Dáil Éireann Debate, Tuesday - 28 November 2023
30. Deputy Bernard J. Durkan asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the extent to which he has identified issues likely to impede progress on the delivery of the national development plan; the provisions he has put in place to offset these problems; and if he will make a statement on the matter. [52294/23]
View answerThis question seeks to ascertain the extent to which the Minister of State can and has identified potential blockages to the onward progress of the national development plan, which should take precedence, and the extent to which he has identified proposals to remedy them.
The Government has committed to €165 billion in capital investment through the NDP, which was published in 2021. As a percentage of national income, annual capital investment is now among the largest in the EU. In 2023, almost €13 billion will fund vital infrastructure in areas such as housing, transport, education, enterprise, sport and climate action. Achieving value for money and reducing cost and schedule overruns is a vital part of delivering the NDP. However, the Government and I acknowledge that the significant investment under the NDP does not come without delivery challenges.
As the Deputy knows, delivery of some NDP projects has been adversely impacted over the past three years as a result of the pandemic and the war in Ukraine. I am also acutely aware of the challenges the construction industry has faced with material price inflation, labour supply constraints and supply chain disruption. As a result, in order to safeguard the delivery of key NDP projects, in January of last year my Department introduced measures to address inflation for new contracts and tenders. Furthermore, in May 2022, a new set of measures to apportion additional inflation costs between the parties to public works contracts was introduced. These arrangements were then made permanent in July of this year, which allow for more appropriate risk sharing in the delivery of public works contracts. Nevertheless, no one is in any doubt that the need to ensure timely project delivery must be part of the Government’s focus to respond effectively to the pressing challenges of our time, particularly in areas like housing, health and climate.
The renaming of my Department as the Department of Public Expenditure, NDP Delivery and Reform has brought about a greater emphasis and mandate for the delivery of the NDP. In light of this new role, a review of the support structures and levers available across government to maximise delivery of projects was undertaken. As a result, a series of actions and reforms were identified as priorities to improve delivery of NDP projects, including reducing the administrative burden on Departments charged with infrastructure delivery. Earlier this year, I secured Government approval for six priority actions. This package represents a fresh approach to securing delivery as part of my Department’s enhanced remit around the NDP. I am confident that the combination of these actions outlined will boost the delivery of the critical infrastructure we need to support a growing economy and higher living standards for everybody who lives here.
I thank the Minister of State for that reply. Given the extensive nature of the national development plan, there are ample opportunities to slow down the plan depending on in whose interests it might be and there are ample opportunities to sidestep actions that might slow down the plan. The question to which I am seeking an answer is whether anybody has undertaken to identify those issues that do not clash with each other or impede the other and what action can be taken or has been taken to remove them from the role whereby they are likely to impact against the delivery of the entirety of the plan. The last part of the question is to ascertain if a priority list has been drawn up that must be passed within a specific time.
Earlier this evening I spoke about the ESRI review. Part of the renaming of the Department to include NDP delivery involves asking an external agency to look at the exact question the Deputy asked, namely, what the barriers are to NDP delivery. We have asked the ESRI to assess what constraints we are reaching, what capacity constraints we have, what changes we might need to make and how to avoid simply adding to inflation by spending more money. We have received that report from the ESRI. It is being assessed at the moment and we will publish it shortly. The focus on this is going to be things like changing the public spending code to make it less bureaucratic or faster to make decisions but also identifying which areas we can invest in that do not add to inflation, how we can avoid a skills shortage and how we can avoid putting money in and not getting a return.
I appreciate the Minister of State's candour. However, I get suspicious at times like this because hidden within the answer is a potential code to the effect that it will be decided in the interest of public spending, inflation etc. Some of those issues can also impact on inflation in a positive way from the point of view of the Government. There might be a possibility of identifying them with a view to picking out the ones that are most fundamental and necessary in the shortest possible time and ensuring there are no blockages like the Ceann Comhairle and I had in our county some years ago when a tiny bird or animal impacted on the Newbridge bypass and cost €25 million. It achieved nothing that I could see because he was only a small guy called the vertigo inquisitor. I do not know what that sounds like but I can only tell the Minister of State that I was on the local authority at the time and it caused some eyeballs to be raised, as the Ceann Comhairle well knows.
There is nothing wrong with the Deputy's memory. Deputy O'Sullivan has a brief supplementary question.
This relates to the measures the Minister of State outlined in his initial response that were taken to combat spiralling inflationary costs in the past year or 18 months. I think back to a project in my area. I will not identify the school but it was a school contract where the legislation provided for schools and other bodies to engage voluntarily in the process surrounding revised costs and the spiralling of inflationary costs for projects. Has the Department done any analysis on the number of schools or other public bodies that did not engage with that or did not engage with the developer, as in this case? I know it has turned one specific contractor in my part of Cork off doing any public contracts for the foreseeable future. Has any analysis been done on that?
I will start with Deputy Durkan. Certainly, there are some types of investment that are deflationary, such as providing more housing for example.
The delivery of the projects can help reduce inflation. There is a wide variety of inflationary effects depending on what you are investing in, and how much labour is involved is a part of it. That is the analysis we are looking at.
I think Deputy Durkan referred to what our previous Taoiseach, Bertie Ahern, called the swans and the snails interrupting infrastructure projects. In fact, we are looking at a much broader range of things, the public spending code and other constraints among them.
To turn to Deputy O’Sullivan, we changed our inflationary system to share the risk between the contractor and the person ordering the work. The reason for that is certain critical projects were likely to be unprofitable, get cancelled and have to go out for re-tender. We would end up paying more overall. Risk-sharing was a correct move. If the Deputy has a specific project we wants information on, he can contact me or if he wants statistics, he can contact my office.
