well and impress foreign visitors but do not actually deliver the goods. We need to consider getting fresh strategy statements which mean something and which would be properly underpinned, but the record is not good. The health strategy has collapsed; the education strategy is absent; the national spatial strategy has yet to make any impact, while Transport 21 is not up to the standard anyone would accept to build confidence for the scale of investment involved, €34 billion.
Many issues should be addressed. One element at which the Minister should look beneath strategy statements is that with the spending of capital funds, if work practices are not thought through properly, opportunities will not be delivered. Public service reform is the key issue on the agenda for the next decade. We must convert the public service into one which is capable of delivering to the highest standards. Investment will be a big part of this. We must ensure the investment made will shoehorn changes in work practices to ensure best practice.
Everybody is focusing on health. The Minister has more experience than anyone in this room on the issue but it strikes me that the lack of pricing incentives within the system, negotiated contracts, work practices in laboratories, etc. are hampering our ability to achieve high quality delivery in capital spending and employment in the sector. There must be a link under the NDP between investment which the taxpayer will be asked to fund and changes in work practices which will see some of the potential being realised.
I am not happy with what the Minister has stated about a high level strategic document. It will look and sound great and provide a day out in Dublin Castle. There will be much press coverage. The record shows, however, that these glossy statements are not having the impact they ought to make. That is not only my view, coming from the Opposition, but also that of the Department's own documents and people who consider the issue and try to advise us. The Minister should think again about how to approach the NDP.
With regard to the mid-term review of the national development plan, we have heard from Deputy Bruton suggestions that the economy is on the point of collapse.
I did not mean it in that nature.
The Deputy indicated that nothing was happening and that money was being wasted left, right and centre. He stated there was no transport strategy in the context of the national spatial strategy. Every major road plan is appraised in line with the national spatial strategy. This includes the completion of inter-urban roadways. Of 18 projects last year, 17 came in on time and within budget. Total investment was €1.3 billion. That is one instance where what the Deputy said is totally at variance with the facts. There is a connection with the national spatial strategy. The roads lead to the areas we intend to develop as gateways and hubs to ensure regional development.
Taking into account the conclusions drawn by the ESRI with regard to the mid-term review, it paints a slightly different but more balanced picture than that suggested by the Deputy. It endorsed the strategic approach which continues to be followed by the Government. It noted that the strategy underlining the plan remained valid. The key findings of the report included: "To date the NDP/CSF has made significant progress towards its objectives of ‘continuing sustainable national economic and employment growth' and ‘consolidating and improving Ireland's economic competitiveness'." It went on to state the NDP "will have a substantial sustainable positive effect on competitiveness and the productive capacity of the economy in the long term".
An important point made in the mid-term evaluation is that in the first two years of the national development plan, to 2002, there was an international downturn and the outbreak of foot and mouth disease. Expenditure in the first two years had raised the level of GNP over 7% above what it would have been in 2002, so the idea of no added value does not stand up. In the long run it says the level of GNP will be around 3% higher and that it represents a real rate of return on the investment in the national development plan of around 14%. These are the conclusions of the ESRI, not my own. It also said both regions share and contribute fully to the modern day success story that is the Irish economy. It is described as a success story, not words I have heard here this morning.
A number of indicators were important including participation rate, unemployment rate and employment rate. Taken together, the most important economic indicators are the rates of unemployment and employment combined with the participation rate, which essentially measures whether the region sustains itself.
It is a question of looking carefully at what the ESRI had to say. I submitted documentation to this committee yesterday, a progress report on the implementation of the National Development Plan 2000 to 2006. I have not heard any contributions on that so far. It sets out clearly the significant progress that has been made and the reduction in differences between the regions. It is all set out and I will not repeat it here; I am making a general reply. However, I felt I had to comment on the overall tone if not the contents.
We all recognise that much progress has taken place but is the society in which we live today good enough for the country? Is this the kind of country in which we aspire to live, given the population we now have? In recent years a series of indicators has been published by various bodies that collect information on competitiveness. I want this to be a positive discussion, but the Minister must be aware, through his officials and his experience, that in certain areas, for example broadband, we are close to the bottom of a league in which we occupied the top position ten years ago. What does the Minister propose to do in the next national development plan to change this situation? The roll-out has been expensive.
The Minister must know, representing the constituency he does, that connections vary depending on where one is in the country and the road one goes up or down. One might say that is not too bad for an individual in an isolated house. However, we seek a knowledge economy and a dispersal of the jobs in which people are interested. If a person wants to set up business in various parts of the country — Wicklow, Carlow, Kilkenny — they cannot depend on reliable IT communications. In Dublin parts of Castleknock have different levels of service.
This committee should focus on where we are going and the kind of country we want to live in. The Government's obvious policy is to allow a large amount of immigration of workers on relatively low wages and employers have been very happy with this situation as wages for many services have fallen. Many of the immigrants from accession states who come to live in Ireland are highly qualified and they will seek to earn better money here. The trade union movement will make efforts to ensure they achieve better pay and conditions. The services sector will not, therefore, necessarily remain in the low wage area that it has recently occupied. How will we achieve a high wage, high value economy that most wish to see workers enjoy, Irish and immigrant alike? This is a crucial question for the next national development plan.
The Minister has spoken accurately on the considerable achievements being made through road programmes, but where is the joined up thinking? We are creating an environment where young couples working in Dublin can afford only houses west of Kinnegad. They will pay €1,200 per year on road tolls to commute to Dublin. The Minister was kind enough to acknowledge in his opening remarks to the committee that gridlock in the greater Dublin area is intolerable at a personal level and at a competitive level, in terms of taking this economy where we want it to go.
The Minister suggests in his presentation that Transport 21 is the blueprint. The timeframe for Transport 21 is far too protracted. The Sligo-Westport line, via Clonsilla, comes into Dublin, as do the lines from the south of Ireland, the Arrow line, where the commuter services start around Portlaoise and Kildare. If we lived in any other European country with the kind of income level enjoyed in Ireland it would be possible to travel to Dublin by high speed train from Athlone, Mullingar, Tullamore, Kilkenny and Carlow in 50 minutes because all of those routes would be electrified.
