Update: Infrastructure Deficiencies – Public Expenditure and Reform 6th November, 2014

 
  To ask the Minister for Public Expenditure and Reform the extent to which his Department continues to review specific areas of infrastructural deficiency such as road, rail, water, housing, telecommunications and/or energy with a view to a determination as to the way to proceed to address these issues in the context of overall requirements as part of planned economic recovery and mindful of fiscal constraints; if the concept of a development bond has been considered as a means of addressing such deficiencies in the short and medium term; and if he will make a statement on the matter.
 
REPLY.

My Department commenced a review of the public capital programme in April of this year in parallel with the Comprehensive Review of Expenditure. The purpose of the review is to assess all areas of public capital investment and to refresh the existing investment strategy and multi-annual envelopes to  ensure that they are in line with emerging Government priorities and that  our limited resources are focussed on the areas that can best support continued, sustainable and equitable growth.

As the Deputy will be aware, new mutli-annual ministerial expenditure ceilings (both  capital and current) for the years 2015 to 2017 were published in the  Comprehensive Expenditure  Report  on Budget Day.  This Budget  marked a move away from cuts to overall spending and allowed for some targeted increases in  both capital and current expenditure.  On the capital side, significant levels of Government investment are set out for the next three years to support  Social Housing, Transport, Education, Health and the Enterprise Sector. The Capital Review is being finalised at the moment and will be published before the end of the year. It will set out a multi-annual capital investment framework to the end of the decade, including the 3 year ceilings announced in the Budget.

The Deputy has asked specifically about the potential for using development bonds to fund national infrastructure.  The National Treasury Management Agency (NTMA) indicates that project-specific bonds would not be the most effective way forward.  However, the Government has been actively exploring other non-traditional approaches to  financing capital projects that could be viable, and we have been able to make some notable announcements recently.  In this context, on Budget Day I announced that it is intended that €400m of public investment would be available, including from the proceeds of the sale of the Bord Gáis energy business,  for  investment in social housing through an off-balance sheet financial vehicle which will channel funds to the voluntary housing sector.  I also announced that Public Private Partnerships would be used to deliver 1,500  social housing units by 2017.  Both of these are in addition to the significant direct Exchequer investment in the social housing programme over the next three years, and the appropriate use of non-traditional funding approaches such as these can help us increase the level of investment available beyond what we can provide through normal Exchequer voted spending.

The Deputy will also be aware that we are setting up the Ireland Strategic Investment Fund (ISIF) to channel investment from the National Pensions Reserve Fund (NPRF) towards productive investment in sectors of strategic importance to the Irish economy. The ISIF will seek to leverage and maximise  the resources transferred from the NPRF  by attracting third-party co-investment. In this way, the Fund’s assets can be used as a catalyst to attract additional capital for investment in the Irish economy.