News Ireland daily BLOG by donie

Monday 22nd February 2016

Not much space left for long-term capital investment vision in 2016 election promises


Electioneering is all about snappy promises and clever sound bites. There is little space for setting out a long-term vision. There are few votes in talking about sewers, drains or reservoirs, yet our capital investment spending is likely to determine the country’s prosperity 10 or 20 years down the line.

Spending on infrastructure all but collapsed after the 2008 crash.

This, in turn, delayed the roll-out of flood-relief programmes, the consequences of which have been there for all to see in recent months.

The housing crisis is another consequence of years of capital starvation at local government level.

This Government has been playing catch-up.

The economic recovery has resulted in much heavier demands on existing capital resources and in extra funds becoming available.

Late last year, the Government unveiled a €27bn capital investment programme, covering the six-year period to the end of 2021.

The plan looks good on paper, but it has been criticised for lacking ambition.

Economist Paul Sweeney, of Tasc, says the State should be spending an additional €15bn, to take advantage of historically low borrowing rates. Last December, he suggested that funds could come, in part, from the proceeds of a privatisation of Irish banks.

However, the recent collapse in bank shares has hit the prospect of any bank flotation in the short term.

The pensions industry could play a greater part in funding a roll-out of infrastructure. This is a natural fit. The funds invest for the long term and seek security, as opposed to stellar short-run returns.

But the industry needs to tackle its own conservatism, which is a product, in part, of law, with tight restrictions or duties of care imposed on trustees.

If the funds were to flow, we could begin to take the chance on a low-interest rate environment to start tackling gaps in our capital network.

Engineers Ireland, which represents 24,000 engineers, is critical of the neglect of key areas of infrastructure. It is seeking a doubling in investment, to 4% of national output.

Its director, Caroline Spillane, points to Ireland’s relatively low ranking, of 27th place, on infrastructure in the Global Competitiveness Index.

In its ‘State of Ireland’ report, last year, it awarded low grades, Ds, to the rail network, to non-primary roads, and under the heading of ‘sustainable transport’.

The country’s water and waste services received a ‘C’ grade, along with flood defences. The energy sector, and our airports, received a ‘B’, along with the communications network (a surprising accolade, given the state of our rural broadband).

In its upcoming report, the body is likely to focus on investment in energy (with flooding, presumably, also getting more attention).

Boosting the spend will be of little use if the funds are scattered like confetti.

The punters will be looking for cash for sexy local projects (such as football stadia).

Those demands must be resisted. Priorities must be established, such as motorways connecting provincial cities, decent nationwide broadband, water, and flood relief.

In Britain, a new Infrastructure Commission has been set up to ensure proper, long-term planning and resource allocation.

Tasc favours this approach, while Engineers Ireland goes further, seeking a super junior ministry for infrastructure.

British expert, John Armitt, believes that inter-agency co-operation is vital, saying that this approach explains the success of the London Olympics.

A change in political culture is required. Under General Charles de Gaulle, 1960s France led the way in the development of capital projects.

There was real direction at the top. The continent of Europe, in the post-war period, had no choice but to invest to rebuild.

As a result, it stole a march on a UK that was obsessed by a succession of balance-of-payments crises.

Britain fell behind, while impoverished Ireland languished in the slow lane, with a road network largely geared to the horse and cart.

However, we did find the resources to fund TB hospitals and an ambitious programme of public housing.

The bureaucracy has lost much managerial expertise in recent years.

Rebuilding this will take time. Our planning system is also in need of overhaul. While citizens must retain a role in decision-making, the ability of individuals to hold up projects appears to be excessive.

Engineers Ireland favours the creation of a national infrastructure unit within the Department of the Taoiseach.

A similar approach worked well in the late 1980s, at the time of the launch of the IFSC financial centre.

The unit would attract senior officials from key spending departments and from the Department of Finance.

Locating it in the Taoiseach’s department would ensure that Merrion Street — while having a guardianship role — would not be allowed to smother project proposals at birth.

Correctly, Engineers Ireland believes that projects should be independently assessed by an expert (who would, presumably, operate at arm’s length from the well-financed special interests pushing their pet projects).

Britain’s Andrew Adonis, a member of the House of Lords, has led the way in pressing for new approaches to capital projects. He talks about the science of delivery of public projects.

Such a delivery unit was set up by the Blair government, with a tight focus on well-designated targets.

The recession there caused public net investment to crash to just 1.5% of GDP. Among the results of this: crowded trains and congested highways.

However, John Armitt believes — somewhat controversially — that it would all be a lot worse had not Britain’s railways been privatised.

