I am pleased to have this opportunity to speak today on the national recovery and resilience plan, which forms a key element of the Government’s response to the global pandemic. The overall objective of the national recovery and resilience plan is to contribute to a sustainable, equitable, green and digital transition in a manner that complements and supports the Government’s broader recovery efforts. It is important to acknowledge the scale of the Government’s response so far to the exceptional circumstances we have faced, with over €28 billion in national funding made available over 2020 and 2021.
Budget 2021 provided for an overall expenditure ceiling for this year of €87.8 billion. This includes almost €12 billion to continue our response to Covid-19. This additional funding has been critical in supporting the health service and other front-line services as they respond to the crisis, and in providing the necessary supports to people and businesses who have been devastated by the pandemic. Key measures provided for to date throughout 2020 and 2021 include some €15 billion allocated to the pandemic unemployment payment, PUP, and the employment wage subsidy scheme, EWSS, and prior to that the temporary wage subsidy scheme from their introduction to the end of June this year.
Approximately €1.25 billion has been made available in business supports through the Department of Enterprise, Trade and Employment. Further support for businesses has been provided by the commercial rates waiver, with almost €1.2 billion in funding earmarked to meet the costs of this to the end of June. Additional funding of €4.4 billion has been provided across 2020 and 2021 to support our health service in responding to the pandemic.
Building on this response, the measures laid out in the economic recovery plan will continue this support for people and businesses. While there will be a further cost to these measures, they will provide for the continuation of necessary support for incomes, employment and activity across our economy. With the economy now reopening in clear phases, and vaccine roll-out comprehensively under way, the economic recovery plan sets out renewed supports, investments and policies for a new stage of economic recovery, providing a clear pathway for the labour market and enterprise towards new opportunities. It includes in excess of €3.5 billion in further labour market and enterprise supports as well as almost €1 billion additional funding under the national recovery and resilience plan. It will help to drive a jobs-rich recovery, with an overarching ambition of 2.5 million people in work by 2024. Crucially, these jobs will be more productive, more innovative, more resilient and in new areas of opportunity, aligned with the Government’s green and digital ambitions. This reflects the acceleration of many trends, in particular increased online working and shopping, coupled with the urgent challenges we face in meeting our climate and housing targets.
The plan comprehensively expands the EWSS and the PUP. By outlining the next steps, it provides clarity and certainty for businesses and employees over the period ahead. In addition, it extends the Covid restrictions support scheme, CRSS, as well as enhancing the restart payment; it extends the commercial rates waiver until the end of September 2021; it provides for a new additional business resumption support scheme; it extends tax debt warehousing until the end of 2021; and it further extends the 9% tourism VAT rate until September 2022.
Critically, this plan is about much more than short-term decisions. It is about the sustainable rebuilding and renewal of our economy. First, it will help people back into work by extending labour market supports and through intense and comprehensive activation and accelerated training, reskilling and upskilling opportunities, including the forthcoming 2021-25 pathways to work plan, which will be published shortly. Second, it will rebuild sustainable enterprises through targeted supports for recovery and by future-proofing enterprise to be more resilient, innovative, and productive. Third, it will enable a balanced and inclusive recovery through strategic investment in infrastructure, reforms that enhance our long-term capacity for sustainable growth, balanced regional development and improvements in living standards. Fourth, it will ensure sustainable public finances, with the forthcoming summer economic statement to include further details of our deficit reduction strategy.
The national recovery and resilience plan is aligned with both the economic recovery plan and the review of the national development plan that is currently under way. It has been developed by the Government so that Ireland can access funding under the EU’s recovery and resilience facility. Ireland is expected to receive €915 million in grants under the facility during this year and next. A further set of grants is to be allocated in 2023, taking into account economic developments between now and then. The recovery and resilience facility is the largest component of Next Generation EU, the European Union’s €750 billion response to the global pandemic.
The aim is to help repair the immediate economic and social damage brought about by the pandemic and to prepare for a post-Covid Europe that is greener, more digital, more resilient and fit to face the future. These aims are well aligned with the economic recovery plan that we launched yesterday.
The national recovery and resilience plan sets out the reforms and investments to be supported by the recovery and resilience facility in Ireland. My Department, working together with the Department of the Taoiseach and the Department of Finance, has been responsible for preparing the plan, using the input of other Departments, as necessary, and ensuring co-ordination across government.
Reflecting the requirements of the recovery and resilience facility, the plan has a particular focus on green and digital transition, in addition to supporting economic recovery and job creation. To meet EU requirements, a minimum of 37% of expenditure will be devoted to climate transition and 20% to digital transition. The plan will also address investment and reform challenges identified in country-specific recommendations made to Ireland by the EU in recent years.
The national recovery and resilience plan includes a set of 16 investment projects and nine reform measures, with a total value of around €1 billion. These focus on three priorities: advancing the green transition; accelerating and expanding digital reforms and transformation; and social and economic recovery and job creation.
