Hard questions must be asked of tomorrow's new National Development Plan, which will set out spending over the next seven years, writes Turlough O'Sullivan
Ireland's population is at its highest level in 150 years but continues to cascade towards the eastern seaboard. The National Development Plan (NDP) 2007-2013 to be unveiled tomorrow will lay down a huge seven-year investment programme designed to bring Ireland to a new stage in its economic development. For IBEC, balanced regional development is the primary dimension on which the plan must be assessed.
Central Statistics Office forecasts, made in 2005, estimate that by 2021 the population will rise by over 900,000, with half of the increase concentrated in the Greater Dublin Area. It is in the national interest to establish cities of critical mass that allow them to develop desirable infrastructure and services on a par with Dublin or other well-developed European cities. The National Spatial Strategy was produced too late to inform the basic approach of the 2000-2006 national development plan. It was the worse for it.
The spatial strategy aims over a 20-year period to achieve a better balance of social, economic and physical development supported by more effective planning. Having established Dublin's pivotal role in Ireland's success, the strategy has identified eight urban gateways that would complement the capital's success and thereby enable a more balanced regional development.
This is also in the interests of Dublin, which is in danger of losing its attractiveness through congestion and escalating costs.
The sums to be announced in the new national plan will be enormous by any yardstick. How we use this money and how well we manage it will be crucial to the sustainability of the high-income levels we have achieved over the past decade. The economy's potential growth is founded on combining four types of capital: human, natural, physical and social. Entrepreneurial talent is the quintessential element that brings these four together. The business community has shown itself to have the capacity to combine with workers and the Government to sustain economic growth through successfully competing in global markets. This in turn gives rise to higher income levels, enabling greatly improved social amenities and a more satisfying quality of life.
Productivity growth has declined sharply as recent economic growth has been primarily labour intensive. This has put enormous stress on the physical infrastructure, causing congestion, long travelling times and asset price inflation. The new plan, therefore, must be directed unequivocally towards enhancing the potential to generate the highest and most sustainable return from our capital assets. High living standards in a small open economy can only be sustained by increasing the success of the traded sector in supplying the global market with quality goods and services.
The specific questions on human capital we will need to ask following the launch of the plan include:
Will it result in a level of investment in education and training that achieves our goal of being a leading knowledge-driven economy?
Will it result in increasing the number of science students in schools, at graduate and PhD level that will supply knowledge-based businesses to compete successfully on global markets?
Will it ensure that there will be local access for every child to have the highest standards of education and ensure that school completion rates improve?
Will broadband roll-out be maximised and ICT usage in schools improved?
Ireland should be a good place in which to live and work. This requires good delivery of health and educational services. It requires that sporting, recreational and entertainment amenities are within easy reach of main urban areas. It requires sufficient social and affordable housing that all citizens enjoy the fruits of increased economic success. Social infrastructure is an important element in ensuring that the high levels of economic growth can be sustained by ensuring that Ireland remains an attractive location in which to live for those already here and for those who would be attracted to come here.
The physical infrastructure has improved substantially but more is required, particularly around the road networks, the energy transmission systems and making the all-island economy a more tangible reality. The new plan can give greater impetus to the sustainable development of the natural capital that is our environment.
There must be accompanying measures to ensure efficient delivery of the promises. The administrative and legal infrastructure was not sufficiently in place during the last plan to ensure efficient delivery of major projects on time and on cost, though advances have been made in more recent years. There must be mechanisms put in place to ensure that all projects are closely monitored and that effective interventions can be speedily made in the event of slippage from targets.
We must be more vigilant because the European Commission, with vastly reduced involvement, will not play an oversight role in evaluating this plan as it has done on previous occasions. There is a danger that project evaluation could be overturned by political pressure. There must be rigorous project appraisal within a cost-benefit framework before any project is embarked upon. At the same time, there is a need to develop more appropriate indicators to ensure that relevant criteria are taken into consideration to evaluate regional development. A strong, independent and transparent monitoring body should be established which includes high-level private sector participation.
The Economic and Social Research Institute has noted, in its ex-ante evaluation of the investment priorities for the national plan, that the delays encountered in planning and delivery of major infrastructure were "abnormal" by the standards of our EU neighbours.
It is essential that, following the enactment of the Strategic Infrastructure Bill, all projects under the National Development Plan pass through the planning process at the earliest time possible.This could be particularly relevant in the event of a sharp slowdown in house construction that would release capacity in the construction sector to advance projects under the plan.
It is essential that there is integrated planning over the next seven years. It would be folly to put in place infrastructure such as a rail service and not zone adjacent land for high-density development.
Similarly, in the pursuance of the spatial strategy, zoning and planning for higher density developments of gateways and hubs must be in place to build up the concentration of population and avoid urban sprawl, which will militate against the provision of good local services and amenities.
Ireland stands at a historic cusp. The resources are in place. Future generations will judge us harshly if we blow a monumental opportunity.
Turlough O'Sullivan is the director general of the Irish Business and Employers Confederation (Ibec)