Blog: Government’s Vision of ‘Ireland 2040’ must be based on strong regions

28 Feb 2017

Dominic-portraitThe Government has opened a public consultation on the National Planning Framework. This strategy is a successor to the largely unsuccessful National Spatial Strategy. The NPF has the potential to be one of the most important Government strategies in the last 50 years. Its entitled Ireland 2040 and it aims to chart out how Irish society and its economy will develop over the next quarter of a century.

In shaping the Ireland of tomorrow, today’s political landscape is very much to the fore. The Government will be extremely challenged to ensure the NPF leverages the strengths of Ireland’s regions without becoming diluted by the demands of every community, regional and local interest group. I am reminded of the saying that nobody trips over mountains; it’s the small pebble that causes you to stumble.

Many people appear to think we have a choice between strong regional development or a strong Dublin economy. The truth is it’s not a zero-sum game.  International research shows that capital cities are and will be the primary engines of global economic growth.  However, overreliance on capital cities, as we currently experience with Dublin, is economically risky and unsustainable.

At nearly 50% of GDP, the Irish economy would suffer greatly if the Dublin economic engine stalls.  (London currently accounts for 30% of UK activity and that’s considered unhealthy).  The capital is struggling under its own economic gravity as people migrate from the country to the capital to pursue careers and opportunities. Traffic congestion is up, rents are rocketing and there’s a significant housing shortage. 

Nobody should be suggesting that policy promotes the regions at the expense of Dublin or vice versa. The NPF must set out a strategy where economic centres in the regions are established to provide a complimentary counter-balance to the capital. People on the western seaboard must see opportunity in economic centres like Galway, Cork and Limerick.  The ATM (Athlone, Tullamore, Mullingar) region with the correct policy could attract significant FDI-related and local manufacturing for example. 

All or any economic centres must be connected to the capital to maximise our economic potential. In short, the success of the NPF will boil down to our ability to deliver world-class connective infrastructure – road, rail, air and broadband are all essential. 

To deliver this sort of transformative vision, Ireland must increase significantly its capital investment. The Government is currently reviewing the Public Capital Review up to 2021. We understand there may be an additional €5billion arising in the review. However, this is inadequate against a backdrop of chronic underinvestment for the past decade and in the face of the great ambition of Ireland 2040.

We must more than double our level of infrastructure spend from 2% to 5% of GDP rapidly. Unlike the past decade, there is significant funding available through the Junker Fund at EU level.  However, the EU has also imposed strict fiscal constraints on our Government’s ability to spend. The Government must redress this contradictory situation and secure a relaxation of restraints on capital investment as Ireland struggles to put in place the infrastructure to meet the needs of Europe’s fastest growing economy and population.  

This will enable us to provide the necessary infrastructure to develop the regions that alleviate some of the pressure on Dublin and generate a diverse and well-balanced economy.

The construction industry will be integral to the delivery of this plan.  Having a strong cohort of regional construction companies is critical. The CIF believes that the Government must set out an industrial strategy for the industry with a well-funded development plan to help companies develop their capacity to deliver these projects.

This sort of collaborative approach has yielded positive results in the food and financial services industry. Minister Coveney was instrumental in delivering huge increases in food exports in conjunction with the industry through Foodwise 2025. However, there is no equivalent strategy for the construction industry. They must set out a series of supports that companies can build our capacity to deliver the sustainable level of 25,000 housing output required annually and the €43billiion infrastructure set out in the Government’s Public Capital Programme.

The industry currently accounts for 7% GNP and the widely-accepted level in a developed, but growing economy is 12-15%. The CIF believes that this gap can be filled by supporting regional construction companies to deliver housing and infrastructure outside the Greater Dublin area. The industry currently employs around 140,000 people directly, far more than any other sector in Ireland. So, the potential for regional job creation is huge.

The CIF will continue to engage with Government at all levels on this issue on the basis that strong regional economies equate to a strong sustainable Irish economy. 

Dominic Doheny is President of the Construction Industry Federation andjoint Managing Director of John Flanagan Construction Ltd. 

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