The Benefits as well as the Costs of the National Broadband Plan

There are significant benefits associated with the planned rollout of the National Broadband Plan (NBP), though the recent media coverage seemed to focus largely on the costs.

A review of newspaper headlines over the period following the announcement of the preferred bidder and the likely cost of the National Broadband Plan (NBP), suggests that the overall benefit is significantly lower than the cost. For example some of the headlines included;

  • Its wrong to endorse broadband plan and ignore officials’ warning on costs, Independent, 12 May 2019
  • National Broadband Plan, labelled ‘the worst deal ever seen’ Irish Examiner, 13 May 2019
  • Government to press ahead with €3bn broadband plan despite cost warnings, 26 April, 2019

But in reality, the cost benefit analysis (CBA) conducted by consultants on behalf of the Department of Communications, Climate Action and Environment, found that under all three different scenarios considered, the benefits outweigh the costs. The CBA also made clear that many benefits were not included in the computations and some of the benefits were estimated on a very conservative basis.

The Costs and Benefits of the National Broadband Plan

The table below shows the costs and benefits anticipated under three different scenarios; pessimistic, central and optimistic. There is a detailed analysis showing how each of the costs and benefits are computed, all of which is published and available for download on the Department of Communications website, see here  (825KB)

Costs: The total project costs include both costs to the State and costs to the operator.

Benefits include benefits to residents and enterprises. The residential benefits refer to the residents who will benefit from the NBP through various savings which will be made in communications services, time savings through online access of services as well as time and cost savings from remote working.

The enterprise benefits refer both to benefits to all firms, those within the NBP area and those outside it.

For firms outside the NBP area one of the largest benefits to be realised is that many of their staff (who live in the NBP area) will now have better broadband access enabling productivity gains from remote/tele-working.

For firms within the NBP area, all SMEs will benefit. Farm enterprises will be able to engage in smart farming, while all SMEs will benefit from higher upload and download speeds to serve their clients and suppliers more efficiently.

Scope of Costs and Benefits

Table 1 shows that under all three scenarios the benefits of the NBP exceed the costs. In the analysis, the entire range of costs have been considered and furthermore they are capped and there are various clawback mechanisms to ensure limited and capped costs to the State.

The benefits that have been measured are just some of the range and a whole range of benefits have not been included. As the CBA report notes, in including and profiling benefits, the consultants adopted a deliberately conservative approach to ensure benefits were not overstated. As a result, there are important categories of benefits which are not quantified and therefore not included in the CBA analysis. Table 2 below provides an overview of these benefits and examples of how households and enterprises in the NBP area may benefit.

Measuring benefits – Other international examples

In making the case for various state supports and state aid for broadband investment, other countries have also grappled with how to measure and capture benefits. While investment in fibre networks can be evaluated in a similar fashion to investment in other infrastructure, technological innovation and new product and service developments are continually extending the range of benefits from investment in broadband infrastructure generally and fibre deployment in particular. Consideration of these other benefits is not new and other countries have valued the benefits of fibre rollout across various sectors.

For example, research undertaken in Sweden provides some economic calculations on additional returns to fibre which need to be captured in evaluation. In Sweden, higher rents are charged for homes with fibre connectivity. Tenants pay an extra €5.50 per month for a home with a fibre connection and this is valued at €267 million per year for all fibre connected homes, which yields €185.6 million per annum return on investment.

Investment in fibre networks can also reduce telecommunications costs to the user, for example the Stockholm Regional Council (regional government) reduced its telecommunications costs by 50% following deployment of the fibre network. This is attributed to increased efficiency and greater competition with more telecommunication operators providing services on the high capacity fibre network.

The development of eHealth technologies including remote monitoring and diagnosis will provide opportunities to deliver some healthcare direct to the community rather than through hospitals. Community care is generally significantly less expensive than hospital care. The greater bandwidth and symmetrical (upload and download) speeds with fibre networks can support those applications requiring very good upload and download speeds. As many of these applications such as eHealth are still being developed, it is difficult to estimate their full value and benefit.

At a wider economy level, the OECD has examined the benefits arising to other economic sectors (transport, health, education and electricity) of a national ‘fibre to the home’ network. The analysis examines the cost of deploying ‘fibre to the home’ across different OECD countries, including Ireland, and has estimated that the combined savings in each of the four sectors over a 10 year period could justify the cost of building a national ‘fibre to the home’ network. These examples are outlined in the WDC report, Connecting the West, Next Generation Broadband in the Western Region, see here (1.5MB).

Measuring the benefits of State investment should also take account of the impact on other Government policy objectives. More balanced regional and rural development and greater regional economic growth are important Government policy objectives.

State Aid

The Telecoms sector just like most other economic sectors are subject to strict EU State Aid Rules. State aid is subject to very strict criteria, one of which is that there is market failure. In the NBP areas, defined according to a detailed mapping process which was undertaken as part of the requirements for State aid, it is clear that no commercial deployment of high speed broadband has been or is likely to occur. This is then a case of market failure. Just as with other utility provision (transport, water, energy) the State intervenes where commercial provision does not occur.

One of the other criteria for State aid is that the aid serves an Objective of Common Interest. The European Commission’s Digital Agenda for Europe (DAE) is an objective of common interest to which Ireland has committed and this sets out a minimum of 30Mbps download for all homes and businesses by 2020. Given the increasing demand for higher speeds the EU Commission has revised upwards the target for member states which is now to achieve a basic service of 100 Mbps for all households by 2025. This objective and need to reduce the current digital divide complies with State aid requirements.

Conclusions

The NBP has been subject to probably the most extensive, thorough and comprehensive evaluation both within various Government Departments as well as across the wider public domain.

When the benefits exceed the costs, and the costs are capped while the benefits that are measured are only partial and conservatively estimated then the results of the CBA are positive and clearly make the case to proceed with the investment.