The Minister should be ambitious in enacting this plan. Ireland does not need trains that actually travel slower than those 100 years ago, albeit only by a few minutes. The Cork train cannot travel as fast as it might due to various problems with the implementation of the service. We need to focus on delivery. I am not suggesting there have been no achievements but the level of achievement is nowhere near the standard required to maintain competitiveness in the economy.
In July the census will be published and later in the year all of the census information will be rolled out. I think this information will paint a picture of a new Ireland and where people are living, probably in increased numbers that we do not yet appreciate. This includes my own constituency. What sort of structures will the Minister use to process and utilise the census information? I hope we do not face a scenario where the Minister completes the processing of the statistical information and then ignores the basis for future planning offered by the census.
On public transport, the Minister is aware that the Transport 21 document made no mention of the word "bus". Does he intend to reconsider that aspect? In all our cities and towns — Cork, Limerick and medium size cities like Kilkenny — urban bus services will be required on a scale similar to that seen in every other European country. We must consider that. If the Minister is to reduce dependency on cars, it is not good enough to refer only to the greater Dublin area. There is no reason all our major cities and towns should not have an urban transport framework, preferably trains, but at the very least good urban bus services.
The Minister did not refer specifically to this aspect but it was mentioned in the ERSI review. What are the Minister's proposals on energy policy, which will be one of the key competitive constraints in the future and is tied in to the decisions made on transport infrastructure? We are aware that fossil fuels are running out. We are aware also of our commitments under the Kyoto Protocol and the cost factors in respect of oil and gas. Consumers have experienced extraordinary increases in prices in the past two years. These costs were major factors in the significant increase, to 3.9%, in the inflation rate for May. Can the Minister give us some indication on that aspect? How do we intend to have a conversation about energy policy as a key competitive factor in the Irish economy?
The report produced yesterday mentions pre-school education but it is not adequate. While pre-school and early school education are a concern of all young parents, it is women in particular who are affected. We must set a standard where a pre-school place will be made available for every child from the age of, say, three and a half. What are the Minister's aspirations in that regard?
I would welcome a detailed report on the implementation of the last plan because it is very difficult to follow up on it. The ESRI mid-term review gave a mixed assessment to the Government; it got about a 50% mark from the ESRI on its last performance. The former Minister, Charlie McCreevy, acknowledged that the mid-term review pointed to large areas in which there had not been completion.
To go back to the census and the spatial strategy, will the Minister use the opportunity of the national development plan to bring some coherence to the proposals on decentralisation? That is a conversation we should have at some stage.
I will address some of Deputy Burton's points. The mid-term review was in 2003 but a lot happened in 2004, 2005 and 2006. The Deputy asked for an updated plan. I gave it to her yesterday. It is called the progress on the National Development Plan 2000 to 2006 from the Department of Finance for this committee, which I have submitted to members. That highlights in great detail the many achievements and real progress being made in the implementation of this plan. The Opposition members may not want to refer to it in any great detail but that is a matter for themselves. I ask everyone who has taken an interest in this debate to read it and see the measurable improvements that have taken place, particularly in the area of public transport.
I have said we will need to continue with accelerated investment in public transport but one side of the prospective alternative coalition Government is telling me about value for money and the other side is telling me to spend as much as I can and forget about value for money. They will have to get their act together in terms of what they want.
The Minister need not worry. It is coming together.
The bottom line is——
The Minister should tell us about his achievements on broadband.
The Minister did not interrupt the Deputy.
I note the inconsistency in the approach from the economic spokespersons of the prospective coalition. One says I should spend as quickly as I can. Another wants everything to be appraised to the point where we will never get started on anything. The other spokesperson wants me to proceed as quickly as possible regardless. The 13 point plan we will get in the next election will not go into that level of detail but I want to remark upon it.
The second point is that it is a question of value for money, something on which Deputy Bruton and I will agree. We must ensure that we roll out and accelerate our capital investment programme and we have set out a framework in which to do that.
Regarding Transport 21, I made it clear that all the projects will be subject to cost benefit analysis appraisal, which is required. Some of them are of such a magnitude, even in European terms, that they will require it. We are setting out the direction in which we intend to go and have outlined the €34.4 billion we are prepared to allocate over a period of ten years, which makes up more than one third of the total public capital programme throughout that period to deal with transport infrastructure deficits in a timeframe that is realistic and in which we can plan ahead. Some years ago my predecessor introduced multi-annual capital projections. We did not even have that beforehand so we must be fair.
The position on energy policy will be brought forward by the Minister, Deputy Noel Dempsey, to Government shortly. That will set out the direction for our energy policy over the next 20 to 25 years and will involve incorporating the all-island electricity market, the question of interconnection and how we can ensure we have the most competitive means possible of electricity generation, recognising that we are an island market and that this is easier said than done. Policy will become clear in the coming months when the Government takes ultimate decisions.
We have spent €2.7 billion on public transport under the existing plan, which is 117% of forecast expenditure. We are spending more than we had allocated because of the priority we are giving to this area. We have seen major projects like the Luas light rail project in Dublin; the doubling of peak capacity on the DART line; the first tranche of 67 new intercity locomotive carriages delivered in July last year; the entire fleet is undergoing commissioning to gradually introduce it to service on the Cork-Dublin route during this year, culminating in an hourly service in both directions on that route by year end; and a contract awarded in late 2004 for 120 new intercity rail carriages which was extended in December 2005 to 150 rail cars. Those will arrive into the system in mid-2007 and will be the final phase of a complete revamping of Iarnród Éireann's intercity passenger services.
Under the rail safety programme, 760 kilometres of track nationally was relaid by the end of 2005 and all the major lines to the west have been resignalled. That is against the background when public transport investment in 1996 was zero, not €1 million or €2 million. So much for commitment to public transport when people had the opportunity to show it.
On the CSO figures, we will have the preliminary figures in July and they will feed into our policy formulation processes. It is important to point that out.
We have more to do on broadband, as we have said. Responding to market failure to provide broadband access to many parts of the State in 2002, the Government decided to target the widespread availability of open access, affordable, "always on" broadband infrastructure throughout the State. Total public expenditure in the BMW region to date has amounted to more than €70 million, 90 towns were selected for open access infrastructure and some €77 million have been spent in the south and east region. Some 69 towns in the south and east region with a population of 1,500 or more have been selected for infrastructure investment under the next phase of the metropolitan area network schemes. Those schemes were designed to support a national backhaul solution as the appropriate intervention to address market failure by bringing high speed fibre-optic telecommunication networks to new and existing broadband customers.
