Dáil Éireann Debate, Tuesday - 10 December 2013
225. Deputy Kevin Humphreys asked the Minister for Public Expenditure and Reform the average job creation potential for every €1 million in Government capital spending; and if he will make a statement on the matter. [52961/13]
View answerA 2009 survey, carried out by the Department of Finance, found that the labour intensity of capital projects generally falls within the range of 8 to 12 jobs for every €1 million invested. While this estimate for labour intensity is used as a general rule of thumb, it is important to note that the amount of employment generated by capital expenditure depends on how that expenditure is invested. For example, the purchase of new rail rolling stock would typically generate little direct employment in Ireland as such stock is generally produced abroad. Furthermore, different types of public construction project have different levels of labour intensity. For example, smaller scale projects such as school building and repair, or smaller local and regional road-works, tend to be more labour intensive than major national infrastructural projects.
The Exchequer capital framework for the period 2012 to 2016 was set following a Government-wide review of the public capital programme conducted in 2011. The focus of that review was the identification of infrastructural investment that can aid economic growth, generate sustainable jobs in the medium term, and address urgent social requirements. Much of the capital programme for the five year period of the Framework is geared towards smaller, more labour intensive projects. It is also noteworthy that investment in enterprise supports has the highest direct employment impact. Accordingly, the capital Framework made a point of protecting supports to the enterprise sector primarily through agencies such as Enterprise Ireland and the IDA.
Since the capital plan was launched in 2011, the Government has been able to announce a number of increases to its infrastructure investment through the introduction of a new PPP pipeline and the use of the proceeds from the State asset and Lottery licence transactions. This additional investment is expected to support significant numbers of jobs across the country. The previous analysis of each sector indicates that the investment in the PPP Pipeline may support in the region of 13,000 direct jobs and many more indirect jobs. In addition to this, it is envisaged that the additional Exchequer funding of €150 million, which I announced in June of this year, can support up to 3,000 jobs. These initiatives will of course also create much needed social and economic infrastructure and aid economic recovery. The Exchequer projects, in particular, involve mostly smaller scale capital works which are known to be labour intensive.
It is my intention that a review of the public capital investment framework will be undertaken in 2014 in parallel with the Comprehensive Review of Expenditure. Following this, a new five year capital envelope will be set. Of course, employment creation will be a key consideration in the setting of the new envelope.
