I thank the Chairman and Members of the committee for taking this Vote at this time and for giving me the opportunity to elaborate on the details of the Supplementary Estimate for my Department's Vote. I am pleased that Deputy Flood, Minister of State at my Department, is also with me.
The need for a Supplementary Estimate this year arises for a number of reasons, the most significant of which are the need to fund expenditure on the swimming pools programme, responsibility for which transferred during the year to my Department from the Department of the Environment and Local Government; the need to fund deficiencies in appropriations-in-aid, arising as a result of shortfalls in ESF receipts which the Commission has stated it will not be able to meet until 1999, by virement from savings elsewhere in my Vote; the provision of additional funds to Bord Fáilte to assist with the ongoing development of the national 1798 centre in Enniscorthy, County Wexford, in this the bicentenary of the rebellion; and the allocation of the remainder of savings from within the Vote to subhead B1 in respect of expenditure for marketing campaigns targeted at maintaining tourism growth and addressing regional spread.
The additional expenditure proposed under this Supplementary Vote, therefore, relates primarily to the tourism side of my Department and, before going into the specific details, it would be useful to review briefly the recent performance of the sector and what I am proposing in that context.
Essentially I am proposing additional support for Bord Fáilte's marketing campaigns targeted at maintaining tourism growth and addressing regional spread. It is important, however, to consider my proposal both in the context of the recent performance of the tourism sector and of the challenges with which the industry is, or will shortly be, confronted.
Over the past ten years tourism has enjoyed astonishing and unprecedented success with the number of visitors and, more importantly, foreign revenue earnings from tourism increasing annually. Tourism statistics show that the number of overseas visitors has increased dramatically from 2.4 million in 1988 to over five million in 1997. Over the same period, total foreign revenue earnings have almost trebled from £800 million to £2.1 billion, while employment in the tourism industry has doubled from 60,000 to 120,000. Tourism is now our second largest industry, supporting one in 12 jobs, and is a major contributor to the Irish economy. This growth looks set to continue, with Bord Fáilte forecasting a growth target of 8 per cent in visitor numbers and 9 per cent in revenue for 1998. I am confident that both of these targets will be achieved, making it yet another record breaking year for tourism nationally.
Targets set for 1999, at 7 per cent growth in visitor numbers resulting in 5.78 million visitors, and a 9 per cent increase in total foreign earnings to £2.5 billion, are, I am sure Members will agree, very challenging, particularly given the ever expanding tourism economic base and increased competitive pressures facing the industry. The additional funds which I am now seeking will help to ensure that Bord Fáilte's marketing campaigns reach a sufficient level to make the necessary impact in our core markets and thereby achieve those targets. In particular, a special effort will be made to boost activity in our continental markets, including Germany where a number of new initiatives are planned to redress the decline of the last number of years. I have also asked the board to pay particular attention to the more general issue of the regional spread of tourism. Since coming into office I have been anxious to do what I can to help bring about a wider regional spread of tourism benefits. As a result of a Supplementary Estimate in 1997, Bord Fáilte benefited from a boost to its 1997-8 marketing programme which enabled it to undertake a comprehensive programme of activity to support the achievement of national growth targets and to make an initial effort to promote a more balanced regional distribution of tourism benefits.
As our tourism industry continues to grow, it is vitally important that the growth is on a sustainable basis. Because of our low population density, low intensity farming and an absence of traditional heavy industries, we have tended to take our strong environmental position for granted. Our international reputation as a green, uncrowded destination, with unspoilt scenery and unpolluted coasts, is one of our major selling points, in particular to the modern discerning high yield visitor.
However, while our recent strong growth levels have given rise to congestion in certain resort areas in the peak season, not all regions and not all sectors have experienced growth at the current national levels. There is little doubt that this year's bad summer weather affected business, particularly domestic business in the west. Both of these factors highlight the continued need for wider regional and seasonal spread. On one hand, we must pay greater attention to visitor flow management and good conservation practice in product development. It was for this reason that I launched a pilot tourism and the environment initiative late last year, with the objective of generating practical projects which could point to ways of supporting tourism development, while at the same time sustaining the environment on which it is based.