The availability of adequate bandwidth and of affordable "always-on" access to advanced telecommunications services is critical to Ireland's competitiveness in terms of attracting and retaining foreign direct investment and ensuring balanced regional development. It is vital to realising the opportunities presented by on-line provision of Government services. It is critical to unlocking the potential of information and communication technologies to address issues of social disadvantage and exclusion. Ensuring development of the national infrastructure that is necessary for the delivery of advanced telecommunications services is, therefore, a strategic priority of the greatest underlying importance to Ireland's economic and social development as an information society. We intend in the next national plan to continue with the significant progress that has been made in that area on the basis that we will have further progress. I believe those were the issues raised in the context of Deputy Burton's questions.
I welcome the Minister for Finance to this meeting of the joint committee. I compliment him on the detailed update document he provided to the committee on expenditure under the National Development Plan 2000 to 2006. By any standards, Ireland is in a stable economic position, given, as the Minister said, that there has been a 7% increase in economic growth averaged over the past five or more years, unemployment is at 4%, the Government debt ratio has fallen from 65% of GDP to 28% of GDP and we have had a budget surplus in eight out of the last nine years. That is an economic success in any terms, and the NDP has contributed enormously to that.
From the figures supplied by the Minister's Department, I note that €44 billion has been spent under the plan to date under all the headings that are important for the further development of this country. The list of achievements under it is impressive. As a Deputy and having been a member of this Parliament since 1989, I fully acknowledge the major success that has taken place in terms of how we have moved forward.
Our job today is to evaluate the plan of today, not that of 2002 or 2003. We are not talking about a mid-term review but progress on the plan to the end of 2005, a point missed in many of the contributions. The list of projects under the plan is impressive, on which this and the previous Government must be complimented. It is right that we should evaluate the plan and I hope to consider the next plan shortly, as that is the one we need to discuss henceforth. However, today we are dealing with a progress report on this plan.
Infrastructure development was mentioned, in particular the development of public infrastructure in terms of the road and rail networks. Some €6 billion has been spent on the national road network in the past five years and €3 billion has been spent on the development of our railways. The rail line from Athlone to Westport through County Roscommon had to be closed because of its deplorable state. The lines from Dublin to Galway, Dublin to Westport and Dublin to Sligo, the three main lines to the north western region, were upgraded, although some outstanding works in terms of signalling and carriageways have to be provided. Approximately €300,000 per mile has been invested in each of those railway lines. That is an extraordinary expenditure figure in less than ten years. That investment was made as a result of the publication of a safety report and the Government took decisions in 1997 and 1998 to invest in the railways.
Deputies representing Dublin constituencies may not be aware that many people travel by train from Athlone, Mullingar, and Longford every morning to work in Civil Service and other jobs in this city and they find that commute acceptable. However, many of them are on transfer lists for the decentralisation of jobs to various towns throughout the country and are only waiting for the call to transfer. In my town more than 200 people have put their names forward for positions to be decentralised there. An advance party of civil servants is due to visit the town in July. A site has been bought for the Land Registry offices, to which 230 people are due to transfer in 2008. Many people have contacted my office requesting that their names be removed from the list for posts to be decentralised to Athone and other towns and put on the list for posts transferred to Roscommon, but the union agreements do not provide for the making of such changes to those lists.
It seems that some people have a death-wish in regard to the decentralisation programme. They should talk to civil servants in their own constituencies who are keen to find new opportunity and locations. I have found a positive response to the decentralisation programme in the midlands region. The midland and west region will benefit to the tune of 1,500 extra jobs in the Civil Service, aside from the knock-on effect on the local economy in terms of family members moving to the regions to take up positions in the midland and western towns. Such decentralisation of jobs will relieve some of the pressure on Dublin. The Minister said 300,000 more people will live in the eastern region in the next number of years. That is all the more reason we should implement a decentralisation policy to ensure balanced regional development and that the current spatial strategy is continually updated. If a provision is set down in the spatial strategy today, it does not mean that provision should remain in place for the next five or ten years. Governments and Ministers must respond to new situations and that is the reason changes are sometimes implemented.
The increase in housing provision has been a major success. Almost 30,000 new houses were provided in the past five years under the local authority system.
I was spokesperson on finance in the Seanad when the national reserve pension fund was established and I would like to read some of the statements made regarding the fund at that time. There is almost €17 billion in that fund to provide for pensions into the future.
This national development plan and the Minister's update report are welcome. We should focus on the progress of the plan to 2005 because it is a success story. I would welcome a further input in regard to the new plan.
I must intervene at this point as a vote has been called in the House.
I would like to make a further point on the BMW region.
We have not concluded. We will suspend the meeting for the period of the vote in the Dáil and resume immediately following it when Deputy Finneran will be in possession.
Sitting suspended at 1.10 p.m. and resumed at 1.25 p.m.
I wish to comment on the investment in health services and the perception that there are major difficulties in the health sector. Obviously, there are problems in accident and emergency services and other areas that do not receive as much attention. Practices rather than lack of investment are causing the problems experienced. Under the national development plan, my county has seen a major capital investment of over €25 million in hospitals, homes and so forth.
I am not sure what the situation is nationally with broadband but over 70% of County Roscommon is covered. There is fibre optic cable in all major towns except one and that town is covered by wireless. There are pockets in areas of the county that do not have broadband but all small centres of population have availed of grant aid to install broadband and have been very successful. Perhaps, it is due to a lack of initiative in some areas. Broadband is very important and widely available in my county.
A total of €35 million has been invested in sewerage schemes in County Roscommon in the past five years. With regard to what happens in the future, the Minister dealt with the issue of child care in the budget. There is huge investment under the equal opportunities childcare programme and more spaces are being made available. We must continue to focus on the programme.
Two other issues should be mentioned. A national route that runs through the centre of the country, the N5, has not received the attention it deserves. It must be developed under the new plan. It runs through the counties of Longford, Roscommon and Mayo but is being dealt with in a patchy manner. There is a bypass of Ballaghaderreen but there are long stretches where other towns are not bypassed. It is interfering with development opportunities in Longford through to north-west Roscommon and into Ballaghaderreen, and right up to the west coast. The link between the N5 and Knock Airport has not been identified as essential and has not been given the full priority it should have in the transport programme announced.