The full report on the benefits from the NBP (February 2019), is available for download on the Department of Communications website, available here (2.5MB).

The NBP Cost Benefit Analysis report (April 2019), is available for download for the Department of Communications, see here  (825KB).

 

 

Deirdre Frost

Measuring Rural Poverty – It’s Complicated!

 

At Risk of Poverty

Within the same CSO release, the data show that the at risk of poverty rate decreased from 16.2% in 2016 to 15.7% in 2017. Examining the at risk of poverty rate spatially, the rate is higher in rural areas[1], compared to urban areas; the at risk of poverty rate in rural areas is 17.2% in 2017, compared to 15.1% in urban areas. Moreover the trend over the last two years shows a divergence, with the urban rate declining – from 15.9% to 15.1%, while the rural rate increased from 16.9% to 17.2%.

The CSO release also provides a breakdown by region. The data indicates that the at risk of poverty rate is higher in the more rural regions (Northern and Western) with 21.8% or over a fifth of the population there at risk of poverty. This is in contrast to the rate within the Southern region (16.8%) and it is lower again in the more urban Eastern and Midland region (12.8%).

Deprivation Rate

The CSO also measure the deprivation rate, which is a broader measure than poverty and is defined as follows: Households that are excluded and marginalised from consuming goods and services which are considered the norm for other people in society, due to an inability to afford them, are considered to be deprived. This measure of the marginalised or deprived is currently achieved on the basis of a set of eleven basic deprivation indicators as follows.

  1. Two pairs of strong shoes
  2. A warm waterproof overcoat
  3. Buy new (not second-hand) clothes
  4. Eat meal with meat, chicken, fish (or vegetarian equivalent) every second day
  5. Have a roast joint or its equivalent once a week
  6. Had to go without heating during the last year through lack of money
  7. Keep the home adequately warm
  8. Buy presents for family or friends at least once a year
  9. Replace any worn out furniture
  10. Have family or friends for a drink or meal once a month
  11. Have a morning, afternoon or evening out in the last fortnight for entertainment

Individuals who experience two or more of the eleven listed items are considered to be experiencing enforced deprivation and this is the basis for calculating the deprivation rate.

The deprivation rate nationally has shown a decrease between 2016 and 2017, from 21% to 18.8%. At a spatial level it appears that there is a higher rate of deprivation in urban areas than in rural, in 2017 the urban deprivation rate was 20.2%, while in rural areas it was 15.9%. Similarly the more rural Northern and Western Region has a lower deprivation rate in 2017 (17.3%), compared to 18.7% for the Southern Region and 19.5% for the Eastern and Midland region.

Consistent Poverty

Finally, the other commonly used measure of poverty, is the consistent poverty rate. An individual is defined as being in ‘consistent poverty’ if they are

  • Identified as being at risk of poverty and
  • Living in a household deprived of two or more of the eleven basic deprivation items listed above

Nationally the rate went from 8.2% in 2016 to 6.7% in 2017. At a spatial level, like the deprivation rate, the consistent poverty rate is slightly higher in urban areas than in rural areas. In rural areas the rate was 5.3%, compared to 7.4% in urban areas.

Measuring Deprivation: Access to Services?

The measurement of poverty in its various ways has become a lot more sophisticated than a simple examination of income. The at risk of poverty rate and the deprivation measurement places poverty in the context of the society and environment in which it occurs and this is welcome.

It is often said that rural poverty, is more hidden or less visible than urban poverty. Overall the CSO recent data show that rural areas have a higher at risk of poverty rate, compared to their urban cousins, but have lower deprivation and consistent poverty rates.

However the definition of deprivation is based on enforced deprivation where there is an inability to afford goods and services. But what of the inability to access goods and services because they are not available in the locality. Is the inability to access broadband a deprivation? Many rural residents think so. It impacts on their ability to access goods and services on-line and often impacts on their ability to generate their incomes, for small businesses and the self-employed.

And, in the absence of broadband, what of access to services such as banks and post offices?  Is it enforced deprivation, when these services were once available within the community and are no longer there?  Is it enforced deprivation when access is not available online and there are limited if any transport services to travel to the next available centre to access the closest banking or post office facilities? Most would consider Yes, that this is enforced deprivation.

Those communities that are not being served by the commercial broadband providers now and are awaiting a decision to start the National Broadband Pan (following its original announcement seven years ago) are and will continue to remain deprived for years to come.

On 4th February this year, Social Justice Ireland, issued a press release entitled Time for Government to commit to eradicating poverty, see here. In it they point to the importance of being able to access high quality public services. On the same day, Social Justice Ireland published their Social Economic Review 2019, which highlights in detail the importance of access to broadband, financial services and other public services in helping to deliver a fairer Ireland. The publication has a specific chapter on the issues and challenges for all those living in for rural and regional Ireland see here.

Deirdre Frost

 

[1] Since 2014 areas are now classified as Urban or Rural based on the following population densities derived from Census of Population 2011: Urban – population density greater than 1,000,  and Rural: Population density <199 – 999 and Rural areas in counties.

A National Digital Strategy needs a National Broadband Plan

The delay in the procurement process arising from the Peter Smyth enquiry has led to a vacuum emerging and a debate on the solution needed to deliver high speed broadband to all. This is being filled by discussion of the perceived benefits of alternative technologies and the potentially very large costs of a largely fibre based deployment.

What has got very little airing is that the planned Government investment (and that of some of the commercial operators), is likely to be a once in a 25 year investment at minimum. It follows various initiatives in the Department of Communications, Climate Action and Environment such as the National Broadband Scheme (2009-2014) and the Rural Broadband Scheme (2011), which were aimed at delivering basic broadband services, the experience of which informed Department officials and Government, of the need to deliver a long-term future proofed solution.

