Dáil Éireann debate -
Tuesday, 28 Nov 2023

We all know we have been through two years of inflation, with huge inflation in construction costs, yet the national development plan has not been adjusted. We are allocating the same amount of money as if inflation never happened, which amounts essentially to a substantial cut in ambition in real terms. When will the ESRI complete its report on the national development plan?

I thank the Deputy for this question. By way of context, it is important to acknowledge the changes that have been brought about during 2023 to date. Since the renaming of my Department as the Department of Public Expenditure, NDP Delivery and Reform, there has been an enhanced focus and mandate for the delivery of the NDP. In light of this new role, a review of the support structures and levers available across Government to maximise delivery of projects was undertaken earlier this year.

As a result of that review, in March 2023 I secured Government approval for six priority actions. These include: first, significant changes to reduce the administrative burden in delivering major capital projects through measures to streamline the public spending code, which is to become the infrastructure guidelines shortly; second, the Minister, Deputy Donohoe, now taking a direct role in overseeing delivery of the NDP through chairing the Project Ireland 2040 delivery board; third, capacity reviews of Departments and agencies with significant delivery programmes to be carried out, where appropriate, to ensure that adequate resources for project delivery are in place; fourth, additional reforms to the capital works management framework, which sets out the contracts used for public capital projects; fifth, direct reporting to the Government on NDP delivery quarterly through 2023 and 2024; and, sixth, an independent evaluation of NDP priorities and capacity.

My Department has recently received the final version of the independent evaluation of investment priorities and capacity of the NDP conducted by the ESRI. This is an important report in terms of its evaluation of the capacity to deliver current Government priorities, to utilise sectoral capital allocations and to estimate the impact of the NDP on key economic indicators.

The report provides insights on constraints and capacity of key sectors including housing, energy, transport, health and education. In addition, it details cross-cutting themes which impact the priorities of the NDP that cut across sectors. These include climate commitments, planning and balanced regional development. Constraints in the construction sector are also examined by the ESRI, as well as inflationary pressures.

The Government has kicked the can down the road on capital projects. The NDP was reviewed in 2021 and the reviewed NDP set out departmental capital ceilings to 2025. What we saw in budget 2024 was the Government staying within the NDP. The reviewed NDP set targets for percentage of GNI* for capital investment. The targets it set for 2023 and 2024 were 4.9% and 5%, respectively. Now those figures are estimated by the Department to be 4.1% and 4.3%. That means the Government is far behind on capital investment in real terms. Why was budget 2024 not used as an opportunity to address the shortfall in capital investment?

Cabinet Ministers were warned of a €14 billion deficit in September. The Irish Fiscal Advisory Council, IFAC, has warned there will be a €19 billion black hole in our capital budget by 2030, which is very serious.

The quantum of our capital investment in this country is unprecedented. Our capital investment is approaching 5% of GNI*. I do not know of any other EU country that is providing that level of investment. At the same time, we are running a surplus, and are right to do so, and some money is being put aside to protect the economy in the event that our corporate taxes turn out to be a windfall. I dispute the assertion that we are not investing enough in capital projects. The ESRI report is about examining how far we can go with capital investment and given that we have full employment and a capacity constraint on skilled workers, how we can invest more into the economy and how we can get more out of our investments in the economy while at the same time taking account of the difficulty in hiring more people to do that work.

It is not just me saying this. As I said, IFAC has also warned about the €19 billion black hole in the capital budget. IFAC has also said that €2.7 billion extra will be needed each year from 2024 to 2030. That is what is needed for the projects outlined in the 2021 NDP to be delivered. We have severe infrastructure deficits. I know from my own constituency in Mayo that there are desperate needs for health projects, water infrastructure, road, rail and grid infrastructure. The list goes on. Will the public have to wait until 2025 at the earliest for Fine Gael to act and get capital investment back on track? There are large holes in the budget. It is serious. If the Government has an NDP and has committed to the Irish people that it will deliver on it, there is an expectation that it will. I cannot see, with the shortfall of billions we will face in 2030, how the work will be done.