As a result, vital investment, not otherwise available, was attracted in.

A key problem, in the past, has been that people have not been able to invest in long-term projects with the assurance that the rules would not be changed halfway through the game, by an incoming government or cabinet minister.

Armitt singles out Chancellor George Osborne’s recent crackdown on the solar industry for criticism.

Two-thirds of the funds for capital projects in the UK come from private finance. Investors require a climate of confidence.

They need to be able to take a 20-30-year view on their investments, not a two-three year one. Ireland, too, will require private finance, but the taxpayer will have to stump up, at the same time.

This message needs to be spelled out.

We simply cannot get proper infrastructure on the cheap, whatever certain politicians might have one believe.

Beware of slick promoters promising the sun, moon and stars, but slipping-in the small detail with some long-lasting financial stings.

Ireland’s home repossessions increased by a massive 80% for 2015


Home repossessions rose by a massive 80% last year with an extra 1,500 people declaring themselves homeless.

Some 758 repossession orders were granted by the Irish court service for the first nine months of 2015.

And there was a total of 1,088 repossessions occurring over the same period.

The Peter McVerry Trust say Dublin had the second highest number of ‘primary’ home repossessions – 86 homes in the capital were repossessed.

Reacting to the figures CEO of the Trust, Pat Doyle, told the Irish Independent that there is no chance of long-term homelessness being eliminated in 2016, with yesterday being three years to the day since the homelessness policy statement.

“Mortgage arrears is an issue that has been regularly highlighted,” said Mr Doyle.

“The signs are there to suggest that repossessions by financial institutions are leading to increasing numbers of sitting tenants being evicted into homelessness.

“The repossessed homes and rental units are then left empty until such time as the financial institutions see fit to make use of them.

“This practice goes unchallenged, despite the most acute housing shortage on record and ever increasing homelessness.”

“The overall homeless figure continues to rise despite a record number of people leaving homelessness in 2015.

“even though an estimated 2,000 people left homelessness last year, there were still 5,400 people homeless at the year end – a net increase of 1,500 people,” Mr Doyle said.

Ireland’s student nurses and midwives to receive a pay rise from March 1st this year

INMO general secretary Liam Doran welcomes the pay rise, which arises from the Lansdowne Road Agreement


INMO general secretary Liam Doran (above left) said pay restoration for student nurses and midwives went “some way” to correct a serious wrong done to young nurses and midwives in 2011/12. 

Pay rates for student nurses are to be increased from the beginning of March under a new deal agreed between the Government and the nursing unions.

About 1,400 student nurses and midwives a year will benefit from the pay rise, which arises from the Lansdowne Road Agreement.

Pay for student nurses during their final-year placement is being increased from 55% of the first point of the staff nurse salary scale to 70%. As a result, pay for student nurses will rise from between €6.49 per hour and €7.79 per hour at present to €9.49 for the period they spend working in hospitals or a clinical setting.

In future, the 36 weeks that student nurses work in hospitals will also be recognised officially as they move along the incremental scale. The Irish Nurses and Midwives Organisation (INMO) said this would result in a new graduate moving to the second point of the scale, worth over €2,000, after 16 weeks.

The position of those who graduated since 2011 will be considered in a further review. The union said it would pursue retrospective incremental credit for the graduate classes in 2011 and 2015.

INMO general secretary Liam Doran welcomed the pay restoration and said it went “some way” to correct a serious wrong done to young nurses and midwives in 2011/12.

“We also acknowledge the recognition, by Ministers Kathleen Lynch, Brendan Howlin and Leo Varadkar, that this issue had to be addressed and that paying young nurses/midwives less than the minimum wage was wrong and could not be continued.”

“The INMO will continue to pursue the outstanding issue of granting incremental credit to recent graduates. We believe that this is necessary in our continuing effort to recruit, and retain, young graduate nurses/midwives to our health service which remains severely understaffed”.

The Union of Students in Ireland also welcome the announcement and said it hoped few young nurses and midwives would emigrate as a result.

An improving economy?

Ministers Lynch and Varadkar said it was a reflection of the improving economic circumstances that the health service was now in a position to improve the rate of pay for students and to restore recognition of the duration of the placement for incremental credit purposes into the future.

This is the fifth measure introduced in recent months to boost recruitment and retention of nurses, they said. Other measures include: a first stage of pay restoration; a cut in the Universal Service Charge; a €1,500 vouched education bursary for new recruits;, more permanent contracts and relocation payments, and payments for taking on duties from doctors.

The number of nurses employed by the HSE since last year has increased by 900, according to the Department.