I agree with Deputy Burton about rural transport, an area that should be focused on in the new plan. We should aim to have a proliferation of rural transport. Pilot schemes are currently working extremely well. There is a great opportunity for people to link into towns with the rural transport plans but they are all pilot schemes. We should do it on a more organised basis.
The national and secondary inter-county road networks need to be addressed in the new plan also. Inter-county networks are required independently of our national development plan. Many national roads will be completed under this plan and provision should be made also for inter-county road networks. The Minister's document stands up to scrutiny. The Minister, his Department and the Government deserve to be complimented on it.
I thank Deputy Finneran for his contribution on some of the issues he would like to see in the next plan. It is good to hear that people have ideas for the next one. Much progress has been made in ensuring that projects come in on time and within budget. There is no doubt about that. Last year, 17 of the 18 major road projects came in well on time and within budget. Since we did not have a real major infrastructural investment programme in the past, expertise has been built up within the agencies in terms of planning, design, cost and output, which have greatly improved. Building on those multi-annual capital envelopes, the proposed national development plan will provide a framework within which Departments and agencies can plan their investment strategies.
We have an enhanced focus on value for money. As regards the initiatives I have introduced, more rigorous capital appraisal guidelines have been put in place. We had initial difficulties in the first two years of the plan for 2000-06. All projects, including road projects, are now subject to appraisal. Projects above €30 million are subject to a full cost-benefit analysis. Other projects are subject to more proportionate appraisal, such as a multi-criteria analysis. We are very advanced in our discussions with the various interests involved in the move to fixed-price contracts. Earlier this week I had a meeting seeking to finalise some outstanding issues. The move to fixed-price contracts will result in a shifting of risk to bring cost certainty. We will pay for that certainty up front, rather than having the idea of price variation clauses dominating outcomes at the end of the process.
Value for money and cost-effective delivery of public capital projects is a major motivating factor behind that initiative. New standardised public sector contract terms for contractors, conditions of engagement for construction consultants, and a supporting guidance framework for use by the public sector will be introduced for all public bodies as soon as I finalise those discussions. So there is improved accountability. Individuals will be appointed as project managers for all projects above €30 million, with responsibility for monitoring and managing project progress. Progress on capital programmes in major projects will now be reported on regularly to the board of agencies, the management committees of Departments and annually to the Department of Finance.
In the next development plan there will be annual reports and transparency for people to discuss the progress we are making here in the Oireachtas and elsewhere. I do not accept the continual contention that we are not getting value for money and that everything is wasted. That is put about all the time but we should try to make our discussions on these matters a bit more sophisticated than that. It does not serve any purpose to have exaggeration on the one hand or distortion on the other. I am not complacent about the question of ensuring that we get value for money. It motivates all of what we try to do in the Department of Finance, to make sure we get outcomes which are commensurate with the efforts going in. We have produced enhanced criteria in that regard.
We will take on board what Deputy Finneran had to say about broadband and examining the provision of further road infrastructure.
I thank the Minister for attending the committee. I wish to address a number of items, including social inclusion, child care and the elderly. I refer to the Minister's progress on the National Development Plan 2000-06. I commend him for establishing the Office of the Minister for Children in December 2005 and for giving that position Cabinet status. The Minister of State, Deputy Brian Lenihan, has responsibility for all items relating to children under 16. He is entitled to attend all Cabinet meetings. This is a tremendous five-star initiative.
As the Minister knows, I have been an advocate for child care since being elected to the Seanad. I attended public meetings before I produced my document last year and I also went to crèches in the mornings. The overriding concern of parents, rich and poor, in both community and private crèches, is the cost of child care. It is still the major issue. I want to ask the Minister about the €1,000 promised eight months ago in last year's budget. When will the first payment be made? If the cost of child care is still too expensive and parents are not receiving €1,000 per child under six, as a public representative my responsibility is to help women to get their small children minded so they can participate in education or employment. Either way their standard of living will improve over time. I am wondering when the women who were promised €1,000 for every child under six will receive their first payment.
It was an innovative initiative to allow child minders to mind three children in their homes earning up to €10,000 tax free. It appears, however, that if they earn €10,500 they must pay tax on the total. As a business person, I feel that if a decision is not working we must change it fast or we will be gone. Is it correct that if such a person earns over €10,000 they must pay tax on the whole figure? There are an estimated 37,000 child minders in the country, of whom approximately 1,200 have taken up this initiative. I was impressed by this initiative because we need to regulate child minders, while not over regulating them. We need to know who is minding the children and the quality of the minding. This initiative was most innovative. It brought the childminders under the child care county committees. I thought it was brilliant, but it is not enticing them because tax applies to earned sums over €10,000. Have I explained myself adequately?
Yes.
Those are the two points on child care. My other point relates to the issue of changing demographics raised by the Minister in his speech. As an advocate already for child care, I am now an advocate for the elderly. On costs, the Minister mentioned "increased pressures across a range of age-related expenditure categories". In 1988 the then Department of Health, under the late Dr. Joe Robins whom the Minister will remember, chaired a committee on the future for the elderly. That document states what was, and still is, Government policy, that the ideal is to keep older people in their own homes backed up by community care. As the Minister will be aware, the tax incentives have gone into residential care and there are not enough residential care places in the public sector for older people. While we know Government policy is to keep people in their own homes, we must implement the plans so that they can do so for as long as they wish, then move into a supportive structure and then into intensive support. It is our policy but it has not happened that way due to the tax incentives.
I have visited private residential care homes. While not wishing to make a broad brush statement, many of them are located in total isolation from a town or a community and it is difficult for people to visit the residents. There is not much privacy for the people in these private homes. While I do not wish to digress, I suggest the Minister provide that every county development plan include a six-year strategy on the location and development of housing with a degree of community care for older people such as that in Mulranny. Mulranny provides independent living, semi-independent living and intensive care within a community near relatives and relations. I hope my points are relevant to what the Minister is seeking from the committee today. I thank him and compliment him on what he is doing.
I welcome the Minister. It is good to debate the proposed national development plan and that the committee has as broad an input into it as possible. It is important that all sectors of the community have an input into what is happening and review the deficiencies in infrastructure right around the country.
