Sunday, 14 January 2007

Not published yet, but there are already complaints about the cost of the new NDP

Cliff taylor in the Sunday Business Post writes:

A major government economic plan, to be published next week, will outline proposals to spend more than €175 billion over the next seven years.

The money will be spent on roads, public transport, research, training and a range of social programmes. Among the key commitments will be 100,000 new social and affordable homes and 50,000 new childcare places.

Minister for Finance Brian Cowen will outline the National Development Plan (NDP) 2007-2013 on Tuesday, January 23, in the most far ranging economic programme ever outlined by an Irish government.

The largest single amount of money - likely to exceed €50 billion - will go towards economic infrastructure such as roads and public transport, energy and broadband.

Further significant amounts will be spent on enterprise and science, training and social infrastructure, including social and affordable houses and new prisons and courthouses.

Previous programmes have only dealt with investment spending, but for the first time the new NDP will include a seven-year programme for day-to-day spending in key social areas such as childcare services, support for older people and the disabled and programmes to promote immigrant integration.

These will be required to improve services and deal with a population that is likely to rise to more than five million over the next decade. The government hopes the plan, coming months before the election, will give the coalition an extra boost before polling day.

Total state investment spending under the programme will come to more than €75 billion.

Together with substantial investment by state bodies such as the ESB and the private sector and some €50 billion in day-to-day spending on total programmes, this will bring total spending on all elements of the plan to more than €175 billion, outlining significant amounts of the state spending programme for the next seven years. This represents a major departure from the current method of allocating money on a year-to-year basis in each budget.

The plan will say that funding the programme will depend on a continuation of strong economic growth, which it expects will run at 4 per cent plus on average each year.

As well as carrying through the €34 billion Transport 21 plan published last year, the government will present the document as addressing key ‘‘quality-of-life’’ issues.

It will promise to accelerate investment in schools, particularly in fast-growing areas where there is a shortage of places and to tackle youth disadvantage.

For the elderly it will outline a multi-year programme to increase supports for those staying at home as well as investing in nursing home facilities. The Economic and Social Research Institute (ESRI) has found that investments under previous plans have generated a strong return.

However, the government is choosing to ignore advice from the ESRI that it should cut back on investment spending over the next couple of years, particularly in areas such as social housing, as it could get better value when growth rates cool.

Among the key targets of the plan will be a major training programme for those in work overseen by FAS and heavy investment in third level education facilities.

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