Turning first to the green transition, the next few years are critical if Ireland is to address the climate and biodiversity crisis that threatens the safe future of the planet. Ireland's ambition is to more than halve carbon emissions over the course of this decade. This will be challenging and will require fundamental changes in so many aspects of Irish life and our society and economy. However, the measures contained in the national recovery and resilience plan and other key domestic plans will help us rise to the challenge. This is why the plan sees a significant allocation made to supporting investments addressing the green transition. Just over €500 million is provided for this priority. This represents a first step towards significantly reforming and directing relevant funding towards decarbonising projects, such as retrofitting, ecosystem resilience and regeneration, climate mitigation and adaptation, and green data systems. Two reform projects included under this priority strengthen the overall governance framework by enshrining key environmental policies in national legislation. This will help to ensure that our environmental policy efforts are on a sustainable footing and that momentum is maintained into the medium and long term.
Reflecting the importance of the digital transition for Ireland and Europe in the coming years, supports for Irish businesses and citizens to adapt to and reap the benefits of digitalisation are central to our national recovery and resilience plan. Some €295 million is provided for this priority.
Ireland's ambition is to provide a better experience for citizens and businesses interacting with the Government and, equally important, to continue with and accelerate the reform agenda through improvements in the way government systems operate. Achieving this requires the digital transformation of government, which involves redesigning and rebuilding government processes and services – across organisations, if necessary – and using digitalisation and data to provide an integrated experience for citizens, businesses and policymakers. Having a user-centred focus on the design and delivery of public services, underpinned by exemplary identity and data infrastructures, will be a key driver of reforms.
The digitalisation of the public service is particularly key given the challenges presented by Covid-19, with the need for remote working, remote transferral of confidential information and a reduction in gatherings and face-to-face consultations.
Our digital transition will be one of the key enablers in our reform agenda. It will allow greater interoperability of public services within and between organisations, nationally as well as across the EU, as appropriate. It will improve the quality of service and enable the sharing of information within the public sector and with citizens and businesses, thus enhancing our public administration. Assisting and incentivising SMEs to harness digital technologies to transform their business processes has been prioritised in our plan, with supports provided to accelerate the adoption of digital and other new technologies by Irish businesses as a critical driver of enterprise productivity and competitive advantage. A reform project included under this priority focuses on mainstreaming digital literacy and digital skills across all levels of the education system. This will support the implementation of the digital reform and transformation agenda into the future.
Ireland's national recovery and resilience plan has a strong focus on supporting people's return to work and preparing for the challenges of the future. Just over €180 million is provided for this priority.
Further education and training in Ireland have long played a critical role in labour market activation and in upskilling and reskilling people. The requirements pertaining to the further education and training sector are particularly acute given the significant impact of Covid-19 on the social and economic fabric of our country. Certain occupations and sectors, such as hospitality, services and retail, have been impacted greatly. Additional skills challenges that relate to climate, Brexit and automation also still exist.
This priority area in Ireland's plan will focus on new work placements in response to the Covid-19 pandemic to keep those who are unemployed close to the labour market. This area will also focus on equipping the Irish workforce with the necessary skills that will be required to boost the innovation and productivity of the SME sector, and the provision of skills in support of climate action. This commitment to reforming the focus of further education and training to meet the future employment Ireland strives to advance, in climate action and digitisation, will ensure there is alignment between the development of physical capital and our people, our human capital.
This priority area also includes a suite of reform projects to address several important social and economic policy needs identified in Ireland's country-specific recommendations in recent years. Implementing reforms in the key areas of health, housing, pensions, institutional frameworks, taxation and the business environment will contribute to strengthening the overall social and economic policy framework in Ireland.
The national recovery and resilience plan is aligned with both the economic recovery plan and the ongoing review of the national development plan. As the House will be aware, the Government decided to bring forward the proposed review of the national development plan to 2021. The new national development plan is being finalised and it will set out for the upcoming ten-year period to 2030 revised sectoral capital allocations, including non-Exchequer investment, in addition to providing a renewed focus on the delivery of efficient public infrastructure.
As with the existing national development plan, investment under the revised plan will be aligned with the national planning framework to support strong regional infrastructure investment, generate local employment and improve capability in respect of economic activity throughout all the regions. This level of capital investment will support substantial direct and indirect, regionally dispersed job creation over a sustained period.
The revised national development plan will include an overarching focus on climate across all sectors, with all investment proposals assessed against environmental outcomes. This is in line with the results of the public consultation process which showed near consensus on the vital importance of climate action, balanced regional development, sustainable housing, and transport. This review is due to be completed this summer. We intend to publish the plan next month.
The investment projects and reform measures set out in the national recovery and resilience plan will combine to contribute to a sustainable, equitable, green and digital recovery that is consistent with the objectives of the recovery and resilience facility in the EU and complements the broader recovery effort on which the Government is focusing.
As we head towards midsummer and the days continue to brighten, more than 15 months have passed since we first asked the country and our people to take extraordinary measures in response to the extraordinary circumstances we faced. In a national response of historic proportions, the country and our people have responded commendably to that challenge.
Increasingly, our attention turns from fighting the pandemic to preparing for the recovery. That is why the national recovery and resilience plan is about investing in the areas that will help us to achieve inclusive and fair recovery in the years ahead.
I should have said at the outset that I am sharing my time with my colleagues, Deputies Moynihan, Christopher O'Sullivan and Devlin.