Meanwhile the 80 or so officials in the Department of Communications and the opinions of outside experts, brought in at various stages to inform and guide the design of the tender process, who have extensive knowledge and expertise must stay silent. These are the experts who could better inform the debate, but must stay silent, again to protect the procurement process.

Across the country life goes on and Christmas, one of the busiest retail periods is upon us. In the absence of the deployment of the NBP, the opportunity to engage in online sales is heavily restricted or prohibitive for many smaller based businesses trying to operate from regional Ireland. In a recent report, this situation was described as for businesses in small towns, not having broadband is akin to operating with one hand tied behind their back. See here.

Meanwhile the Department of An Taoiseach issued a call for Submissions to the Public Consultation to inform Ireland’s new National Digital Strategy. In its response the WDC highlighted the importance of;

1. Broadband access as an enabler. There is a significant imbalance in the equity of digital services; urban centres are generally well served but rural areas have poorer service levels and limited competition and investment. Census 2016 Summary results show that overall, 76.2 per cent of the State’s urban households had broadband compared with 61.1 per cent of households in rural areas.

2. The opportunity cost of poor infrastructure is hard to estimate but undoubtedly it can have a significant negative effect on SMEs. There are significant opportunities available to enterprises in rural and regional areas arising from easy access to the global marketplace through on-line sales. Three in four consumers say that they are more likely to purchase from a business that has an online presence1. One of the key constraints is poor internet access and 27% of SMEs without a website say it is because they do not have a good internet connection. At a regional level the same survey found that 14% of Irish SMEs rate their internet connection as ‘poor’ or ‘very poor’ and this figure rises to 25% in Connacht and Ulster.

3. The WDC submission also highlighted the importance of appropriate training. Adoption and application of new learning is likely to require ‘a little and often’ approach in recognition that a ‘use it or lose it’ approach applies. The focus therefore should be given to using the internet on a regular basis as well as those tasks that occur more infrequently, on an annual basis such as booking a holiday or paying motor tax on line. Those tasks (and benefits) which can be undertaken and realised on a more frequent basis will help ensure greater take-up.

But all ultimately rests on high speed broadband provision for the 540,000 premises still disconnected. The WDC submission on the Digital Strategy is available here.

 

Deirdre Frost

Broadband benefits – but when?

Recent statistics show that Ireland will not meet the EU 2020 targets for the universal availability of fast broadband[1]. Like other EU states, in Ireland there are particular challenges delivering fast broadband to rural areas and this is not helped by the complicated and lengthy procurement process.

Given the many initiatives in the recent past aimed at delivering better universal broadband, the WDC has believed that this current Plan, aimed at providing ‘future proofed services’ is the right approach, however given the fast pace of technological change, it is and will be imperative that future proofed technology is at the cornerstone of delivery to all.

There have been various analyses of the economic and social benefits of broadband and some Irish research was presented at a recent ESRI seminar. The seminar, titled Evidence of Some Economic effects of Local Infrastructure in Ireland focussed on the economic benefits of broadband infrastructure. Key findings included:

  • The availability of broadband infrastructure is a significant determinant on the location of new business, but its effects may be influenced by the presence of the levels of human capital and skill levels in the area.
  • Therefore when rolling out broadband in a structurally weak area, parallel measures to boost human capital should be deployed.
  • Human capital and proximity to third level institutions is important for all firms.
  • The effect of broadband depends on education levels within an area.
  • Infrastructure roll-out can help to re-balance economic activity.
  • Government departments and agencies usually have discrete mandates designed not to overlap too much.
  • Decisions to build infrastructure often not taken together (e.g. broadband or transport) or considered along with other factors such as health care provision or education.

The latter two points in particular highlight the need for co-ordination and the value of a comprehensive spatial and economic development plan such as Project Ireland 2040. See here for more information on the ESRI seminar.

Previously, the Department of Communications, Climate Action and Environment conducted its own research which examined the benefits of high speed broadband and research and this is available here. In particular the research identified travel savings through more remote working and increased gross value added, see here.

The analysis measured benefits arising from delivery of high speed broadband planned under the forthcoming National Broadband Plan, to the ‘Intervention Area’ (IA), which comprises approximately 757,000 premises across rural areas throughout Ireland. These areas are not currently receiving high speed services from commercial providers.

The analysis found that each house in the IA could yield a benefit of €89.00 per household per annum resulting from journey time and fuel cost savings from increased e-Working as a consequence of the availability of high speed broadband. This would amount to an annual total saving of €48.39 million, which does not include other benefits such as carbon emissions savings etc.

Increased productivity is also forecast, generated from improved productivity of white collar workers living in rural areas (the IA) but commuting to work in urban areas. This shows the benefit to the enterprise expressed as an increase in GVA per employee of 1.53% (€1,342) per worker, working from home or remote working on a 1 day per week basis. This does not capture benefits such as increased staff retention and more satisfied employees.

Research elsewhere reflects some of the findings of the ESRI research. For example, work undertaken in the US by Professor Mark Partridge found that our review of the economic research finds that broadband’s contribution to economic development in rural regions is often overstated. Broadband expansion does produce positive economic effects in certain rural area, specifically more populated rural counties adjacent to metro areas.

The same research quantifies the economic benefits of additional consumer choice, produced when households are able to access a broader range of products and services at lower prices. The research conducted in Ohio, see here, estimates that reaching full broadband coverage there would generate between $1 billion and $2 billion in economic benefits over the next 15 years. This estimate does not include other potential benefits that broadband offers such as reducing the period of unemployment among job seekers.

Professor Mark Partridge is due to present at the forthcoming Regional Studies Association Irish Section Annual Conference, to be held in Sligo IT on Friday 7th September 2018.

The theme of the conference is ‘City-Led Regional Development and Peripheral Regions’ and the call for papers is now open. Further details are available here.

