Report to inform future capital funding priorities

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., has today (Thursday) published the Report of the Mid-Term Review of the Capital Plan: Building on Recovery 2016-2021.

The Report sets the scene for decisions by Government on the allocation of the additional €4.1 billion* in Estimates 2018, for capital investment over the period 2018-2021, and the preparation of a new 10 year National Investment Plan to sustain national economic and social progress over the longer term.

Minister Donohoe said: ‘I welcome the publication of the Mid-Term Review of the Capital Plan which is particularly timely as the context for public capital investment has changed dramatically in the relatively short period since Building on Recovery was published in 2015.  The significant progress made in restoring the public finances and the transformation in economic performance over the past two years has enabled Government to increase capital expenditure by a further €4.1 billion over the remaining period of the Capital Plan.  This is in addition to the €2.2 billion already committed to support the delivery of the Action Plan for Housing along with other commitments made in Estimates 2017’.

The review draws on an evidence base that includes detailed submissions by Departments and Offices, an extensive public consultation, as well as an Infrastructure Capacity and Demand Analysis completed by the Irish Government Economic and Evaluation Service (IGEES) in the Department of Public Expenditure and Reform.

The Minister continued: ‘An assessment of the quality and capacity of existing public infrastructure and the main drivers of future demand for public investment were core elements of the review. This is crucial in providing evidence to inform decision-making on the allocation of the substantial additional resources available for public investment in Estimates 2018’.

Based on the analysis, the review of the Capital Plan has identified a number of key sectors as priorities for investment, including transport, education and housing.  These findings provide a detailed evidence base which will assist Government in selecting priorities for the allocation of the €4.1 billion of additional funding now available over the period to 2021.

Minister Donohoe concluded: ‘From a longer-term perspective, the review of the Capital Plan will provide a significant input into the development of a new long-term 10 year investment plan, to be published in conjunction with the Minister for Housing, Planning and Local Government’s new National Planning Framework (NPF) – the objectives of which are fundamental to the achievement of long-term economic, social and environmental sustainability’.

The forthcoming National Planning Framework (NPF) has a critical role to play in influencing the pattern of future investment in public infrastructure, to underpin future growth on a balanced regional basis with a particular focus on the development of Ireland’s regional cities.

Next Steps

The Government will make final decisions on the allocation of the additional funding available for public investment over the period 2018-2021 in the context of the 2018 Estimates.

Building on this investment, the Minister will publish a new 10 year National Investment Plan for the period 2018-2027 alongside, and in support of, the forthcoming new National Planning Framework.

The 10 year National Investment Plan will also include proposals for structural reform of public investment in terms of the planning, selection and delivery of capital projects.  This will be informed by the Public Investment Management Assessment (PIMA) undertaken by the IMF in July 2017.

*Notes to Editors

The Capital Plan, which was published in 2015, set out a six year framework for substantial infrastructural investment in Ireland out to 2021.  Since then, an additional €5.14 billion in Exchequer capital investment was originally allocated in the 2016 Summer Economic Statement (SES) in June 2016 for increased public capital investment over the period of the Capital Plan.  A further €1.5 billion has been allocated by Government from the Rainy Day Fund, as set out in the 2017 SES, over the period 2019-2021.  Taking account of the significant resources of €2.2 billion which have been provided to support the delivery of the Action Plan for Housing over the period and other commitments made in Estimates 2017 with implications for 2018 and 2019, €4.1 billion in additional capital expenditure is to be allocated on the basis of this review in Estimates 2018.