The risk is that we increase capital expenditure beyond where we are now and get nothing in return. If we are in a position of full employment, where there is nobody available to do the work, and we increase the investment into a sector, we may receive back the same quantity of output - in other words, the same number of houses and hospitals are built - but prices, wages or costs are pushed up and, therefore, add to inflation. That is why the ESRI report is being done. It is why the review is being carried out. The ESRI has identified capacity constraints, given the place we are in the economic cycle. Referring back to previous ESRI work from 2006, it seems likely that additional demand would lead to construction wage inflation. Issues such as construction wage inflation need to be borne in mind. The expansion of the capital plan may risk higher levels of inflation and labour shortages in the construction sector. However, one thing that is coming out of the ESRI report is to note that in the medium term, successful delivery of NDP projects, including housing, should lead to a reduction in inflationary pressures.

It is disappointing that the Minister, Deputy Donohoe, is not here and that another Minister has not swapped dates with him so he could have a debate on the issue of our health services, which are important. The Minister and his Department were key in the Government's decision to underfund health. Will the Minister of State outline the engagement between the Minister, the Minister for Health and the director general of the HSE in advance of the 2024 budget?

I thank the Deputy for the question. The Government has overseen unprecedented levels of additional investment into our health services in recent years. Funding on a like-for-like basis, excluding disabilities, has risen by €7.4 billion from 2019 to 2024. This is equivalent to an average annual increase of 9% in spending.

This investment has facilitated considerable expansion of the health service workforce and it is expected that moe than 23,000 additional staff will, by the end of this year, have been added since the end of 2019. Furthermore, from a funding perspective, Ireland's health system compares favourably with other EU and OECD states across a number of different comparators, especially given our comparatively young population.

In relation to oversight of health expenditure, there is ongoing engagement between my Department, the Department of Health and the HSE throughout the year, including through the health budget oversight group, HBOG, on which the Department of Public Expenditure, National Development Plan Delivery, and Reform, the Department of Health and the HSE are represented. This group normally meets on a monthly basis to monitor health expenditure and staffing. There is also a series of detailed policy engagements during the year with the Department of Health, which feed into budgetary considerations. Similar to other Departments and the agencies and bodies under their remit, it is a matter for the Department of Health to engage with the HSE, as an agency under its remit, ahead of the budget. These engagements and subsequent analysis allow the Department of Health, as the relevant policy Department, to form a view on funding requirements. This is reflected in the Department of Health budget submission to my Department and in the subsequent Estimates negotiations between our respective Departments.

The 2024 Estimates process included an extensive series of meetings between officials in my Department and their Department of Health counterparts. As is the norm in the Estimates process, there were also a number of ministerial bilateral meetings ahead of final Government decision on the expenditure ceiling. Any questions on specific engagements between the Minister for Health and the chief executive of the HSE are best addressed to the Minister for Health. The health budget overall is a matter for the Department of Health.

The Department of Health requested €2 billion in order to meet the standstill costs for 2024. The head of the HSE, Mr. Bernard Gloster, wrote to the Minister for Health outlining his concerns before the budget. He said there would be significant and punitive risk to the public and that it was imperative that the Government should be in no doubt as to the position. This was in respect of the Government's decision to provide €708 million for existing levels of service, ELS, and €100 million for what are called "new measures". Was this letter shared with the Minister for Public Expenditure, National Development Plan Delivery, and Reform? When was this letter, and its concerns, shared with the Minister? What is the justification used by the Minister and the Government as a whole for dismissing the concerns of the head of the HSE? When the HSE is forced to run hundreds of million, if not billions, in deficit, it is forced into a situation whereby it cannot properly plan or prepare.

Negotiations happen between the Department of Public Expenditure, National Development Plan Delivery, and Reform and the Department of Health, or any other relevant Department. The Minister for Public Expenditure, National Development Plan Delivery, and Reform is not going to engage directly with agencies that are under the remit of another Minister. I understand the chief executive of the HSE sent an email outlining his concerns on the morning of the budget speech.