The WDC believes that to realise all benefits from next generation broadband, it is imperative that the National Broadband Plan deploying future proofed broadband is delivered as soon as possible.

Deirdre Frost

[1] Reported in Irish Times 6th June 2018

Capital Infrastructure priorities – Broadband remains top of the list!

Engineers Ireland recently published The State of Ireland 2017, which focuses on the state of Ireland’s infrastructure and the extent to which it is fit for purpose. This is timely as the Government are in the process of considering the capital infrastructure priorities to be funded over the next few years.

This State of Ireland 2017 report, download here (3.4MB), is the seventh in a series of annual independent reports, on the state of the country’s infrastructure, informed by panel discussions and expert advisory groups.

This year’s report focuses on two key sectors, transport and communications though the report also makes separate recommendations on the infrastructure areas of energy, water supply and wastewater; flood management, water quality and waste infrastructure.

Transport

Ireland’s transport system was awarded a ‘C’ grade – meaning it is of mediocre standard: It is inadequately maintained, and / or unable to meet peak demand, and requiring significant investment. The report notes that investment in Ireland’s transport infrastructure is simply too low to support economic growth and jobs and more investment is needed to reduce congestion and increase sustainability.

Communications

The WDC was a member of the Communications Advisory Group which considered the coverage and connectivity of Ireland’s communications network and how Ireland’s communications network rates with the country’s needs.

As is evident from the report, unlike any other infrastructure considered, the quality of the broadband and communications network was graded spatially. A different grade was awarded depending on whether the infrastructure was located in urban, intermediate urban or remote rural areas which highlights the different quality of the infrastructure depending on location.

The urban areas are classed as the five major cities of Cork, Dublin, Galway, Limerick and Waterford. Intermediate urban areas are those other urban areas and surrounding townlands. The third category, rural including remote rural are the hinterlands of towns and remote locations.

Considering the question How would you rate Ireland’s communications network with the country’s needs, urban and intermediate urban were awarded a ‘B’ grade, whereas rural areas were awarded  ‘D’, conveying a poor, below standard poorly maintained, frequent inability to meet capacity and requiring immediate investment to avoid adverse impact on the national economy. The report notes that in rural and remote rural areas, State intervention is needed and the Government’s NBP programme must intervene for 542,000 premises representing 21% or one million of the national population.

For those of us who have long advocated that intervention is needed and that the National Broadband Plan needs to be implemented speedily and comprehensively, none of the report’s finding are a surprise. However the fact that the Communications Advisory Group, composed of companies such as the main telecoms providers, the telecoms regulator and Google among others, highlights the universal agreement that investment is needed as a matter of urgency.

Census 2016

Elsewhere, publication of Census 2016 data provides county data on broadband use in households.

Census 2016 Summary Results Part 1 Section 9, download here (1.1MB) shows the increasing take-up of broadband nationally, from 20% in 2006 to 70.7% in 2016.

The report also highlights the rural – urban divide where 61.1% of households in rural areas have a broadband connection compared to 76.2% of urban households. Looking at counties in the Western Region, all have a broadband rate lower than the state average of 70.7%, apart from Galway city, see Fig 1 below. Leitrim and Roscommon have the lowest broadband rates across the Region with 58% and 59.8% respectively.

Fig 1. Percentage of households with broadband internet access, Western counties 2006-2016

The National Broadband Plan

These same counties are relatively poorly served with broadband infrastructure. As the State of Ireland 2017 report shows the more rural areas are often the least well served. Under the National Broadband Plan the Western Region counties are among those requiring the most state intervention in rolling out high speed broadband networks. While 23% of premises nationally will be included in the National Broadband Plan ‘Intervention Area’, the rate is much higher across the Western Region with an average of 36.5% of all premises. Counties such as Roscommon and Leitrim are particularly dependent on the National Broadband Plan with 48% and 51% of premises respectively in the NBP Intervention area. The state intervention area in the other counties of the Western Region extends to 44% of premises in Mayo, 36% in Sligo, 34% in Donegal, 34% in Clare and 29% in Galway.

How Ireland Compares Internationally

Data recently released from the OECD highlights the need for urgent investment in Ireland’s fibre based broadband infrastructure. As Figure 2 below shows, Ireland is nearly at the bottom of the pile for the percentage of fibre connections as a share of total broadband subscriptions.

Fig 2. Percentage of fibre connections in total broadband subscriptions, December 2016

Located 4th from the bottom of OECD countries, this data published in July 2017 relates to December 2016 and there is likely to be an improvement since then, however the relative position of Ireland in the OECD group shows how far we are from being in the top tier. Without a doubt, investment in fibre connectivity throughout the country is needed. These data and additional comparative data across the OECD are available for download here.

 

Deirdre Frost

What are the Capital Infrastructure Priorities for the Western Region?

Last week the WDC made a Submission to the Public Consultation on the Mid-term Review of the Capital Plan 2016-2021.

The consultation sought views as to what should be included in the current Plan (€42 billion), over and above what is already included – arising from additional resources (€5 billion) being made available.

In addition, an interesting and welcome aspect was that the Consultation also sought views on the criteria which should inform consideration of the capital investment choices to be made. This was in the context of the remainder of the current plan, but also and arguably of more importance in the context of a longer term 10 year Capital Plan.

This idea of a longer term 10 year Capital Plan acknowledges another important Public Consultation underway – the National Planning Framework (NPF) and the need to consider investment priorities which would align and support the final NPF. A draft NPF is due for consideration over this Summer.