I was interested to hear Deputy Finneran speak of decentralisation and all the civil servants who are currently commuting from Mullingar, Athlone and Longford. Will the Minister now need to review expenditure on the railway? If those trains will be empty when those civil servants stop travelling, will we need to review expenditure on those rail services and perhaps rethink what we are doing? I hope not.
Will that be a rainbow policy? There was nothing west of Mullingar or Athlone when they were last in power. They closed the railway lines and put cattle on the tracks.
The good Deputy Finneran is a busy man. Indeed, his party closed it down. It was during his party's time in office that the Athlone to Mullingar railway line closed and that is why I want to speak to the Minister about it.
The Minister made reference to the gateway towns. He will be particularly familiar with the gateway towns in the midlands, Tullamore, Mullingar and Athlone. Infrastructural cohesion between those three towns is important. As anybody who passes through the midlands will be aware, there is not a decent network connecting the three towns at present. While one can use rail between Tullamore and Athlone, one cannot use rail between Mullingar and Athlone, although there are such proposals coming forward. The reopening of the railway line from Mullingar to Athlone is not included in Transport 21. Is that programme a closed shop? There is a proposal on the line to which I refer coming forward shortly. Is it possible to reopen that package for additional projects with many resulting benefits?
There is also a need to upgrade the roads between the three towns concerned. There is not a decent road network between those towns and there is no public transport system either. We in Mullingar are linked to Tullamore hospital for many services but there is not a public transport system to get one from Mullingar to Tullamore. This is a major problem. In the long-term context of infrastructural development and the already published network of gateway towns, we need to take a particular interest in those matters and bring forward proposals.
I am a little worried by the Minister's statement that individual projects will not be identified for funding in the next national development plan, which will be published in November next. I can think of many reasons that this might be the case. With an election in the offing, were the Minister to publish a list there would be pressure from people asking why this or that project is not included. There will be several announcements around the country that these are some of the projects which will be included and some might be added. There will be announcements like those from the then Minister for Education and Science, Deputy Woods, in the run up to the last general election, when he issued letters and made announcements about schools. As the Minister, Deputy Cowen, knows well, Deputy Woods made written commitments to schools before the last general election which would use up a total of three years' funding under the school infrastructural development programme. Many of those projects have not happened yet. There is one in my area where the then Minister, Deputy Woods, was photographed with a certain individual in the run up to the election, announcing that the money had been secured. There has not been a sod turned yet. That was outrageous. The Minister might comment on why he will not name the projects when publishing his proposals in November next. He might also comment on the Mullingar railway line.
Price fixing is another matter I want to raise. The Minister asked us not to condemn projects in the context of price fixing, and I do not do so. For the future, we needed to tie down the cost of projects and ensure they will be delivered on time. While I welcome the Minister's comments about 17 of 18 projects, there was a significant need for it. For example, the contract price for the widening of the Dublin end of the Naas dual-carriageway was in the region of €6 million. When the project was nearly finished there was a payment of approximately €13 million and I understand there was negotiation for a further €15 million. This would suggest that the project, having been initially priced at €6 million by the contractor——
Which project?
The widening of the dual-carriageway.
The Newlands Cross to Naas project.
The widening of the dual-carriageway on the Naas Road out of Dublin.
The first phase.
Yes.
From the Red Cow Inn.
A third lane was added along there. I understand that the initial contract price was €6 million. I do not know what the final cost is, but I understand it is more than €20 million. There was a need to tie down costs and ensure a price freeze. In that context, I welcome what the Minister has said.
My final point relates to the major problem of rural transport. The Minister will be aware of the problem with regard to school transport. Some of the buses used are appalling and it is awful to think that our children get the leftovers. The same type of system operates for many of the rural transport initiatives, where clapped out buses are used to carry elderly people to day care centres, etc. This is not good enough. Yesterday a lady phoned to tell me that windows could not be opened on the bus on which she travelled last week, nor could the door be left open for fresh air — for safety reasons — despite the outside temperature being 25 degrees and a damn sight hotter inside. Elderly people cannot cope with such extremes. The fleet used for school and rural transport needs to be re-examined, as do transport needs generally in these areas.
It will be helpful to have the population census and the national spatial strategy in place prior to working out the terms of the national development plan. The current national development plan predated the national spatial strategy. I felt that was a missed opportunity, but that is how it worked out.
The census will give us some indication of how the national spatial strategy has panned out. If we are to have investment, it cannot be exclusively in the areas to which it is envisaged the population will shift. My area is a case in point. There is huge development pressure in the area, but a lack of infrastructure to cope with it. We must meet both needs.
In the area of sanitation, for example, the Liffey provides the major part of the water supply for not just County Kildare but for most of County Dublin and parts of Meath and Wicklow. There are significant abstractions from the river. The under investment is clear. When, for example, a water pipe bursts, a whole housing estate will be cut off for days. This is a particular difficulty in areas with a high growth level where the delivery of infrastructure lags behind. There is need for a serious look at the national spatial strategy to decide how funding will be earmarked for essential developments nationally, not just for the BMW region.
We can look again at sanitation services with regard to current and capital funding. Between 2005 and 2006, Kildare County Council spent an additional €1 million on buying water in and on upgraded sewage treatment plants, which are expensive to run. This is just a small sum, but it demonstrates that when there is a capital spend without a current spend, we run into serious difficulty. Many services are at breaking point because the current spend cannot cope when there is capital investment. This is particularly serious in rapidly developing areas.
When we consider that one third of rented properties are in receipt of rent supplement, it makes sense that we should accelerate the building programme for social and affordable housing. The payment of rent supplement means we are already picking up the tab. Essentially, the supplement keeps rents high for investors and fails to assist first-time buyers because of the supply of housing in the market. There is an obvious advantage to increasing the supply of social and affordable housing, even if we do not just look at it from the purely human point of view.
Many of the public transport provisions that will be in the national development plan will also be in Transport 21, which contains many good initiatives. The difficulty is, however, that it is taking a long time to implement these initiatives. For example, the interconnector between Heuston Station and Spencer Dock will carry an additional 75 million passengers per year when constructed. This important infrastructure will make a significant difference in the network, but it will take over ten years to put in place. I noticed from the Minister's speech that pensions were mentioned first, followed by public transport. It was not lost on me that some of us feel we will be on pension before the interconnector is in place. Given the significant advantage some of the projects in Transport 21 will bring to the public transport system, it would be worthwhile accelerating some of them. Transport 21 is a critical part of our infrastructure programme.
