As part of Project Ireland 2040 the revised National Development Plan (“NDP”) sets out the Government’s over-arching investment strategy and budget for the period 2021-2030 with a record spending of €165 billion.
The NDP is to work in parallel with the National Planning Framework to ensure that the investment strategy supports spatial planning. The stated aims of the NDP are also to ensure a sustainable and regionally balanced post- pandemic recovery recognising the challenges with population growth (approximately 1 million people between 2016 and 2040), Covid-19, Brexit, housing issues, health and the climate emergency. The NDP is underpinned by the updated Public Spending Code which came into effect in January 2020.
The NDP has been dubbed the “largest and greenest ever delivered in Ireland, with a particular focus on supporting the largest public housing programme in the history of the state”.
The NDP sets out Departmental allocations to 2025 with the subsequent years to be added on a rolling basis. This article will focus on the Departments receiving major investments in this NDP with a further focus on the impact on the construction sector and supports needed to deliver the NDP.
We will see continued investment in all of the big road projects from the previous plan and the NDP is committing to investing €8 billion over a 10-year period in the protection and renewal of national, regional and local roads.
Significant funds will be allocated to carbon reduction measures including incentives to encourage the switch to electric vehicles and alternative fuels and supporting additional infrastructure for such vehicles. The aim is that almost 1 million electric cars will be travelling on Irish roads by 2030.
The NDP investment will contribute to the implementation of Sláintecare and the reforms proposed therein. The main focus is to facilitate the re-orienting the model of care towards primary and community settings which will include the continued roll out of Primary Care Centres across the country.
The NDP investment in school infrastructure is aimed at adding capacity to cater for demographic changes and to provide for children with special educational needs through the “Large Scale Projects Programme”. On the ground we will see an increase in school places, special classes, capacity for classrooms and special schools throughout the country. It is envisaged that an average of 150-200 school building projects will be delivered annually over the period 2021 to 2025.
The funding will also be used to facilitate the modernisation of existing school stock and the continued embedding of digital technologies in teaching, learning and assessment with a new Digital Strategy for Schools due for publication before the end of 2021. The Covid-19 pandemic has brought the importance of this starkly into the limelight.
The Department of Education is also working closely with the Department of the Environment, Climate and Communications as part of the Schools Energy Retrofit Pathfinder Programme. This programme is working on the energy retrofit of schools built prior to 2008 and also the future direction of energy efficiency in schools with the aim to transition the school system to an era of net zero carbon by 2050.
With regard to further and higher education, the strategic investment priorities will be in significantly increasing capital funding for the Further Education and Training (FET) sector, expansion to address increasing enrolments arising from demographic growth, investments to support skills development, continued development of technological universities, maintaining and enhancing existing infrastructure and energy efficiency and decarbonisation. The Higher Education PPP Programme will also progress through procurement and construction with eleven new buildings in this programme.
Over the period 2021 – 2030 the planned carbon tax increases may allow for €9.5 billion in additional revenue. €5 billion of this additional revenue has been committed to increase capital investment levels in energy efficiency.
The Public Spending Code will need to be updated to reflect the Governments enhanced ambition to cut greenhouse gas emissions by 51 per cent by 2030 and to reach a carbon neutral economy by 2050. The role the Public Spending Code can play in the achievement of broader environmental objectives will continue to be examined over the longer term.
The NDP commits to investing for low-carbon, resilient electricity systems and significant funds will be allocated to support the target of retrofitting 500,000 homes to a Building Energy Rating (BER) of B2 and the installation of 600,000 heat pumps with 400,000 expected to be in existing homes by 2030.
A significant allocation will be focused on bringing high-speed broadband to every home, school and business in Ireland, no matter how remote, via the National Broadband Plan.
The funding also contributes to support for a range of climate measures such as Just Transition and the Circular Economy. Just Transition supports communities transitioning away from fossil fuels to a low carbon economy together with an emphasis on creating sustainable employment in green enterprise particularly across the Wider Midlands region. The move to a Circular Economy will see initiatives being introduced such as a Deposit and Return Scheme. The funding will also assist Local Authorities to remediate landfills ensuring a better quality of life for the surrounding local communities.