More than 200 jobs to go as Brinks ceases operations in Ireland


A spokesperson for Brinks today said that the Irish cash-in-transit market has not been profitable in recent years

More than 200 jobs are to be lost after cash-in-transit firm Brinks confirmed that it is to cease its operations in Ireland.

Trade union Siptu said it is very angry with the decision after reaching a major restructuring deal with the company as recently as last month to safeguard Brinks’ future.

However, a spokesperson for Brinks today said that the Irish cash-in-transit market has not been profitable in recent years, and they do not see opportunities for growth going forward.

The job losses will affect staff in Dublin, Cork and Galway.

Siptu Organiser Brendan Carr said staff at the firm are extremely disappointed.

“Unfortunately, despite the sacrifices of its workforce and their willingness to adapt to the company’s demands it has still decided to end its operations,” said Mr Carr.

“These jobs have been endangered, in part, due to the operation of low cost employers in the security industry.

“The workers are extremely disappointed by this announcement.”

Mr Carr said he hoped the staff would be able to find new employment but he criticised Brinks one month after it reached a deal with staff to secure their jobs.

“These workers are licensed to work in the cash in transit industry and where possible it is hoped that they can transfer to a new employer along with the contracts that are currently being serviced by Brinks Ireland.

“Only last month, union representatives finalised an agreement with management on a major restructuring deal which we were ensured would safeguard the company’s future in Ireland.

“These companies do not adhere to the established terms and conditions of employment in the cash in transit sector.”

Global sea levels could rise to up to four feet by year 2100?


Global sea levels rose faster in the 20th century than at any time in the previous 2,700 years, research has shown. And scientists believe that without global warming sea levels might actually have fallen in the last 100 years.

Instead they are said to have increased by an average 14 centimetres (5.5in) between 1900 and 2000.

Without a rapid reduction in greenhouse gas emissions, worldwide sea levels are on course to rise by between one and four feet by the end of this century, it is claimed.

Conservative estimates say seas off the Kennedy Space Centre in Florida will rise five to eight inches by the 2050s – but that could become 21 to 24 inches if ice sheets continue melting at current rates (AP)Even if the ambitious goals of the 2015 Paris Agreement to manage climate change are adopted, sea levels are still projected to rise by as much as two feet.

The evidence is contained in two separate US and German research papers published in the journal Proceedings of the National Academy of Sciences. Both used new statistical approaches to assess sea level trends.

For the first, a US team led by Dr Robert Kopp, from Rutgers University, analysed data from a host of geological indicators spanning almost 3,000 years. The database included records from marshes, coral atolls and archaeological sites from 24 locations around the world.

The results showed that global sea levels fell by about three inches between the years 1000 and 1400, which coincided with a planetary cooling of around 0.2C.

Sea levels aren’t falling around the island village of Kivalina, an Alaska Native community of 400 people already receding into the ocean (Andrew Harnik/AP)In contrast, today’s global temperature is about 1C higher than it was in the late 19th century.

Without global warming, it is likely that sea level change during the last century would have ranged between a fall of 1.2 inches and a rise of 2.8 inches.

Dr Kopp said: “The 20th century rise was extraordinary in the context of the last three millennia – and the rise over the last two decades has been even faster.”

What does the future hold for coastal cities and towns? (John Minchillo/AP)The German study used a new prediction model that combined physics-based calculations of changes, such as ice sheet melting and heat-induced expansion of sea water, and recorded data from observations made during the last century.

Feeding the information into simulations for three greenhouse gas scenarios proposed by the Intergovernmental Panel On Climate Change revealed a rise in sea levels of between one and four feet by the year 2100.

This was broadly in line with the US study, which forecast a rise of between 1.7 and 4.3 feet if the world continues to rely heavily on fossil fuels.

The World Bank says Sri Lanka is one of the South Asian countries likely to be hit hard by rising sea levels (Eranga Jayawardena/AP)Lead scientist Dr Anders Levermann, from the Potsdam Institute for Climate Impact Research, said: “With all the greenhouse gases we already emitted, we cannot stop the seas from rising altogether, but we can substantially limit the rate of the rise by ending the use of fossil fuels.

“If the world wants to avoid the greatest losses and damages, it now has to rapidly follow the path laid out by the UN climate summit in Paris a few weeks ago.”

More than 600 million people live in vulnerable coastal areas less than 10 metres (32 feet) above sea level. Two thirds of cities with populations of more than five million are located in these high-risk areas.

The US Environmental Protection Agency estimates that 26,000 square kilometres (10,000 square miles) of land would be lost if global sea levels rise by two feet.


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