I agree that the tax disregard in respect of income from child care will not be an incentive for people. I also agree that child care cannot be done on the cheap. The issue of monitoring is beginning to crop up more often. Scotland, for example, has a system in place whereby if a childminder minds a child who is not related to him or her for more than two hours per week, the minder must be registered and undergo a vetting process. This provision is absent from our child minding as opposed to child care arrangements. We may well be storing up problems for the future if we do not put a proper regime in place to look after the security of children.
Parents will move away from our arrangements if they see evidence of difficulties arising. Our child care initiatives in the current development plan mainly provide for the area of social inclusion. I was at a breakfast in town one morning where a senior official from an internationally recognised firm spoke about the three most important issues it would have to deal with in the next ten years. The work-life balance, including child care and child minding, was one of those issues. This is because the firm sees valuable members of its workforce scaling back on the number of hours they work or taking leave of absence for a number of years because of critical child care responsibilities. This issue must be given significant attention and must be one of the key issues addressed in the next development plan. If we are to sustain the current rate of employment of women who are at the age at which they tend to have young children, we will have to ensure that support services are made available.
I would be concerned if the new national development plan was to lead to an acceleration of road tolling. We are seeing significant rates of diversion through some villages which have been bypassed and which expected not to have as much traffic. It is obvious that such behaviour will increase accident rates. In such circumstances, bypasses do not achieve what they were intended to achieve. We need to consider the problems caused by all dimensions of this phenomenon. I refer to increased insurance costs, increased accident rates and increased congestion in villages, for example.
I invite Deputy McGuinness to speak briefly before the Minister leaves to go to a meeting of a Cabinet sub-committee.
I welcome the Minister, Deputy Cowen. I am pleased with the work that has been done on the issue of value for money. Perhaps the debate that has taken place on that issue has been driven by the work of the Committee of Public Accounts, of which I am Vice Chairman. We need to continue that debate if we are to ensure that the value for money flag is firmly raised over this House. We should send a clear message to those in the private sector who will deliver these projects that we are as interested in business as they are. We have to make it clear that we intend to gain value for money for taxpayers as this scheme is rolled out. It would be wrong of us not to insist on a continuation of the debate I have mentioned. As the funding under discussion is distributed, we will have to look at how value for money is being achieved. The private sector will have to deal with new issues and new dynamics in that respect. The management structure that is put in place to oversee the expenditure of these moneys will need to be flexible in order that we can adapt to the changes which are made in the marketplace and ensure that value for money continues to be achieved for taxpayers
We have had the debate on this issue, historically, and we have dealt with it. We now need to focus on where we will go in the future. I am glad that there will be a Dáil debate on these issues in the context of the annual report. When one reflects on the spending of that money when the projects were being rolled out by Departments, State agencies like the HSE and local authorities, one has to say it is obvious that the expertise and management skills needed in the various bodies were not available. There was a weakness in the system. We need to continue to sharpen our edge when we make expertise available, as required, when the new range of projects is being delivered throughout the country.
I would like to discuss a few key issues, such as housing and the HSE. We will not have sufficient funds for the roll-out of social and affordable housing as long as we continue to increase rent allowance payments. We need to wean ourselves off the use of the rent allowance system, which cost approximately €5 million in the late 1990s but now costs more than €500 million. More local authority housing is needed. I welcome the recent allocation of a substantial amount of money for such housing, but we need to do more to ensure that local authority houses are delivered to people on the housing list in order that rent allowance can be taken out of the market. The cost of rented property increases when rent allowance increases. A similar argument can be made about the HSE and the payment of nursing home subventions. As we pay higher subventions, the subvention rates of the various nursing homes increase dramatically. The only way to deal with that is to make more public beds available within the system. If we are to improve the delivery of projects like this within the HSE and local government, we will have to focus on our management structures and the need for expertise. I hope we can trigger a debate on the issue of how we manage the Civil Service and the public service as a whole. Is new expertise being introduced to the top levels of public service management? That issue has to be addressed in the context of the expenditure of a sum of money like €35 billion.
I propose to consider the issue of social inclusion. Many educational projects, some of them in my constituency, have been funded under the national development plan. For example, the From Three to University programme is helping to break a cycle by encouraging people to go to primary and secondary school, providing after-school classes for homework, etc., and getting more people from marginalised or dispossessed communities to participate in second level education. Such people have to be encouraged to go to third level education. The only way to do that is to ensure that the necessary funding is provided for outreach centres. NUI Maynooth is organising valuable projects in Kilkenny and Wexford. If we do not expand such projects so they cater for those who leave second level schools with the necessary qualifications to go to third level colleges, we will lose them from the system. Such people have a right to education. We will get value for money if we expand the projects in question, which should be easy to achieve in our information-based society, with the aid of information and communications technology.
The model of best practice that has been developed by NUI Maynooth needs to be funded, rolled out and encouraged to grow throughout the regions if we are to deal with an issue that is arising in certain areas. There is a demand for a university in the south east. I accept that a fresh campus will not be developed in the region to meet that demand. If we get a virtual university, however, whereby institutes of technology and universities are encouraged to deliver their courses locally, a wide range of third level courses will be available. That can be achieved through collaboration with the existing institutes of technology and universities. They should be encouraged, if not forced, to engage in such collaboration, with funding attached. If a Department is achieving value for money and comes in under its budget, the balance of its funds should be used to deliver a wide range of services to the public from the front line. Similarly, we should reward universities which achieve value for money and demonstrate where their funds are being spent by returning the surplus moneys to the system.
I will speak about transport. I support the notion that there is an absolute need to develop proper inter-urban routes between this country's centres of population. As we invest funds to that end, we have to ensure that the relevant agencies and Departments are capable of meeting the challenge of spending money in a cost-effective manner that will have a real, tangible and positive effect on the lives of people in rural Ireland. It is particularly important for that to be done at a time when we are trying to develop hubs, etc., in the regions.