We must, on the other hand, and in a complementary fashion, continue our efforts to enhance the marketing of tourism attractions in the other less developed regions of the country. This can be done through funding support for regional tourism authorities to work with county and local groups in undertaking well-focused marketing activity and through product marketing led by Bord Fáilte, by promoting the products which naturally favour the underperforming regions.
A number of factors have contributed to Ireland's growth in recent years.
These include increased investment in facilities for visitors; a significant degree of buoyancy within key source markets, notably Britain and the United States; the continuation of competition in air travel which has had a favourable impact on the availability and cost of access to the country; and Ireland's increasingly fashionable image as a holiday destination.
It is important that we do not take this success for granted. As we approach the new millennium, the challenge to create further economic growth and employment has never been greater. One of the major tools available to Ireland's tourism marketing effort is Tourism Brand Ireland, which will be three years old in 1999. Market research conducted by both Bord Fáilte and OTMI has confirmed that the uniqueness of the Irish holiday experience lies in the personal and warm interaction between visitors and the Irish people - "people and spontaneity" as the market researchers categorise it. This is the very essence of our brand. As with any branding strategy, however, there is a requirement to review its progress, ensure its effectiveness and measure its vitality and impact. Accordingly, support funding is also being provided to facilitate a review and further development of the TBI project.
I cannot overstate the contribution which two successive EU operational programmes for tourism have made to our recent tourism performance. However, given the uncertainty over future EU funding, we have to be prudent and consider all possible alternatives.
Funding for tourism destination after 1999 is a critical issue, and I am considering a range of options at present as to how such a fund might be constituted and operated on a partnership basis with the industry. In the meantime, it is essential that Bord Fáilte has the necessary funds to enable it sustain the marketing programmes which will maintain Ireland's competitive position in the world market and help to build a firm base from which we can meet the challenges that lie ahead.
As a result of this Supplementary Estimate, Bord Fáilte will, in total, spend an additional £6.15 million through subhead B1 of my Department's Vote. The expenditure will be employed to support the advancement of the 1999 forecast tourism growth of 7 per cent in visitor numbers and 9 per cent in foreign revenue earnings; to encourage the promotion of a balanced regional distribution of the benefits of tourism; and to facilitate a review and further development of the Tourism Brand Ireland project.
The aim will be to enhance the ongoing effort to market the tourism attractions of the various regions throughout the country, while at the same time enhancing the international profile of Ireland as an attractive tourism destination. Within this framework I have also directed that a special effort be made to boost our promotional activity in the Continental market, particularly in Germany and France. The sluggishness of the German economy has been inhibiting our tourism traffic from that market, and I am anxious that everything possible be done to restore growth. At a recent meeting with the board of Bord Fáilte, I asked the agency to consider organising, together with the representative bodies, a special initiative involving the smaller players in the industry such as bed and breakfast houses, farmhouses and guesthouses, to promote their facilities.
On the tourism front, I am also very pleased to be able to propose a special allocation of £250,000, under subhead B2 of my Department's Vote in 1998, to assist with the ongoing development of the 1798 National Centre in Enniscorthy, County Wexford, in this, the bicentennial of the rebellion. The centre is a state-of-the-art visitor attraction which tells the whole complex story of the United Irishmen rising of 1798 and is a marvellous heritage amenity for the town. It was designated the National Centre by the Government earlier this year and the additional funding is clear evidence of our commitment to the development of quality heritage sites.
I also propose to offset savings of £24,000 in subhead B5, exchange loss on certain ICC Bank plc foreign borrowings for tourism development, to subhead B9, EU support for small business tourism, against unexpected over-expenditure of £22,000 in that subhead. This will facilitate increased costs this year of the interest subsidy payable in respect of tourism loans under the subsidised loan scheme.
