Dáil Éireann Debate, Thursday - 8 February 2024
94. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if he plans to bring forward a revised national development plan departmental ceilings in order to account for the inflation; and if he will make a statement on the matter. [5764/24]
View answerI have already discussed the recently published ESRI report and some of the important findings therein. However, the report ignored the elephant in the room, namely, inflation. The national development plan is at risk if the Government does not get serious about the impact of inflation. If the intention of the report was to inform decisions on the NDP ceilings, why did the Minister not instruct the ESRI to examine the impact that inflation has had on the NDP?
I asked the ESRI to give me an assessment of the implementation of the national development plan and the kinds of issue that I believed should be considered in its future. The ESRI is an abundantly authoritative organisation that is well capable of choosing what issues it wants to consider in replying to the mandate I gave it and the piece of work I asked it to do. It is not fully fair to say that the ESRI ignored inflation in this context, as I do not believe that is the case. The ESRI stated that, in an economy that had experienced inflation and now had many different supply constraints, it was not credible to be able to say that we could make progress on everything at the same time. The ESRI asked the Government to consider a number of decisions that could be made – in fairness to the Deputy, she recognised these in her earlier question to me – to shift economic activity around in our economy to better prioritise public capital projects. The ESRI gave some fair consideration to inflation and the supply constraints within the economy. I am now working with all Ministers on this matter to see whether we can make further allocations to capital spending plans in various Departments to try to progress important projects. By and large, we have been successful in ensuring that the majority of projects are still moving ahead despite the impact of inflation. We have been able to do so because of the strength of our public finances. They might not all be moving forward at the pace we would have wanted, but the majority are still moving forward. I am committed to ensuring the impact of the NDP this year and beyond.
We know of some projects that have been delayed, but my main concern is that we do not know the extent of those. Last September, Ministers warned that there would be a €14 billion deficit.
The Irish Fiscal Advisory Council then stated that it would be €19 billion and that €2.7 billion extra would be needed each year to meet the existing capital plans. I know that €250 million was allocated but that is only 10% of what is needed. Two years of record inflation means that the level of funding is nowhere near sufficient. My concern is how that will play out on the ground in terms of vital projects that are needed and that are not being delivered. I will talk about one of those in my next contribution. I refer here to projects relating to hospitals, roads and schools that communities have campaigned and waited for for years. Those communities have been left in the dark wondering why the projects they thought had been agreed are not progressing at the speed they need them to.
I thank the Deputy. The Irish Fiscal Advisory Council made that observation regarding its view on the deficit of capital funding in the time ahead. This is the same organisation that is making the case for the implementation of the 5% spending rule. On the one hand, it is arguing, understandably and I agree with it, that we need to move back to the 5% spending rule. On the other hand, it is saying that we need to increase the value of capital expenditure. That is fine; that is its job. What I and the Government have to do, however, is to try to reconcile those competing priorities. Likewise, the Economic and Social Research Institute, ESRI, is making the case for further targeted capital expenditure but it is also warning that the we are at full employment and that the economy is experiencing supply constraints. It is offering different recommendations to me which my colleagues in Government and I have to try to bring together and be consistent on.
I appreciate that there are some projects that are not moving forward with the speed that the Deputy and communities would want. The Government, by having a capital spending plan for this year of nearly €13 billion, is doing all it can to move projects forward across the country.
That is the concern. We talked about data earlier. We also discussed regional development and what needs to be done there. The data that is available from the EU Regional Competitiveness Index shows that in the context of infrastructure, the west is in the bottom 7%. That speaks for itself.
One of the projects I am very concerned about is that relating to Ballinrobe Community School. The Minister of State, Deputy Calleary, and I met with the relevant officials a couple of weeks ago, together with some local councillors from the Minister's party to discuss the absolute need to deliver this project because the school does not have the capacity to take on the students it is being asked to take on in the coming year. The school is asking the students to operate at a particular level when it does not have the resources that are needed to allow them to do so. As matters stand, it absolutely maximises the resources it has in order to make use of every square inch of available space. The school first contacted the Department about this matter in 2017 when it received projections relating to the number of students it would have to deal with in the future. Since then, members of new communities have come into the area. That is being embraced, but the school needs to be able to do as I have outlined. That is just one example.
In fairness, the Minister, Deputy Foley, is making the case very strongly for funding that will allow projects such as that relating to the school in Ballinrobe to which the Deputy referred to go ahead. She is also making the case for people to focus on the issues the Deputy mentioned. Understandably, I am not aware of the specifics of the school in question. Overall, the Minister, Deputy Foley, and I are working very closely together on a regular basis to see whether we can provide further funding to allow projects in the Department of Education to move ahead. It is not easy. The Deputy will have heard this morning of all of the different competing cases which are made for more funding. I am trying to get to a fairer and further allocation of funding. I take the Deputy's point, however, regarding that school. I am sure that the Minister, Deputy Foley, is well aware of the matter and will try to find a way to move it forward.