What I witness is that representatives of all Departments come into the Department of Public Expenditure, National Development Plan Delivery, and Reform every year and ask for more money than is available. They come in and make a request for money that is beyond what they are likely to get. They all know what they are likely to get because it is spelled out in the summer economic statement. The Department for Public Expenditure, National Development Plan Delivery, and Reform tells the world it will pay out, for example, 6.1% in extra expenditure for the year.

The Department of Health has not been underfunded. It now has €7.4 billion more in its budget than it had in 2019. It has 23,000 extra staff. It is not a case that the Department is not receiving very large quantities of money.

This is not extra money. It is money required by the health service to stand still and allow it to deliver what it has delivered heretofore. The Government forces health services to wait and react to demand rather than giving them resources that would allow them to plan and prepare. Representatives of IFAC outlined to the Committee on Budgetary Oversight that spending less on health is likely to cost more money. A chief economist stated:

A bit of money probably needs to be spent to save money in the long run. There is an element of not going down the road of penny-pinching but spending to save money in the long run.

Fine Gael’s short-sighted approach to budgeting will damage healthcare even further but will also cost us more money in the long run. This does not make sense. The Minister of State knows what is happening on the ground. He knows because the money is not there to do what needs to be done in social care, community care and primary care. We also have a backlog in acute hospitals and capital projects are being left behind on top of everything else. We are in serious trouble in the area of health.

I agree that investing money in the healthcare system has a positive return on investment. I know the Ministers for Public Expenditure, National Development Plan Delivery and Reform and Health are carefully reading the words of the Irish Fiscal Advisory Council on that. To give an example of the words following that, the Department of Heath agreed to regrade public health doctors to consultant level so that this service would become consultant-led. Public health doctors sought that for a long time. That decision was taken partly in response to the experience during the pandemic, which showed that the only way we could deal with a large health crisis was through preventative healthcare. Investment in healthcare, particularly in prevention and early and primary healthcare, provide a good return. It would be wrong to say there has not been additional investment. Investment has increased by an average of 9% per year. The €1.14 billion provided in this year’s budget for next year and 23,000 extra staff cannot be ignored.

This is something I am following up and it has been given particular urgency after the flooding in Galway. I know the Minister of State was down in Galway and I am sure he will tell us about it. Specifically, I seek an update on the status of the review by the Coirib go Cósta steering group of the draft revised programme for the Coirib go Cósta flood relief schemes; the timeline for the publication of the revised project programme; and if the Minister of State will make a statement on the matter.

I thank Deputy Connolly for raising this. I know she was unavailable on the day I was in Galway. I saw first-hand, when I visited Galway city recently following the flooding caused by Storm Debi, the devastation and impact flooding has on homes, businesses, people and entire communities.

The Government has assessed the flood risk for those communities most at risk from significant flood events. The catchment flood risk assessment and management, CFRAM, programme, Ireland’s largest study of flood risk, was completed by the Office of Public Works in 2018. An output of the CFRAM programme, the Government’s flood risk management plan, provides the evidence for a proactive approach for designing and constructing flood relief schemes for the most at-risk communities.

As the Deputy is aware, the process of redefining the scope for the Coirib go Cósta the Galway city flood relief scheme, which is at stage 1, has taken longer than first envisaged due to the complexity and increase in scale of the scheme. The process has been carried out in consultation with the project steering group by the appointed engineering and environmental consultants who are progressing the scheme.

A draft revised scope reflecting additional works for the scheme has been presented to Galway City Council. This revised scope has been reviewed by the Coirib go Cósta steering group members and agreement has been reached. In parallel, the consultants have submitted a revised programme incorporating the additional scope and this programme is currently being reviewed by the Coirib go Cósta steering group members. Galway City Council has advised that, subject to a contract variation, it expects that the revised programme should be available by mid-December 2023. During my recent visit to Galway city, I requested that a meeting be held between Galway City Council and local representatives to update them on the scheme's progress. I understand that is to happen shortly.