In discussing the Considerations for the Mid-Term Review of the Capital Plan (Section 2), the WDC highlighted the importance of infrastructure for regional development where all regions need quality infrastructure to compete effectively. The WDC submission also noted;

  • The importance of long-term planning, as decisions made on infrastructure now have very long term impacts.
  • The need to invest to join existing networks together and complete ‘unfinished sections’. For example once the Gort-Tuam motorway is complete, the priority should then be to improve the outstanding sections between Tuam and Sligo to ensure a high quality road network.
  • Identify and utilise existing available capacity before considering new investments at congested sites. For example there is international air access capacity available at Shannon and Ireland West Airport Knock. Another example is to develop more attractive services on the rail network, which is a valuable transport asset with capacity to ease congestion on the road network and help us meet Ireland’s climate change obligations.
  • Develop inter-regional linkages. While connectivity to Dublin from most regions has improved considerably in the last decade, inter-regional connectivity is relatively poor. By improving inter-regional connectivity, such as improving the road network between the urban centres in the Mid-West, West and North West then the investment potential of the key urban centres there can be enhanced.

The WDC submission also notes the importance of appropriate appraisal and evaluation methods when considering alternative investment projects. The capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined. The traditional cost benefit approach will naturally favour the larger and often largest population centres as the impacts are likely to be felt by a greater number, wherever the project is being delivered. To realise better spatial balance, there will need to be a change to the conventional appraisal and evaluation methodologies which are typically used to determine what projects proceed. The impact on the wider spatial balance of the country should be factored in.

In the section examining the prioritisation of Capital Expenditure and Selection of Projects/Programmes in current Capital Plan (Section 3), the WDC focused on the infrastructure areas it considers critical for Western development.

Key priority infrastructural investments include:

  • Funding to deliver and complete the National Broadband Plan as soon as possible to ensure high speed broadband for all.
  • National primary road improvements including N4, N5, N6, M17, M18, incorporating the Atlantic Road corridor.
  • National secondary roads see WDC Submission for specific priorities.
  • There is a need to increase regional and local roads funding to allow road maintenance programme to be enhanced.
  • The importance of Bus services and the Rural transport programme to citizens in the Western Region is highlighted.
  • Continue investment is needed to support increased rail frequencies and service levels on routes serving the Western Region.
  • Ongoing support for improvements and access to Ireland West Airport Knock and Shannon.
  • Investment in the electricity network and natural gas infrastructure is made through the commercial state sector, but it should be co-ordinated and monitored through the Capital Investment Plan.
  • Apart from completing all energy commitments in the Capital Plan there should be investment to connect to the natural gas grid at Athenry, Ballyhaunis and Knock, all three of which qualified for connection in 2006.

In Section 4, Long-term Capital Investment Framework (10 years), the WDC Submission examines the longer-term considerations needed for effective capital investment. The WDC believes that capital investment which is by its nature long-term investment should be undertaken within the context of a longer term planning framework as is proposed in the National Planning Framework 2040. The WDC has made a detailed submission to the NPF (4.5 MB) consultation conducted by the Department of Housing, Planning, Community and Local Government.

Other considerations include:

Capital spending on new infrastructure should focus on supporting better spatial balance as well as supporting those citizens and that part of the country which is relatively poorly served. Quality infrastructure is one of the necessary conditions for regional development.

Investment in road infrastructure to join existing networks together and complete ‘unfinished sections’. For example in the West/North West. These are often infrastructure requirements needed to satisfy current as well as future demand.

As outlined previously, the state should capitalise on the capacity already available and ‘sweat’ the state investment already made, such as in transport, for example the rail network and the international airports with spare capacity such as Shannon and Ireland West Airport Knock. Other examples include educational infrastructure (Institutes of Technology), Health facilities and Housing.

Policy will also influence the infrastructure investments needed. The need to lower carbon emissions will help influence infrastructural investments (for example supporting cleaner transport modes).

Another consideration is to enable greater policy integration and joined up investment decisions across all sectors, for example planning, employment and transport policy sectors, which are proven to help to make sustainable and active travel more attractive alternatives to the private car.

A good example is the benefits which could be realised through increased e-Working, see WDC Policy Briefing No.7 (748 KB) which can reduce transport demand, traffic congestion and emissions. It has been estimated that if just 10% of the working population of 2.1 million were to work from home for 1 day a week, there would be a reduction of around 10 million car journeys to work per annum[1]. Benefits arising from higher broadband speeds and greater levels of e-Working include time savings, enhanced communications, increased sales and productivity gains[2]. To promote greater take-up, e-Work needs to be prioritised as a policy objective and a cross departmental approach is required. Lead departments would include the Department of Jobs, Enterprise and Innovation and the Department of Communications, Climate Change and Environment.

The WDC Submission is available for download here (4 MB).

Deirdre Frost

[1]Department for Transport, Smarter Travel: A Sustainable Transport Future, A New Transport Policy for Ireland 2009-2020 http://www.smartertravel.ie/sites/default/files/uploads/2012_12_27_Smarter_Travel_english_PN_WEB%5B1%5D.pdf#overlay-context=content/publications. p.35

[2] Indecon International Economic Consultants, July 2012. Economic / Socio-Economic Analysis of Options for Rollout of Next Generation Broadband. Analysis undertaken on behalf of the Department of Communications, Energy and Natural Resources (DCENR) as part of the Government’s National Broadband Plan, 2012. http://www.dccae.gov.ie/communications/SiteCollectionDocuments/Broadband/National%20Broadband%20Plan.pdf

Key Issues for the National Planning Framework – Submission from the WDC

The WDC  made its submission on Ireland 2040 – Our Plan: National Planning Framework   yesterday.  The Issues and Choices paper covered a wide range of topics from national planning challenges to sustainability, health, infrastructure and the role of cities and towns.  A key element of the paper considered the future in a “business as usual” scenario in which even greater growth takes place in the Dublin and Mid East region with consequent increased congestion and increasing costs for businesses and society, while other parts of the country continue to have under-utilised potential which is lost to Ireland.  The consultation paper therefore sought to explore the broad questions of alternative opportunities and ways to move away from the “business as usual” scenario.

