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 Header Item Other Questions
 Header Item Infrastructure and Capital Investment Programme
 Header Item Information and Communications Technology

Thursday, 1 June 2017

Dáil Éireann Debate
Vol. 953 No. 2

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Other Questions

Infrastructure and Capital Investment Programme

 6. Deputy Sean Sherlock Information on Seán Sherlock Zoom on Seán Sherlock asked the Minister for Public Expenditure and Reform Information on Paschal Donohoe Zoom on Paschal Donohoe his plans to increase off-balance sheet capital investment. [26209/17]

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher Permission has been given to Deputy Joan Burton to take this question.

Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton The Minister could just continue to tell us about how he plans to increase off-balance sheet capital investment. In particular, will he identify some of the mechanisms he proposes to use? Is it special purpose vehicles? He has spoken about other finance mechanisms and obviously this is one of them. I would be grateful for this information.

Deputy Paschal Donohoe: Information on Paschal Donohoe Zoom on Paschal Donohoe Over the coming years, the Government intends to increase capital expenditure, as clearly outlined in our capital plan. When account is taken of the additional €5.14 billion now committed to capital investment over the period of the plan, capital expenditure will reach 11% of gross voted expenditure in 2021, or almost 75% higher than we were in 2016. We do need to be careful to avoid stoking construction price inflation by increasing expenditure without paying attention to the capacity of the sector to undertake additional projects.

  Public infrastructure is primarily funded by direct Exchequer financing, which is classified as on-balance sheet as the Deputy knows. Off-balance sheet funding of capital projects is also possible in certain circumstances, primarily through the use of public private partnerships, PPPs. They offer an alternative model for delivering infrastructure that can facilitate the delivery of additional capital projects and can be effective in some circumstances. However, the long-term nature of the financial commitments arising under PPPs requires that the use of such arrangements must be carefully planned to ensure they are used to address needs that are not likely to change over a 25-year period, and do so in a way that is sustainable. I have asked the Department, as part of the mid-term review of the capital plan, to review our experience of using them and to consider their scope for further use to complement the direct provision of infrastructure using Exchequer funding.

  A senior group has been established, comprising officials from Departments with experience of procuring projects by PPP, together with the Department of Finance, the National Development Finance Agency and Transport Infrastructure Ireland.

  Additional information not given on the floor of the House

  This group is reviewing past experience with PPPs and its report, once complete, will provide an evidence-based analysis of the potential for further use of PPPs, and concessions, as a procurement option for the delivery of additional capital infrastructure. Assessing the affordability, sustainability and value for money of PPP procurement will be key elements of the group's work.

  There is already a significant number of projects being delivered on an off-balance sheet basis under the Government's PPP programme. While such off-balance sheet structures have a role to play in enabling additional infrastructure to be delivered in parallel with direct Exchequer provision, they are not a panacea and involve significant financial commitments on the part of the State for many years to come. The scope to use such off-balance sheet structures to deliver capital infrastructure is also somewhat constrained under the latest EUROSTAT rules. However, the Government remains open to the possibility of using further off-balance sheet options to supplement direct Exchequer investment and assist with the delivery of critical national infrastructure on a timely basis, where this is considered suitable and provided that this can be done on a sustainable and affordable basis.

  The report of the expert group will help inform a final decision on how to proceed with off-balance sheet PPPs in the context of the new long-term capital plan to be published later this year.

Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton To continue the point on housing and the infrastructure required for it, I could bring the Minister to an area he knows well in my constituency, Hansfield in Ongar. Over the past ten years, planning permission has been given for another 3,000 houses there, in a very desirable area, where most of them would be for purchase. Small-scale building is happening there at present but some investment in road infrastructure was required. These 3,000 houses on the west side of Dublin would make quite a difference to supply. There has been much school building in the area also, yet there is no funding for a small element of an access road and a bridge over the canal. This is very difficult to understand now that things have improved so much. I appreciate the volume of capital investment has increased, but it is nothing like what is actually required. I do not think anybody in government has really got a handle on how to ramp up the volume and the amount of infrastructure that is required.