Investment in this scheme is through the €1.3 billion for flood relief under the national development plan to 2030. This has allowed the OPW to treble the number of flood relief schemes nationally at design and planning stages to some 100. Since 2009, OPW has approved funding under the minor flood mitigation works and coastal protection scheme of over €1.1 million to Galway City Council for projects, including a number of projects in the city to carry out channel maintenance on the open channel section of the stream and replacement of a trash screen. I can finish the reply shortly.

I thank the Minister of State for coming to Galway. I was chairing the Dáil that day at 2 p.m. and there was no way out of that. I have followed up this matter. The flood plans were drawn up in 2012. Following that, a programme of works were to be carried out. We are still in stage 1, which started in 2020. There has been one consultation in that time. There has been no update on the website in the past year. I want to work with the Minister of State and explain the position to my constituents in Galway. I live in the Claddagh and I am acutely aware of the problems with flooding. Indeed, my own office flooded but that was nothing compared with what homeowners suffered and continue to suffer. I thank the Minister of State for the schemes but I am tired of standing up in the Dáil asking for progress on the essential remedial works. "Remedial" is the wrong word because essential works are needed in the town that is known as the town of rivers and streams.

I know the website has not been updated. It is an issue my officials have brought to the attention of Galway City Council. As the level of the scheme is now greater than it was originally, primarily due to over-topping due to tidal effects, I have asked the city council to meet all the public representatives concerned, councillors and Oireachtas Members. By that stage, the council will have been given the most up-to-date information from the steering group. The meeting is to apprise everyone of what actually happened the last night the city centre flooded, because it is important to do so.

Last week, I met representatives of Galway City Council and a number of other local authorities in the Department. It is important that elected representatives are shown what happened on the night and the response to that event and that they see that the scheme, as originally envisaged, did not take into consideration the level of over-topping that is now being confronted in that part of the west. I hope everyone will agree that, knowing the scale and violence of the Atlantic storms that have hit Galway, including Oranmore in the Deputy’s constituency, and the damage they have done, we must incorporate changes before it is too late.

As a councillor at the time, I and others knew that a one in 100-year event was being looked at. We knew that was madness and we were not experts. In addition, we have been given so many deadlines that have been missed. I realise the complexity of the work but it is difficult to have trust when the website is not updated and reasons are not given. Councillors should be updated as a matter of course at council level and, separately, the TDs for the area.

In January 2023, I was given a date of the first quarter of 2023. I was then told it would be the end of June 2023, then the third quarter 2023 and then the end of November 2023. The Minister of State is telling me tonight it will hopefully be mid-December this year. I can see myself raising these questions with him again in the new year.

I raised this matter as a Topical Issue. That in itself was educational because my office had so much trouble getting the Minister of State’s Department to accept the question. We always table the questions to the Department but, unfortunately, we had used the word “business” in the question. We were told to submit it directly to the Office of Public Works, which we cannot do. It just illustrates that there is a disconnect somewhere.

The one-in-100-year event the Deputy referred to is the international norm for best practice for acceptable defences that can be put in place for climate adaptation and resilience to protect communities. It is not, therefore, unusual.

I met Galway City Council’s engineers when I was down there. In six weeks, we saw four catastrophic events, Storm Debi included. It would be reckless not to feed in the data Galway City Council obtained on the night to ensure the steering group, which incorporates the OPW and Galway City Council, is satisfied that when it meets local representatives the scheme it presents will be able to defend the city should a one in 100-year event occur. If we cannot do that, knowing the energy levels of the Atlantic, it would be a futile exercise.

The progression of measures to mitigate flood risk in the Shannon River basin is a key priority for the Government. Currently, there are 13 completed flood relief schemes schemes in the Shannon River basin and these schemes are already providing protection to more than 2,600 properties. A further 36 schemes will be delivered as part of the Government’s €1.3 billion investment in flood relief measures over the lifetime of the NDP. Some 24 of these schemes are currently being progressed, including in Athlone and Springfield, which are currently at construction stage. When completed, all schemes will protect 95% of properties identified as being at significant risk from flooding in the Shannon basin. On a day-to-day basis, water levels on the Shannon River are managed in accordance with agreed protocols between Waterways Ireland and the ESB. Waterways Ireland manages water levels for navigation purposes while the ESB manages water levels for the purposes of electricity generation. The ESB manages those levels on three lakes, Lough Allen, Lough Ree and Lough Derg, and Waterways Ireland manages water levels at the intermediate water control infrastructure between the lakes. Waterways Ireland and the ESB monitor weather forecasts and uses water level reading instrumentation to make informed decisions around sluice opening and closing procedures while remaining within the agreed protocols.