The WDC submission considers these issues from the perspective of the Western Region, the needs of the Region, the opportunities its development presents for Ireland’s economy and society as a whole and the choices, investments and policy required to achieve regional growth and resilience.

This post highlights the key points made in the submission.  The complete, comprehensive submission on the National Planning Framework by the WDC can be read here (4.5MB PDF).  A shorter summary is available here (0.7MB PDF).

 

What should the NPF achieve?

  • The National Planning Framework (NPF) provides Ireland with an opportunity to more fully realise the potential of all of its regions to contribute to national growth and productivity. All areas of Ireland, the Capital and second tier cities, large, medium and small-sized towns, villages and open countryside, have roles to play both in the national economy and, most importantly, as locations for people to live.
  • While spatial planning strives for ideal settlement or employment patterns and transport infrastructure, in many aspects of life change is relatively slow; demographics may alter gradually over decades and generations and, given the housing boom in the early part of this century, many of our existing housing units will be in use in the very long term. If the NPF is to be effective it must focus on what is needed, given current and historical patterns and the necessity for a more balanced pattern of development.
  • To effectively support national growth it is important that there is not excessive urban concentration “Either over or under [urban] concentration … is very costly in terms of economic efficiency and national growth rates” (Vernon Henderson, 2000[1]). Thus it is essential that, through the NPF, other cities and other regions become the focus of investment and development.

Developing Cities

  • As the NPF is to be a high level Framework, in this submission the WDC does not go into detail by naming places or commenting on specific development projects, as these will be covered by the forthcoming Regional Spatial and Economic Strategies (RSES). The exception to this, however, is in relation to the need for cities to counterbalance Dublin.  In this case we emphasise the role of Galway and the potential for Sligo to be developed as the key growth centre for the North West.
  • The North West is a large rural region and Sligo is the best located large urban centre to support development throughout much of the North West region. With effective linkages to other urban centres throughout the region and improved connectivity, along with support from regional and national stakeholders, Sligo can become a more effective regional driver, supporting a greater share of population, economic and employment growth in Sligo itself and the wider North West region.

Developing Towns

  • While the NPF is to be a high level document and the focus is largely on cities it is important not to assume that development of key cities will constitute regional development. All areas need to be the focus of definite policy, and the NPF should make this clear.
  • While cities may drive regional development, other towns, at a smaller scale, can be equally important to their region. Recognising this is not the same as accepting that all towns need the same level of connection and services.  It is more important to understand that the context of each town differs, in terms of distance and connectivity to other towns and to the cities, the size of the hinterland it serves and its physical area as well as population.  Therefore their infrastructure and service needs differ.
  • Towns play a central role in Ireland’s settlement hierarchy. While much of the emphasis in the NPF Issues and Choices paper is on cities and their role, for a large proportion of Ireland’s population small and medium-sized towns act as their key service centre for education, retail, recreation, primary health and social activities.  Even within the hinterlands of the large cities, people access many of their daily services in smaller centres.  The NPF needs to be clear on the role it sees for towns in effective regional development.

Rural Areas

  • Rural areas provide key resources essential to our economy and society. They are the location of our natural resources and also most of our environmental, biodiversity and landscape assets.  They are places of residence and employment, as well as places of amenity, recreation and refuge.
  • They are already supporting national economic growth, climate action objectives and local communities, albeit at a smaller scale than towns and cities. But a greater focus on developing rural regions would increase the contribution to our economy and society made by rural areas.
  • The key solution to maintaining rural populations is the availability of employment. It is important that the NPF is truly focused on creating opportunities for the people who live in the regions, whether in cities, towns or rural areas.

Employment and Enterprise

  • In the Issues and Choices paper a narrow definition of ‘job’, ‘work’ and ‘employer’ as a full-time permanent employee travelling every day to a specific work location seems to be assumed. This does not recognise either the current reality of ‘work’ or the likely changes to 2040. Self-employment, the ‘gig’ or ‘sharing’ economy, contract work, freelancing, e-Working, multiple income streams, online business are all trends that are redefining the conceptions of work, enterprise and their physical location.
  • If the NPF mainly equates ‘employer’ with a large IT services or high-tech manufacturing company, many of which (though by no means all) are attracted to larger cities, then it will only address the needs of a small proportion of the State’s population and labour force.
  • Similarly the NPF must recognise the need to enable and support the diversification of the Irish economy and enterprise base. It must provide a support framework for indigenous business growth across all regions and particularly in sectors where regions have comparative advantage.

Location Decisions

  • While job opportunities are a critical factor in people’s decision of where to live, they are by no means the only factor. Many other personal and social factors influence this decision such as closeness to family (including for childcare and elder care reasons), affordability, social and lifestyle preferences, connection to place and community.
  • Many people have selected to live in one location but commute to work elsewhere or, in some cases, e-Work for a number of days a week. The NPF needs to recognise the complexity of reasons for people’s location decisions in planning for the development of settlements.

Infrastructure

  • New infrastructure can be transformative (the increase in motorway infrastructure in recent decades shows how some change happens relatively quickly). Therefore it is essential that we carefully consider where we place new investments.  To do so, capital appraisal and evaluation methods determining the costs and benefits of different investment projects need to be re-examined if we are to move from a ‘business as usual’ approach.
  • Investment in infrastructure can strongly influence the location of other infrastructure with a detrimental impact on unserved locations. The North West of the country is at a disadvantage compared to other regions with regard to motorway access. This situation will be compounded if investment in rail is focused on those routes with better road access (motorways) in order for rail to stay competitive, or if communications or electricity networks are developed along existing motorway or rail corridors.
  • The WDC believes that the regional cities can be developed more and have untapped potential, however better intra-regional linkages are needed. The weaker links between the regional centres – notably Cork to Limerick and north of Galway through to Sligo and on to Letterkenny, are likely to be a factor in the relatively slower growth of regional centres in contrast to the motorway network, most of which serves Dublin from the regions.