Deputy Paschal Donohoe: Information on Paschal Donohoe Zoom on Paschal Donohoe I am very strongly aware of the need to increase capital investment. I know the Deputy understands these matters very well, and the choice we have is regarding how we do this in a way that does not cause the price of what we are looking to build to increase so we end up building projects at a higher cost than we should. We have been down that path before. To do this, it is important that we pace the increase of capital expenditure in a careful manner. With regard to what the Deputy said about Hansfield, at the end of last year we set up the local housing infrastructure activation fund there, and the main reason the fund was set up was to provide co-funding to local authorities to provide transport infrastructure and utilities to allow private development to occur. It would appear the fund should have been able to meet the need the Deputy has just spoken about. I will find out why it did not do so, because 3,000 homes is a huge number of homes in an area that would be well capable of sustaining them. I will respond to the Deputy on this matter after this step.

Deputy Joan Burton: Information on Joan Burton Zoom on Joan Burton I hear the voice of departmental officials stating what we got wrong the last time was excessive cost increases and prices that ran out of control. With the establishment of the Department of Public Expenditure and Reform specifically as a management oriented body alongside the Department of Finance, the Minister should have better ways of being able to control expenditure. Foreign direct investment is interested in investing in various parts of the country, but it is not possible at present to rent at any reasonable price. Rental prices all over the Dublin region are at Hollywood levels. We are talking about a two-bedroom apartment costing well over €2,000 month. Almost no other country in Europe has this type of price. What about a bit of price control or rent control so it is possible to control and influence prices? As I stated, I hear the voice of the Department officials stating this was our mistake the last time and we will avoid it this time.

Deputy Paschal Donohoe: Information on Paschal Donohoe Zoom on Paschal Donohoe It is not the voice of officialdom making these points, it is me. If we were in a situation where we ended up paying more for projects than we should, the Deputy would be in here immediately criticising me for doing it. I will not allow the taxpayer to be in that place. If we look at what we are planning to do, from a capital expenditure point of view, as it is this year we will invest €4.5 billion in capital investment. By 2018, with none of the changes to which I referred, that figure will increase to €5.3 billion and the year after it will increase to €6 billion. There is a steady pace of increase in capital expenditure to meet the needs to which the Deputy is referring, and a huge amount of work has got under way to make sure we provide the type of office space to allow companies and investors be present and create jobs in Ireland. I know what more we need to do on housing, but this is the reason we have a fund of €5 billion in place to try to at least deal with the public housing element of our challenge.

Information and Communications Technology

 7. Deputy Dara Calleary Information on Dara Calleary Zoom on Dara Calleary asked the Minister for Public Expenditure and Reform Information on Paschal Donohoe Zoom on Paschal Donohoe the progress made under the public service information and communications technology strategy; the amount of money spent on the strategy; the Departments to which it has been rolled out; if he is satisfied that the investment to date in 2017 has represented value for money; and if he will make a statement on the matter. [26202/17]

Deputy Dara Calleary: Information on Dara Calleary Zoom on Dara Calleary The number of very serious IT outages, which affected people's information in recent weeks and months, has highlighted the importance of a proper public service technology strategy, particularly given the amount of data and information it controls. I want to discuss with the Minister the progress of the strategy, what the Government is prioritising in terms of investment in the strategy and how it will impact.

Minister of State at the Department of Public Expenditure and Reform (Deputy Eoghan Murphy): Information on Eoghan Murphy Zoom on Eoghan Murphy I thank the Deputy for the question. The public service ICT strategy was approved by Government and launched in January 2015, and is specifically aligned with the objectives of the public service reform plan and the goals of the Civil Service renewal plan. The strategy aims to provide a framework for the delivery of greater efficiencies in public service ICT delivery and administration, with better outcomes for citizens, businesses and public servants.

The strategy identified five key strategic objectives setting the future direction for innovation and excellence in ICT in the public service. These are build to share, digital first, data as an enabler, improve governance and increase capability.

The strategy encompasses all Departments, and the Department, through the Office of the Government Chief Information Officer, OGCIO, is working with Departments to progress the 18 step action plan for the strategy, which the Government chief information officer agreed with the Civil Service management board in October last year.

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