We have invested so much money in broadband that there is a mountain of unlit fibre optic cable in this country. The metropolitan area network is simply not being used. Local authorities are not using it. There is no backhaul. We helped the ESB to invest in its "figure-8" network, but it is simply not being used because it is too costly. The Government is helping to invest taxpayers' money where it is needed in these areas, but those in "the last mile", as it is known, within the broadband infrastructure will have to be forced in some way to roll out that broadband throughout the regions. That is not happening, however. We are not failing them. The companies which are delivering to the market are not delivering at the required speed. They need to be tackled as we consider how money is being spent. They are taking a piggy-back, in a commercial way, on what is being spent. Much more focus is needed in the context of management. I would like that to happen in the context of this committee, or a debate in the Dáil. My views on this issue differ from those of many other people. I had an input into the work of the Committee of Public Accounts on this matter and the report that was produced by Deputy Rabbitte recently. The report should be re-examined. There is huge scope for improving our approach to this kind of expenditure, but the Committee of Public Accounts should have a role in that regard.
I must conclude the meeting now. I apologise to Senator Phelan, but the Minister is late for a Cabinet appointment.
What is the point of coming to this meeting if my questions are not answered? I have been here virtually since the start of the meeting.
Perhaps the Minister will come to a future meeting of the committee. We lost 25 minutes from the meeting because of a vote.
I will respond if there is just one more speaker.
I want to raise a couple of issues. I concur with other speakers, including Senator White who raised the care of the elderly. It is crucial that the number of public places should be increased and the recommendations in the new plan implemented.
Two areas in which the Government has failed miserably in terms of future economic development are energy policy and broadband. The Minister noted that the Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, will publish an energy policy in a month or two. Late is better than never but an energy policy should have been produced at least 12 months ago, if not a couple of years ago. All businesses and enterprises face problems in the area of energy sources and costs and the new national development plan must focus on this issue.
Deputy McGuinness discussed the issue of broadband, which has been an unmitigated disaster. Large parts of the Carlow-Kilkenny constituency, specifically south County Kilkenny where I am from, have no broadband coverage and major towns and villages are bereft of coverage. As Deputy Burton stated, Ireland was at the cutting edge of broadband delivery in Europe just a few years ago but is now at the bottom of the European league. What has happened in the meantime? Investment has been made but we have failed dramatically in the area of the local loop, on which urgent action is needed.
There is a tradition in all aspects of the public service that the squeaking wheel gets the oil. In my case, this has been most apparent in the treatment of my local hospital, St. Luke's Hospital in Kilkenny, which has provided a fantastic service over the years but has not received funding commensurate with that allocated to other local hospitals. We must focus on funding and developing those aspects of the public service which work well, rather than throwing good money after bad in trying to solve persistent problems.
Several members referred to recent improvements in rail services. To take an example of a problem with rail services in my area, funding was provided under the national development plan for a new early morning route between Waterford and Dublin. This route traverses my area, in which many public and civil servants working in Dublin live, but trains do not stop in Thomastown railway station. If they stopped for a few moments in the town many public servants would be able to get to work before 9 a.m. I pleaded with Iarnród Éireann to accommodate this group and others who wish to travel to Dublin. What is the point in having a service if the train does not stop in an important station and I and the many people who queue up outside my office cannot use the service? There is no point in providing a facility unless it is available to those who want to use it.
We have had a wide range of contributions from eight or nine speakers. As the Minister must leave the meeting, we will allow him to make a final comment. It is then a matter for the joint committee to draw up a submission.
Apart from detailing problems members may have, the joint committee's task is to set out the priorities it wishes to have included in the next national development plan. It is up to members whether they take up this opportunity.
On the points raised, to take as an example the issue of environmental services — Deputy Murphy and others raised water quality — €2.7 billion has been invested in environmental infrastructure projects in the course of the current national development plan. This includes completion of 334 water service projects, comprising waste water, water supply and infrastructure management and rehabilitation. Was this a good investment and, if so, why? It was a good investment because in 2000, before Ireland undertook the investment, the country was only 25% compliant with EU waste water treatment directives. Compliance has since increased to 90%. While we obviously want to reach a compliance rate of 100% as quickly as possible, these figures indicate what can be achieved when one takes a strategic approach.
The sensible approach is to outline, generally in a plan, the various areas of expenditure rather than itemising every individual project for the following seven years. One draws up a strategic document in which one highlights and prioritises expenditure. Not everything can be a priority. We will do this in a way which allows people to see the direction the Government wishes to take for the national development plan. The allegations of Machiavellian thinking are ill-founded. We are not yet in a centrally planned economy, although that will change if Deputy Burton becomes Minister for Finance.
We all attended the meetings held as part of the Government's roadshow on the previous plan.
This is the oldest trick in the book. I listened in silence for an hour to contributions from Deputies but was interrupted before reaching the end of my fifth sentence. It is unbelievable. It is always the same old story with Deputy Burton. Empty vessels make much noise. I was making the point that when one takes a strategic approach——
It is a pity the Minister is unable to answer the questions.
Deputy Burton should allow the Minister to conclude.
The problem is he does not appear to know his stuff and has no vision or ideas. He has engaged in nothing more than name calling.
The Minister is caught for time.
In that case, he should not believe he can be provocative and then walk out the door without reply.
I will answer all the questions. If members wish to interrupt me every time I open my mouth, that is fine but not sensible. I listened respectfully to everyone else and ask others to reciprocate. The normal courtesy should apply.
On Deputy Paul McGrath's remarks on the gateway, a particular issue arises for the midland region because it does not have a natural gateway with sufficient critical mass. This is one of the reasons the Government decided to try to work with a Tullamore-Mullingar-Athlone axis. Major challenges lie ahead and, as I indicated, we need to avoid localised mindsets if the job is to be a success. This is a particular challenge for the midlands because all the other regions have a natural gateway on which investment can be focused. Certain issues will, therefore, need to be addressed. One of the important recent developments was the decision by the county managers in Westmeath and Offaly to commission a report from Indecon economic consultants. This report, which is imminent, will set out the challenges facing the region and the priority issues we need to address to try to make the gateway idea work in the midlands.
Transport 21 provides the framework for the transport investment programme. From the point of view of the midlands, I consider the road network to be far more important than the rail network, given trade patterns and commercial realities in the region. For this reason, the priority for the midlands is to improve synergies in the road network. I answered that specific question on the basis of the accusation that I am not answering any questions.