Climate Change

For the future, the need to move to a low carbon, fossil fuel free economy is essential and needs to be an integral and much more explicit part of the NPF.  The National Mitigation Plan for Climate Change is currently being developed, and it is essential that actions under the NPF will be in line with, and support, the actions in the Mitigation Plan.

How should the NPF be implemented?

  • While much of the role of the NPF is strategic vision and coordination of decision-making, in order for the Framework to be effective it is essential that the achievement of the vision and the actions essential to it are appropriately resourced. The Issues and Choices paper does not give a detailed outline of how the NPF implementation will be resourced, except through the anticipated alignment with the Capital Investment Programme.
  • It should be remembered that policy on services and regional development is not just implemented through capital spending but also though current spending and through policy decisions with spatial implications (such as those relating to the location of services). Therefore it is essential that other spending, investment and policy decisions are in line with the NPF rather than operating counter to it.
  • While the NPF is to provide a high level Framework for development in Ireland to 2040, it seems this Framework is to be implemented at a regional level through the RSES. The Framework and the Strategies are therefore interlinked yet the respective roles of the NPF and the RSES are not explicit and so it is not evident which areas of development will be influenced by the NPF and which by the RSES.
  • In order to ensure that the NPF is implemented effectively it is important that there is a single body with responsibility for its delivery and that there is a designated budget to help achieve its implementation.

 

It is expected that a draft National Planning Framework document will be published for consultation in May.  Following that a final version of the Framework will be prepared for discussion and consideration by Dáil Éireann.

 

As mentioned above the full WDC submission on the Issues and Choices paper Ireland 2040 Our Plan- A National Planning Framework is available here (PDF 4.5MB) and a summary of key point and responses to consultation questions is available here (PDF 0.7MB).

 

 

Helen McHenry

[1] http://www.nber.org/papers/w7503

New WDC Publication: WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence

The Western Development Commission (WDC) has published its latest Policy Briefing WDC Policy Briefing No.7 e-Working in the Western Region: A Review of the Evidence, which is now available for download at the following link here.

e-Work is a method of working using information and communication technology in which the work is not bound to any particular location. Traditionally this has been understood as working remotely from the office, usually from home, whether full-time or for a period during the working week. e-Working can provide particular opportunities in regions like the Western Region where many are living some distance from key employment centres.

The WDC Policy Briefing, which includes case studies from companies and individuals, examines:

  • The extent of e-Working.
  • The way in which weaker broadband access in more rural locations impacts on the rate of e-Working.
  • Factors driving e-Work.
  • Recommendations on how e-Working can be further promoted.

This Policy Briefing shows that e-Working is a widespread practice but somewhat hidden from official statistics. It also shows that while there is demand for greater e-working, broadband speeds need to be improved.

The WDC Policy Briefing contains recommendations to support more e-Working, including priority rollout of the National Broadband Plan to those counties with the lowest broadband speeds. Additional case studies are also available for download from here.

Deirdre Frost

Realising our Rural Potential- Action Plan for Rural Development

The Action Plan for Rural Development –Realising our Rural Potential –developed by the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs (DAHRRGA) was launched yesterday (23.01.17) in Ballymahon, Co. Longford as was mentioned in our last post.

action-plan-cover

The Action Plan contains 274 actions which are to be completed over the next three years and uses the Action Plan for Jobs as a model with responsibility for the delivery of each action is assigned to a government department  or other body.  Each action has a clear timeline.

action-plan-targets

There is an emphasis on the positive assets of rural Ireland and on ‘changing the narrative towards the contribution made to our economy and society by rural areas, rather than a focus on rural decline’.

It is recognised that rural Ireland is not a homogenous place and that different areas face different challenges.  There is no clear definition of rural Ireland but it seems to use that defined in the CEDRA (Commission for Economic Development of Rural Areas )  “all areas located beyond the administrative boundaries of the five largest cities”.

Building on Policy

The Action Plan builds on the CEDRA report and the Charter for Rural Ireland and contains a number of actions which build on these.  For example, a review of the implementation of the CEDRA report is one action, while the REDZ are also part of the Action Plan.

action-cedraRural Proofing, which was a commitment in the Rural Chart published last year, is included here too

action-rural-proofingThe Action Plan outlines the population and other changes which have been taking place in rural Ireland and briefly examines the challenges and opportunities faced by rural areas.  One of the key challenges noted is BREXIT and the Western Development Commission is committed to an action (along with DAHRRGA) to examine the impact of BREXIT on rural areas and on border areas in particular.

action-wdc-brexit

Action Plan Themes

As mentioned in our previous post there are five thematic pillars, each of which has a series of objectives and actions.   Each of the five are further broken down into more specific themes as follows:

Pillar 1: Supporting Sustainable Communities

  • Making Rural Ireland a better place to live (Actions 1-19)
  • Enhancing Local Services (Actions 20-36)
  • Empowering Local Communities (Actions 37-46)
  • Building Better Communities (Actions 47-67)

 

Pillar 2: Supporting Enterprise and Employment

  • Growing and Attracting Enterprise (Actions 68-104)
  • Supporting Sectoral Growth (this covers the Agri-food Sector, Renewable energy and International Financial Services -Actions 105-120)
  • Skills and Innovation (Actions 121-134)
  • Supporting Rural Job Seekers and Protecting Incomes (Actions 135-151)

 

Pillar 3: Maximising our Rural Tourism and Recreation Potential

  • Support targeted Rural Tourism Initiatives (Actions 152-166)
  • Develop and Promote Activity Tourism (Actions 167-185)
  • Develop and Support our Natural and Built Heritage (Actions 186-202)