This Supplementary Estimate is also being used to transfer responsibility for the national lottery-funded swimming pools programme to my Department from the Department of the Environment and Local Government. As Minister with responsibility for tourism, sport and recreation, it is logical and reasonable that, since my Department had responsibility for the administration of the sports capital programme, which included a swimming pool element, it should also have the additional responsibility for the operation and management of the swimming pools programme. In so doing, I am also conscious of the particular objective in my Department's strategy statement to adopt a more strategic approach to sports facility provision. Having responsibility for both programmes will facilitate a more integrated approach to the provision of swimming pool facilities.
Members will be aware that the swimming pool programme is funded by surplus national lottery funds. Under this programme, capital grants are available towards the approved cost of refurbishing an existing swimming pool and towards the cost of a new pool, inclusive of the cost of modest ancillary facilities. The proposed works must comply with the standards laid down in the procedures for the planning, approval and financing of swimming pools and technical guidelines. All proposals must be supported by the local authority. Where a project is being undertaken by an organisation other than a local authority, the proposal must be considered, in the first instance, by the local authority concerned. Before supporting an application, the local authority would have to be satisfied that the proposal is viable, that the balance of funding required to complete the project is available and that the project, when completed, will have a satisfactory level of access available to the general public.
In summary, the £3 million being sought as part of the Supplementary Estimate is to cater for the transfer of responsibility for the operation and management of the programme from the Department of the Environment and Local Government into a new subhead in my Department's Vote - subhead C6.
Other adjustments in various subheads of my Department's Vote offset the funds required under this Supplementary Estimate. Under subhead B3 - overseas tourism marketing initiative limited, OTMI - a saving of £0.308 million comes as a result of a reduction in European Regional Development Fund associated funding arising from currency adjustments under the EU operational programme for tourism, 1994-9. Under subhead B4 - special tourism marketing initiatives - a saving of £0.2 million arises as a result of anticipated expenditure in respect of special tourism marketing projects being less than expected.
Under subhead C3 - grants for the provision of major sports facilities which are national lottery funded - there is a provision of £9 million in this year's Estimates for my Department for grant expenditure under the sports capital programme, comprising £6 million on the major facilities scheme and £3 million on the recreational facilities scheme. Expenditure under the programme in 1998 will amount to £6 million. The savings of £3 million on the major facilities scheme arise due to a number of factors. These include a number of major projects which were due to commence in 1998 that did not go ahead, for example, Athlone regional sports centre and St. Catherine's Project in Dublin; delays occurring due to the unavailability of registered contractors and the inability of projects to raise sufficient funds locally to get projects up and running in 1998, and delays in obtaining planning permission and in submitting the necessary documentation required under the terms and conditions of the programme in order for payment of the grants to be made.
The development of quality infrastructure is critical to the future of sport in Ireland. In this context, the sports capital programme administered by my Department is very important. This programme provides national lottery funding towards the provision of sports facilities at national, regional and local levels. It is the primary vehicle for promoting the development of sport and recreational facilities in Ireland and comprises the major facilities and recreational facilities schemes.
The major facilities scheme is a multi-annual sports capital programme which assists with the provision of major sports facilities at national, regional and local levels. The recreational facilities scheme assists voluntary and community organisations in providing, improving and equipping recreational, leisure and community facilities. The scheme provides essential support to clubs and community groups for the continuing development of their facilities.
Earlier this year, in the context of the 1998 round of grant allocations, I announced that I was initiating a comprehensive review of the sports capital programme. This review, which has been ongoing for the past few months, was undertaken in the context of the implementation of policy for sport and recreation in line with the commitments in the Government's Action Programme for the Millennium. The review of the programme, which I expect will be completed before Christmas, has involved the examination of the objectives, terms of reference and criteria for the existing schemes and the role of other Departments and agencies in the provision of sport and recreation facilities.
The main objective of the review is to develop a new programme which will promote a more strategic and co-ordinated approach to the use of available resources for sport and recreation, particularly in areas of greatest need, and assist with the creation of opportunities to participate in sport and recreation through access to facilities, especially by young people. Once the review is completed, details of the revised programme will be widely publicised and it will be open to clubs and organisations to apply for funding.
The second part of the Supplementary Estimate relates to the Minister of State, Deputy Flood's responsibilities.