It is not surprising given the current housing challenge that the Department of Housing, Local Government and Heritage has received the highest capital allocation of €17.6 billion for the period 2021-2025. These funds will be used to support the recently launched and ambitious Housing for All Plan . The NDP reiterates the commitments made in the Housing for All Plan (which includes the commitment to deliver 33,000 new homes on average per year). The NDP states that it will build on the successful model of providing social housing through Public Private Partnerships (PPPs) on local authority land.
The NDP sets out some of the key reforms to governance which are being implemented by the National Investment Office (“NIO”) in order to improve project appraisal and reduce the risk of project overspends as well as other initiatives which will increase the capacity of public bodies and the construction sector to deliver Project Ireland 2040 and the ongoing enhancement of procurement.
- Enhanced project and programme governance
Detailed analysis by NIO, supported by a cross sectoral working group, have concluded that two new elements are needed to strengthen the assurance process for major public investment projects (i.e. those with an estimated project cost in excess of €100 million) to provide more structured scrutiny. These new elements are the introduction of an independent external review of projects over €100m at two major decision gates in the project lifecycle  and a Major Projects Advisory Group to support DPER in assimilating the outputs from the external reviews and support DPER in quality assuring the strengthened process. The reviews will consider key issues including robustness of planned delivery, accuracy of cost forecasts, consideration of risk and appropriateness of governance and procurement strategies.
2. Increasing construction sector capacity and innovation
The NIO carried out a review of the NDP to calculate the employment impacts resulting from the public capital investment, specifically in the construction sector. The analysis estimates that an annual average of up to 80,754 direct and indirect construction jobs (including both employed and self-employed) will be sustained as a result of public investment over the period 2021 to 2030.
It is acknowledged that in order for the Irish construction section to meet the needs of Project Ireland 2040, capacity, innovation and digital adoption will need to be increased. In this regard, Government Departments will continue to engage on a regular basis with construction industry representatives via the Construction Sector Group (CSG) forum and investment will be made in further education with a focus on providing apprenticeships. The Department of Further and Higher Education, Research and Innovation has produced a new action plan for apprenticeships with a target of 10,000 new apprentice registrations per annum by 2025. New apprenticeship programmes in scaffolding (level 5), roofing and cladding (level 5) and advanced quantity surveying (level 9) are due to launch in 2021.
In addition, it is acknowledged in the NDP that there is a risk that investing too much over a given period could add to inflationary pressures in the construction sector. With that in mind, the NDP notes that continued monitoring of inflation and capacity constraints by the NIO in conjunction with the Construction Sector Group will be necessary to inform policy decisions related to this issue going forward.
3. Enhanced procurement
The Construction Policy Unit in the Office of Government Procurement (“OGP”) is currently developing the next Capital Works Management Framework. It is stated that this will deliver major changes to the procurement of public works projects the over the coming years. The first phase of the review of the CWMF will address the manner in which construction technical professionals are engaged while the engagement of contractors will form the second phase of the review.
Notably, reference is made to other issues “that are impacting successful outcomes that will also be addressed and implemented” which include risk management, managing price inflation pressures, reflecting quality in the award of contracts, liability, indemnity and insurance, performance evaluation, encouraging collaborative behaviour and adoption of BIM on public works projects.
In addition, the Commercial Skills Academy established by the OGP will provide necessary commercial skills training for Public Service managers who are responsible for managing capital projects under the NDP.
The information above provides a high-level summary of the NDP and in particular, the key investment priorities of the Departments receiving major investments in this NDP. Should you require further information, please do not hesitate to contact Kerri Crossen or Laura Mullen.
 Our analysis of this can be found here.
 The most recent Public Spending Code (linked above) referenced the new two stage external review process for projects estimated to cost over €100 million and noted that it would be developed and brought into effect in 2020.