The issue of child care programmes was raised. As members are aware, this area is covered by four operational programmes, namely, the economic and social programme, the human resources programme, including education and training, the productive sector which deals with industry, and the social inclusion operational programme which includes RAPID, CLÁR, child care and so forth. We have made significant improvements in child care provision from the standing start in which we found ourselves at the beginning of the decade. We need to continue to make progress, including through fiscal policy which we will use as a means of generating further supply as quickly as possible. Let us wait and see if this approach works.
The idea is not to create a situation where people in competition with the formal child care sector are getting the benefits of the exemption for the purpose of having a parallel business which does not take on the same costs or inputs required of the formal sector. The reason one would not go beyond the €10,000 threshold is to keep it informal and localised and not create a second-tier formalised child care system. This is a serious contribution to trying to meet the various demands of parents, which are different from family to family, let alone area to area, by means of a multifaceted approach. By virtue of the provision of that initiative, flexibility is provided in the system. In general, the question of how we continue to provide more child care places will be a feature of that operational programme and we will take account of that in the formulation of the plan.
Deputy McGuinness's comments on the question of education and outreach were interesting. I met with leaders of the institutes of technology formally in this context to discuss with them how those institutions in the regions can be not only economic drivers but also, as the Deputy stated, drivers for enhanced social inclusion, greater levels of participation and continuing lifelong learning. The aim behind the strategic innovation fund that I introduced in the last budget is to avoid third level institutions being stand-alone operations rather than collaborative networks. Over the next five years it will provide funding on a competitive basis according to criteria which encourage and incentivise collaboration, modularisation and lifelong learning.
The intention is to modernise the university and institute of technology sector by means of an approach which is all about teamwork, avoiding duplication and getting specialisation into the system. This is what the leadership of these academic institutions have sought. I believe the response is evidence that this was a most important Government initiative in the last budget. That will form part of the wider programme for education in the future, as research and development is made a central part of our economic development agenda.
In the coming weeks we will see how the Government is planning strategically in that area, and that will form part of the National Development Plan 2007 to 2013. Education, research and development, how we build on the outcome of the recommendations of the small business forum, how we build an SME sector and make it more competitive, how we engage in technology transfer, how we upskill our workforce; these are all part of a strategic approach that is all part of the same agenda. The O'Driscoll report calls on us to pick winners in industrial terms by internationalising Irish business and not simply depending on international investment strategies. All of that will be part of the Government's thinking in the future. The central role that educational institutions play nationally and especially in the regions is a point that is well taken and one on which I hope we can further reflect based on the contributions made here today.
In the 2000 to 2006 plan we have spent €8.5 billion on social and affordable housing. Between housing starts and acquisitions, this has meant over 24,500 units throughout the country in that five-year period——
I thought it was 35,000.
——together with 8,000 houses in the voluntary housing sector since 2002.
I thought that was 12,500. The document is most interesting but the crucial element that is missing is that it does not compare what was delivered with what was the target. The local authority sector was to build 35,500 houses and an aggregate of 12,500 houses were to be built by the voluntary sector. The figures the Minister has quoted fall short of that. The Minister should advert to the fact that we did not meet the target.
I will, but let me say that we are not at the end of the programme. This is a progress report on the programme.
It is six months from the end of the programme.
I am giving a progress report of how things stand. I can refer to the 90% increase we got in environmental services. I can refer to——
My point is we need to see that data if the Minister is to provide a realistic appraisal of where we are at.
The Deputy did not advert to the data I produced for the committee today.
That is because it never once compared performance against target.
It was not referred to whatsoever. It is my job to restore some balance into this argument in which Deputy Bruton has suggested no progress, or insufficient progress, has been made.
I am not suggesting that.
Deputy Bruton is suggesting that.
The Minister is completely distorting what I have said.
I am not distorting it.
The Minister is distorting it.
I listened to what Deputy Bruton had to say——
Then the Minister proceeded to try and distort what I said.
I am not distorting what the Deputy said.
I am not going to tolerate that.
The Minister should be allowed to speak without interruption.
I have introduced value for money initiatives under this Administration and I stand over them.
The report does not refer to either the cost or the targets——
The Minister did not challenge anybody.
——that were set. It does not report honestly on the performance of the NDP.
The Minister did not cut across anybody.
Does anybody know what is the purpose of this exercise?
I do not know what is purpose of the exercise.
The Minister is all over the place. We are not getting reasoned responses to the reasoned points we put forward. We are very frustrated with his response.
We have examined the report on housing provision.
There is almost nothing in that report. I went through it in detail.
It can be compared with the original plan.
There is nothing in it. It is a disgrace.
The most recent expenditure data on the national development plan relate to the period to the end of December 2005. The complete picture of extra expenditure on both regions over that committed in the lifetime of the NDP will not be available until the full year expenditure data for 2006 are analysed and reported in the spring of 2007 meetings of the operational programme monitoring committees, and when the co-funded measures under the NDP achieve their full entitlement to structural funds by the end of 2008, which is the timetable set out in the structural fund regulations. That is the factual position.
However, to return to the point, Deputy Burton likes to throw remarks around. I have looked back to see what her contribution contained. Her questions related to public transfer and broadband, both of which I answered. The Minister, Deputy Noel Dempsey, is before a committee of this House today going into some detail on the progress or otherwise which we are making on broadband. Some of Deputy McGuinness's points on what he has referred to as the last mile are relevant in this respect. Let us hope that we will see a more co-operative policy when the acquisition of the present company is completed than was previously the case.
The point is still well made that further progress remains to be made in this area. I am prepared to come before the committee at any time at our mutual convenience to discuss these matters further. The intention was to discuss the next development plan. Speakers have made their contributions which they consider relevant. I welcome any report or submission members may wish to make. In the meantime, I will defend the Government's position on this plan and the formulation of the next one.
I draw this aspect of the meeting to a conclusion. I thank the Minister for his time. We have been here since 12 p.m., although I accept that business was interrupted for a vote in the Dáil. Before members leave, we have to deal with one or two important items under correspondence. The matter is relevant and members will wish to be informed about it. I thank the Minister and his officials for attending. The correspondence is being circulated among members. This will only take a few minutes.