Sunday 22 September 2019

Let's stop spending too much money on vanity projects we don't need

There's welcome news of a return to capital spending - but we need to ditch the feast-or-famine approach, writes Colm McCarthy

Future: One way to avoid overheating and a new construction bubble is to exclude low-priority schemes, in Dublin or anywhere else, from the new capital plan
Future: One way to avoid overheating and a new construction bubble is to exclude low-priority schemes, in Dublin or anywhere else, from the new capital plan

If you have forgotten the 2018 Budget already, you can be forgiven. Current spending across all government programmes will rise by just 3pc next year, which should make you wonder what all the fuss was about.

Bigger increases will come on public investment and have yet to be revealed - the Government has committed to a multi-year capital plan to be published before Christmas.

Next year capital spending will rise by 17pc and there will be further substantial increases thereafter, but the detailed list of projects must await publication of the plan.

What happens with the capital plan is far more important than all the huffing and puffing over minor tax and spending changes on budget day.

Capital spending was cut back severely after the financial crisis, but has been recovering in recent years - as indeed it should. But there has been a long history of undisciplined capital spending in Ireland and a feast-or-famine pattern, with cost over-runs and wasteful projects in the fat years, followed by cutbacks in the bust and the build-up of infrastructure backlogs when the economy eventually recovers.

The realisation that capital spending is likely to increase for a while has unleashed a flurry of lobbying from the usual suspects. It would be nice to think a measured increase in spending on well-chosen priorities can - for once - replace the traditional splurge on politically expedient projects, followed by the shuddering halt when the money runs out.

Great attention as always will focus on the regional distribution of capital spending. The balance between Dublin and the rest of the country has already generated a veritable Ophelia of windy rhetoric. Politicians constantly assert as an established fact that Dublin's population has outgrown this small country of ours and that something must be done to redress the balance.

But it is only a political fact, not a real one. The percentage of the national population residing in Dublin city and county has barely changed over the past half-century.

Both Dublin city and county and the State as a whole have seen population rise at about the same rate over the last 50 years. The desertion of the provinces and the headlong rush into the capital never happened: it is an example of the late Brendan Behan's definition of an 'Irish fact' - anything that has been repeated in public three times.

What has actually happened is the most extraordinary, unplanned urban sprawl. The population of Kildare is now almost four times its 1966 level, Meath has more than trebled, and in Dublin growth has been on the outskirts rather than in the city proper.

Dublin city council manager, Owen Keegan, made an important speech last week, complaining about the inefficient land use in Dublin, which has no need, for a city of its modest size, to elbow its way into the distant midlands. There is no sense at all in constraining the growth of the capital's population in the years ahead - the priority should be constraining the quite unnecessary sprawl into adjoining counties. With planning and zoning reforms there is plenty of room in the existing city and county for the provision of affordable housing and the avoidance of all-day congestion and unsustainable long-distance commuting. Keegan was of course roundly condemned for his failure to appreciate the city's tremendous endowment of derelict open spaces and its world-beating house prices and rents.

The first priority in the new capital plan should be a deliberate target for residential development in the city of Dublin, particularly in the central areas and the less-distant suburbs. This requires planning reforms, but also a steady investment in the city's bus system, the key public transport facility for most Dubliners. Instead the political and lobbying pressure is for more spending on rail and tram projects that deliver far less bang for a buck.

The fascination with steel wheels, as against rubber wheels, on public transport vehicles is well illustrated by the continuing commitment of some politicians to the hugely expensive Metro North project and the lack of enthusiasm for the less costly, but far more effective, Bus Connects scheme proposed by the National Transport Authority. Metro North, a single underground tram line from the city centre to the airport and Swords, would cost €2.5bn, eight times the cost of the on-surface Red Luas line and three times the likely cost of the bus plan which would bring tangible improvements to the whole city.

There is already a tunnel northwards from the city centre, and bus usage at Dublin airport is popular. Journey times are good and the share of public transport one of the highest among major European airports. Manchester, for example, has an airport roughly as busy as Dublin, with both rail and tram connections, but the public transport share is lower than Dublin's bus-based system. Metro North is a solution searching for a problem.

A far more urgent priority in the Dublin area is an outer bypass to relieve the M50, heavily congested and effectively the main street of the city. The problem is immediate and an outer orbital route would cost less than the underground tram proposal. Metro North is so expensive, and like all underground projects, comes with such large risks of cost over-runs, that it could eat up so much of the capital budget as to threaten every other transport project around the country.

The inter-urban motorway network has been a spectacular success and there is unfinished business, notably the M20 route from Cork to Limerick and the improvement of links to the northwest.

These projects will end up on the long finger if Metro North goes ahead.

Under procedures developed by the Department of Finance, all major public investment projects are supposed to satisfy rigorous economic evaluation procedures. The virtue of this approach is precisely that funds, and the capacity of the construction sector, are limited, and that bad projects crowd out better ones in the real world. These procedures have in the past been honoured more in the breach than in the observance.

Aside from transport, the Irish construction sector, where shortages of skilled workers are already beginning to emerge, will have to provide extra housing, improved water infrastructure and better rural broadband among many other priorities. One way to avoid overheating and a new construction bubble is to exclude low-priority schemes, in Dublin or anywhere else, from the new capital plan.

Sunday Independent

Today's news headlines, directly to your inbox every morning.

Don't Miss