A leading economic think tank has criticised the Government's record on getting value for money for taxpayers and called for a rethink of the next National Development Plan (NDP).
In an analysis published this morning, the Economic and Social Research Institute (ESRI) claims that the Government had obtained smaller than expected economic returns from the previous plan and runs the risk of repeating its mistakes with the next plan.
The institute was particularly critical of the approach to spending on schools. According to ESRI estimates, an extra 50,000 primary school places will be needed by the end of the second NDP - but this had not been adequately reflected in its plans for school construction.
"It's not rocket science to find out where schools are needed, but we don't seem to have a system to do that," one of the report's authors, Edgar Morgenroth, said.
The institute highlights problems in relation to the construction industry, fearing it will not be able to cope with the number of projects being promised.
The ESRI says to avoid waste, the average annual spending in the next plan should be cut to €8.4 billion from the €10 billion the Government intends to spend per year over the next plan, due to run from 2007 to 2013.
ESRI economist Prof John FitzGerald said the economy was not ready for significant increases in capital spending. "We have the money, but we can't spend it all because the economy can't take it."
Strong activity in the construction sector in particular was responsible for higher wages and prices in the economy, he added. "The problem is that the construction sector now dominates the economy and it is crowding out those who live in the real world," he said.
The ESRI wants investment in transport to remain a priority, but targeted spending in this category should still be reduced to €3.4 billion from €4 billion.Mr Morgenroth said that value for money measures were needed to justify any increase in capital spending. "All projects - this is very important - should be properly evaluated and that evaluation should be transparent . . . Most evaluations have been carried out by the sponsoring agency and that is hardly a good way to go about it," he said yesterday.
The ESRI called for new resources to be given to the Department of Finance so that proposed projects could be scrutinised.
Compared to about €70 billion due to be spent on the next NDP, proper evaluation would cost just a few hundred thousand euro, Mr Morgenroth said.
Mr Morgenroth also criticised the lack of integrated ticketing for public transport services in Dublin.
The institute said if the Government pared back spending to the levels it recommended in its report, the economic returns would be high. It added that "more space" could be made for higher spending if tax incentives for private sector construction were curtailed and planned spending of €1 billion on buildings necessitated by decentralisation was forgone - as this would free up private sector construction firms to work on infrastructural projects.
Criticism was also directed at spending on recreational facilities, such as swimming pools, which needed to be spread more widely to be consistent with the National Spatial Strategy.
Responding to the ESRI evaluation, Minister for Finance Brian Cowen said he welcomed some of its findings, but said the forthcoming plan, due to start next year, should be implemented as soon as possible.
"I believe that we should work to eliminate the infrastructure deficit as quickly as possible in order to improve quality of life and enhance competitiveness across the economy," he said.