Dáil Éireann Debate, Wednesday - 9 October 2013
3. Deputy Luke 'Ming' Flanagan asked the Minister for Public Expenditure and Reform with regard to the shovel ready projects spoken of last year, the progress that has been made on getting such projects up and running; if he will outline any tangible results from this policy; if he will indicate the benefits this approach has had for the masses of young persons who are unemployed here; and if he will make a statement on the matter. [42739/13]
Amharc ar fhreagraI welcome my constituency colleague, Deputy Wallace, to the House and to Priority Questions. As he is aware, job creation is a critical priority for Government. In July 2012 the Government announced its plans for an additional €2.25 billion investment in public infrastructure projects in Ireland. The most important contribution capital investment can make is to provide the capacity for the economy to grow, which, in turn, will create jobs. The largest portion of the stimulus package included €1.4 billion to fund the proposed new public private partnership, PPP, programme and the delivery of this was the initial focus for my Department. This €1.4 billion investment is additional to the direct investment by the Exchequer in infrastructure, which will be some €3.4 billion this year. That is a great deal of money.
In July I announced details of the first tranche of the Exchequer phase of projects worth €150 million. This investment will be in schools, roads and local authority energy efficiency projects. Under the latter, retrofitting will take place in respect of some 25,000 local authority houses. Progress is being made on the roll-out of the roads projects by the relevant local authorities and I am informed that the money allocated will be completely expended this year. The Department of Transport, Tourism and Sport expects to spend its full allocation of €50 million by the end of the year. The Department of Education and Skills expects to spend approximately €10 million of its additional allocation on various projects by the end of the year. The balance will be rolled over into next year.
Activity on the PPP programme is well under way, with five of the nine projects already issued to market. The flagship Grangegorman project, which is valued at over €200 million, is due to issue in the coming weeks. I am pleased to report that there has been very active market engagement from both investors and construction companies in this area. That reflects the growing confidence in the Irish economy. Investment in the projects included in the stimulus package is expected to generate significant numbers of jobs throughout the country. Analysis of each sector indicates that the investment in PPP projects will generate in the region of 13,000 direct jobs and many more indirect jobs.
Additional information not given on the floor of the House
At this early stage in the process, most of the employment impact has been in the technical and advisory areas. The indicative timetable for the projects suggests construction is expected to commence on the first roads project by the end of 2013 and on the accommodation projects by quarter four of 2014.
As part of the ongoing monitoring of employment in respect of current PPPs, the most recent figures from the schools bundle 3 project indicate 4,079 man months of full-time equivalent employment have been engaged up to the end of August. We will also be monitoring the level of employment being created during the construction of the N11 and Newlands Cross PPP which commenced in June.
My Department, together with the National Development Finance Agency, NDFA, and the sponsoring authorities has examined how to maximise job creation as part of each tender competition. As a result of this, a pilot is under way for the schools building programme. In that context, tender competitions will now include a clause which sets out particular employment requirements such as 10% of the aggregate number of person weeks carried out on the site to be undertaken by those who are recruited from the ranks of the long-term unemployed. In addition, 2.5% of the aggregate number of person weeks carried out on the site will be undertaken by apprentices. Feedback received by my Department from the NDFA is that the Intreo office in the Department of Social Protection is very keen to become involved in this initiative and is actively setting up the relevant contacts with contractors at local level. Enterprise Ireland is also involved in running workshops and "Meet the Buyer" events aimed at the SME sector. The NDFA's initial impression is that the initiative is working well.
Approximately one year ago the Minister informed me that he was in favour of ensuring that the leaks in the water supply system would be repaired before the process of installing water meters commenced. We agreed that while this would cost money, it would lead to the creation of a great deal of work. Given that over 40% of our water leaks into the ground, the Minister agreed that it would make sense to fix the pipes before we began installing meters to measure what comes out of them. However, we have started the process of installing meters without proceeding to fix the pipes in any serious way. Irish Water is taking control of the water system and I am concerned - perhaps the Minister is too - that the water services investment programme may be adversely affected. Irish Water is not really going to be in a position to continue with the upgrades to water supply and sewerage schemes that have been planned by local authorities. Evidence from throughout the country appears to show that these upgrades are beginning to stall. That will certainly have an impact on employment. Will the Minister indicate what he proposes to do in respect of this matter?
Some of those question are not particularly germane to my area of responsibility but I will do my best to answer them. Irish Water is the new flagship State agency. It will be a commercial semi-State body, the largest created since the ESB. It will have a significant quantum of money to invest, not only in respect of water metering but also in the context of water development. Such investment must be made because there is a need to provide clean, safe water for homes, schools and hospitals and also for industry. Increasing numbers of the businesses we are attracting here in the areas of pharmaceuticals and ICT require high-quality water supplies. That is a very important consideration. We need to proceed with this matter in a sustainable way. In the context of global warming, the Deputy is well aware that we will be obliged to put in place measures in respect of areas such as that in which we live, namely, the south east, which it is predicted will experience water deficiencies in the future.
All these matters are fully encompassed by Irish Water, including the addressing of the leaks issue, which is very much on its agenda. We will have a much more sustainable water supply system in place with a uniquely focused Irish Water company.
The Minister has still not explained why we are not fixing the pipes before putting in the meters. On the issue of youth unemployment, there is little doubt that austerity has had a bigger impact on youth unemployment than on people over the age of 25 and especially over the age of 30. The schemes the Government has come up with have not solved youth unemployment. The only release valve seems to be emigration. While I know the figure is down to 26%, it seems that is due to more emigration.
Without a shadow of a doubt, the domestic economy has traditionally given more work to young people starting out than any other sector. People can talk about growth in the export figures but as long as the domestic economy has problems and living standards continue to fall for most people, it is hard to see jobs being created in that area. One of the few measures the Government took to deal with the domestic economy's problems was reducing the VAT rate to 9%. I do not know whether it will be retained in this budget.
We have been round the houses on the issue of rates and upward-only rents. People will say rates are being reviewed. I have rates being reviewed in respect of five wine bars and the proposal is that they will go up by 47% and not down.
Youth unemployment is a critical issue. Thankfully, we have less than half the youth unemployment challenge as Spain. We have a variety of initiatives under way, including JobBridge, to tackle it. We have increased the number of young people in work, so it is not simply the emigration valve. There are actually more young people at work, which is very important.
The youth guarantee is a new initiative we negotiated as part of the multi-annual financial framework during the Irish Presidency, and it will be rolled out next year. As the Deputy knows, it will become live on 1 January with European funding to match Irish funding. Tackling the unemployment problem is the number one priority for this country. Most impartial observers will see the fruits of all the work we have been doing, with the numbers in jobs increasing for the first time since 2008.
