NDP: Capital expenditure
Published in October 2021, the new National Development Plan (NDP) is heralded as proof of the Government’s commitment to Ireland’s medium-term infrastructure and investment requirements.
Review to Renew, a review of the NDP was undertaken with the aim of ensuring optimal alignment with the new Programme for Government, the new Climate Action Plan, and the National Planning Framework (NPF).
As a component of Project Ireland 2040, the NDP outlines €165 billion in capital expenditure for the next decade, seeking to match the demand for public investment across all sectors, particularly in terms of enhanced delivery of infrastructure projects in housing, health, and the environment and climate. In parallel, the NPF establishes the national spatial strategy for the next two decades.
Overall, there will be a 14 per cent increase (€1.3 billion) on voted capital expenditure in 2022, including €0.2 billion for National Recovery and Resilience Plan (NRRP) projects, when compared with 2021. In total, Budget 2022 indicates that it will make available €11.1 billion through the NDP, alongside additional non-Exchequer investment.
“The revised NDP will deliver the largest and greenest capital investment plan in the history of the State.”
— Minister for Public Expenditure and Reform, Michael McGrath TD
As such, budgeted capital expenditure is set to more than double in 2022 when compared with the €4.6 billion pre-NDP position in 2017. Annual capital expenditure is projected to exceed €16 billion by 2030 and from 2021 to 2030, total Exchequer investment through the NDP will be €136 billion.
Initiating an increase in voted capital expenditure to 5 per cent of GNI* by 2025, core capital expenditure in 2022 will increase by 11.1 per cent (€1.1 billion) on the 2021 allocation (€9.8 billion) as outlined in the July 2021 Mid-Year Expenditure Report.
Previously, in 2021, 75 per cent of the €10.8 billion capital allocation was concentrated in four sectors:
- 27.4 per cent (€2,766 million) in housing;
- 25.1 per cent (€2,528 million) in transport;
- 12.3 per cent (€1,241 million) in education; and
- 10.4 per cent (€1,048 million) in health.
The Shared Island Initiative will also receive capital funding totalling €500 million over five years. This allocation is intended to “foster new investment and development opportunities on a North/South basis” and deliver cross-border objectives included in the Programme for Government. As such, in 2022, €50 million will be allocated to departments and agencies to facilitate cross-border projects. Meanwhile, capital allocations for 2022 also include €206 million via the NRRP.
The ESRI’s COre Structural MOdel of the Irish economy (COSMO) projects that the planned increase in capital expenditure from 2021 onwards, as contained in the NDP, will result in GDP increasing by 1.6 per cent by 2030, employment increasing by 3.0 per cent by 2030, and wages to increase by 3.1 per cent.
“The new NDP is somewhat hard to distinguish from the old one.”
— Sinn Féin spokesperson on Public Expenditure and Reform, Mairéad Farrell TD
Launching the NDP, Public Expenditure and Reform Minister Michael McGrath TD asserted: “The revised NDP will deliver the largest and greenest capital investment plan in the history of the State,” adding: “An employment impact analysis, carried out by my department estimates that an annual average of up to 81,000 direct and indirect construction jobs will be sustained as a result of the public investment in this NDP over the next decade.”
Meanwhile, Sinn Féin’s spokesperson on Public Expenditure and Reform, Mairéad Farrell TD, warned: “The new NDP is somewhat hard to distinguish from the old one. Yes, there are the increased departmental capital ceilings, arising from the increase in the total amount of funding that will come from the exchequer, but there is a distinct lack of details on costs, timelines and completion dates for the projects outlined therein.”
Departmental allocations in 2022
Education:
Capital expenditure provision for Education will increase by 7 per cent (€52 million) on the 2021 allocation to a total of €792 million, with the goal of ensuring that the Department can deliver new buildings and equipment, as well as furnishing primary and post-primary schools. Of the 200 school building projects currently under construction, the majority will be completed in 2022, ultimately delivering 30,000 additional and replacement school places.
Housing:
The Department of Housing, Local Government, and Heritage will receive the highest capital expenditure allocation of all departments, totalling €3.4 billion. Increasing by 23 per cent (€634 million) when compared with 2021, this additional support is intended to support the delivery of Housing for All. For instance, of €1.7 billion and €224 million will be allocated to the provision of 9,000 social housing units and 4,100 affordable housing units in 2022.
Environment, Climate, and Communications:
Capital funding for the Department of the Environment, Climate, and Communications will increase by 21 per cent (€121 million) above the 2021 allocation, totalling €700 million in 2022. It is intended that this additional investment will help meet the objectives of Climate Action Plan 2021, as well as the continued roll out of the National Broadband Plan. The allocation for 2022 will mark the beginning of enhanced direct capital investment by the Department, amounting to €12.9 billion over the lifetime of the NDP.
Transport:
Totalling €2.6 billion, the Department of Transport will receive the second highest capital allocation of any department. These resources are proposed to deliver the maintenance, active travel, public transports, and road priorities contained within the new NDP. For example, this includes the delivery of 41 additional InterCity Railcar carriages in 2022, and progress on BusConnects, MetroLink, and DART+.
Health:
Capital funding for the Department of Health in will total €1,010 million in 2022, representing a 12 per cent (€105 million) increase on the revised 2021 allocation. Additional expenditure is earmarked for the delivery of the National Children’s Hospital at St James’s, as well as priority projects in primary care, community nursing units, ambulance bases, mental health, and acute services.
