Spending review urges housing and health cuts

A review of the €51 billion National Development Plan due to be published tomorrow will recommend cuts in spending on hospitals, rural water schemes and social housing.

A draft copy of the report - which has been prepared by the Economic and Social Research Institute - also says there should be no increase in the provisions under the plan for national roads and transport.

The ESRI argues that spending in these areas should not be increased until there is evidence that bottlenecks currently holding up projects are being addressed.

The Mid-Term Evaluation of the National Development Plan will form the basis of the Government review of the plan which is due to run until 2006.

All six of the operational programmes in the plan have been separately examined and recommendations made on funding at the level of major project headings.

The draft report confines itself to whether or not funding should be cut, increased or left the same. More details are expected to be included in the report published tomorrow.

The ESRI is recommending that spending be cut or left unchanged in all but one element of the €22 billion Economic and Social Infrastructure operational programme.

The most controversial element is likely to be cuts in spending on acute hospitals.

The ESRI challenges the assessment that 3,000 acute beds will be needed by 2011. It argues instead that better use should be made of existing beds and that spending on new beds cannot be justified when one in five beds in public hospitals are in fact private or semi-private.

The review is also critical of the National Roads Programme, saying that many roads are being built to a specification far in excess of projected requirements. It recommends that all future roads be built to a minimum standard.

Future investment in fixed rail projects in Dublin is also questioned, with the ESRI concluding that money spent on the bus service has yielded greater dividends. Spending on both roads and transport should be held at current levels until these and other issues have been addressed, says the review.

The ESRI is also calling for spending on housing to be curtailed, arguing that such spending is fuelling demand and thus driving up prices. It says that one of the consequences of this is to price certain socio-economic groups out of the market.

The second largest operational programme, Employment and Human Resources, also comes in for criticism.

The €12 billion programme should be refocused to ensure that people who are losing their jobs at the moment do not drift into long- term unemployment.

Cutbacks are also called for in the operational programme dealing with the Border, Midlands and Western region, as well as the South and Eastern Region. Around €6 billion is committed to this programme and the ESRI recommends that spending on rural water schemes and waste management be curtailed.

They cite the high cost of the water projects and the lack of a national waste strategy which will add up to €2 billion to the cost of waste management. Cuts are also called for in the $127 million Peace programme dealing with peace and reconciliation and the €5.7 billion Productive Sector programme covering State support for research and industrial development.

Some of the main recommendations of the mid-term review of the National Development Plan.

Spending should be cut on:

Acute hospitals

Rural water schemes

Waste management

Housing

Alternative energy

Spending unchanged on:

National Roads

Transport

Crime prevention

Spending increased on:

Childcare

Lifelong learning