While these operations influence the water levels on the Shannon, the levels cannot be fully controlled, especially when the Shannon Callows are in flood. The Shannon flood risk State agency co-ordination group last met on 11 October 2023 and discussed a range of issues relating to work under way to assist with flood risk management along the River Shannon. This includes a project for the removal of the pinch points through the Callows region between Athlone and Meelick weir. The Shannon Callows includes two sites designated under European legislation, the River Shannon Callows special area of conservation, SAC, and the Middle Shannon Callows special protection area, SPA. Ireland, like all EU member states, is bound by the requirements of the EU habitats and birds directives and no work can commence in the absence of all appropriate consents being granted. A steering group is in place to oversee the pinch points project. A tender will issue shortly for an ecological consultant to carry out a high level environmental study. The study will consider the possible impacts of the excavation of material at key locations in the River Shannon channel; the long-term maintenance of the riverbed; and changes in water levels.

I thank the Minister of State for his response. He will be aware that there are ongoing issues in the Shannon Callows. He mentioned that no work can take place because of the habitats directive. What is the response? Are the MEPs from Government parties trying to raise this issue in Brussels to try to get it resolved? We cannot have a situation where farmers and landowners see the same thing happen year in, year out, not only in winter, but also in summer. I would like to know what progress has been made. What is happening with the advancement of the Bill? The River Shannon Agency Management Bill has been on the priority legislation list since 2021, so it has been on the list for 2021, 2022 and 2023. What does priority really mean if we have not seen this Bill advanced? I would like an update on that please because it is farcical. People are frustrated at the constant delays, especially with this Bill. Surely, it could be advanced quickly. We have seen legislation go through the House at speed sometimes, which is bad. Where is the Bill?

The preparation of legislation to improve the management of flood risk on the River Shannon is a priority. The management of flood risk on the river is closely intertwined with other uses of the river such as, as I already mentioned, navigation and dam safety managed by Waterways Ireland and the ESB, neither of which fall under the remit of the Office of Public Works. The OPW has conducted an analysis of existing legislation regarding the management of the River Shannon, including a review of the powers of various bodies involved with the river. The outcome of the analysis has informed a proposed approach, which is currently under consideration and I hope to bring a final proposal to the Government shortly.

With respect, shortly is not good enough. When will the proposal be brought to the Government? People need certainty. The Save Our Shannon Organisation has consistently highlighted this matter on behalf of farmers and landowners. There is a lot of frustration. Shortly does not cut it. We need a timeframe. It is not good enough. I need to give certainty to my constituents. The situation needs urgent action.

What are Government party MEPs doing about raising the matter in Brussels to try to get past the habitats directive or try to instill some common sense into it so we can stop people's land being flooded?

The CFRAM programme has been ongoing for the best part of a decade. There have been calls for reviews of its strategies. Will the Minister of State comment on that? I need certainty for my constituents. I would like a timeframe and to know whether he has been in contact with the MEPs from his party to try to have this raised in Brussels to get some common sense brought to the matter.

I am trying to answer the question the Deputy asked. With regard to the question the Deputy asked about the legislation, this is a complicated issue. One of the bodies, Waterways Ireland, which has responsibility for navigation, is a cross-Border body set up under the Good Friday Agreement. Its powers derive from the OPW, which previously had responsibility for the Shannon River.

In addition, there is electricity generation and there are huge implications for Parteen Weir and further flooding that could be caused at the lower end of the Shannon. It is not something we can simplistically solve. I have devoted a lot of time to it, as have my officials, and I hope to be in a position to bring a proposal to the Government on it early in the new year.