 

Pillar 4: Fostering Culture and Creativity in Rural Communities

  • Increase access to the arts in rural communities (Actions 203-209)
  • Enhance Culture and Creativity in Rural Ireland (Actions 210-222)
  • Promote the Irish language as a key resource (Actions 223-231)

 

Pillar 5: Improving Rural Infrastructure and Connectivity

  • Broadband and Mobile Phone Access (Actions 232-247)
  • Rural Transport (Actions 248-263)
  • Flood Relief Measures (Actions 264-276)

 

Key Actions

While there are more than 270 actions the key actions for the Plan (as highlighted by DAHRRGA )are listed here:

  • Supporting the creation of 135,000 new jobs in rural Ireland by 2020 by assisting indigenous businesses, investing €50m for collaborative approaches to job creation in the regions, and increasing Foreign Direct Investment in regional areas by up to 40%.
  • Implementing a range of initiatives to rejuvenate over 600 rural and regional towns.
  • Introducing a new pilot scheme to encourage residential occupancy in town and village centres.
  • Assisting over 4,000 projects in rural communities to boost economic development, tackle social exclusion and provide services to people living in remote areas.
  • Increasing the number of visitors to rural Ireland by 12% in the next three years through targeted tourism initiatives, including increased promotion of Activity Tourism.
  • Accelerating the preparation for the rollout of high-speed broadband and ensuring that all homes and businesses in rural Ireland are connected to broadband as early as possible.
  • Increasing capital funding for flood risk schemes up to €80m per annum by 2019 and increasing to €100m per annum by 2021
  • Improving job opportunities for young people in rural areas by increasing the number of apprenticeships and traineeships available locally.
  • Developing an Atlantic Economic Corridor to drive jobs and investment along the Western seaboard and contribute to more balanced regional development.
  • Investing over €50 million in sports, recreation and cultural facilities throughout the country, including in rural areas.
  • Protecting vital services in rural Ireland by improving rural transport provision, enhancing rural GP services and protecting rural schools.
  • Introducing a range of measures to boost job creation in the Gaeltacht, including the creation of 1,500 new jobs in Údarás na Gaeltachta client companies by 2020 and the development of Innovation Hubs in the Donegal, Mayo, Galway and Kerry Gaeltacht regions to support entrepreneurship.
  • Combating rural isolation by improving connectivity and enhancing supports for older people, including significant investment in the Senior Alert scheme.
  • Building safer communities by providing a more visible, effective and responsive police service in rural areas through the recruitment of 3,200 new Garda members over the next four years to reach a strength of 15,000 members, and by introducing a new community CCTV Grant Aid Scheme.
  • Examining the scope for increased investment in regional roads in the context of the review of the Capital Investment Plan 2016-2021
  • Assessing and improving rural transport routes and developing new routes where necessary
  • Delivering 18 new primary care centres in rural Ireland by end of 2018
  • Investing €435m in 90 public nursing facilities and district and community hospitals in rural Ireland, up to 2021, creating up to 5,000 jobs during the construction phase
  • Improving societal cohesion and wellbeing in rural communities by supporting cultural and artistic provision and participation.

 

Co-ordination and monitoring

One of the important outcomes of the Action Plan should be a more integrated approach to rural issues across government departments and agencies.

The implementation of the Action Plan will be overseen by a Monitoring Committee which will include representatives of relevant government departments and key rural stakeholder interests.  The Committee will be supported by DAHRRGA.

Reports will be submitted every six months to a cabinet committee on Regional and Rural Affairs which is chaired by the Taoiseach and the progress reports on the delivery of the actions will be published.

The Minister for Arts, Heritage, Regional, Rural and Gaeltacht Affairs, Heather Humphries, TD  has appointed Pat Spillane as an Ambassador for the Action Plan for Rural Development who will assist the Monitoring Committee in identifying the impacts of the Plan on Rural Ireland and encourage businesses, communities, sporting organisations and others to engage with the Plan.  Mr Spillane previously acted as Chair of the Commission for Economic Development of Rural Areas (CEDRA).  He will also be a member of the Monitoring Committee which will oversee the implementation on the Action Plan.

While the majority of the actions are already part of government policy including them in the Action Plan means that their progress will be regularly monitored by Monitoring Committee which should ensure continued focus.

You can read the full Action Plan here.

There is a short video also available.

 

 

Helen McHenry

2017 – A very important year for Broadband and the National Broadband Plan

2017 – Contract Signing and Build Commencement

2017 is the year when contracts are to be awarded to one or two telecommunications companies to rollout a high speed broadband network as part of the much awaited National Broadband Plan.

For those companies and citizens across regional and rural Ireland trying to operate with very basic broadband services, this is a really important milestone. Not only will it signal the start of an actual physical build out of the network, it will also provide some reassurance that Government policy is actually starting to deliver.

It had been expected that contracts would be signed in June 2017, though late last year the bidders (there are three), indicated they may need more time to prepare their bids. See Dáil Q&A.

Notwithstanding the scale of the project and process, the bidders have had years to prepare for this bid and it is imperative that contracts are awarded and the build commences. Rural businesses have had to endure poor services for too long and in a global marketplace where online connectivity is a basic pre-requisite, rural businesses have to work harder than their urban counterparts to stay in business. Recent research highlights the significance of broadband infrastructure compared to other infrastructure in supporting local enterprises and their development.

Report of the Mobile Phone and Broadband Taskforce

In the meantime, just before Christmas 2016, the Report of the Mobile Phone and Broadband Taskforce was published. This report seeks to address the gaps in the current delivery of telecoms infrastructure and is focused more on addressing improvements in the short term, in addition and separate to the National Broadband Plan which is over a longer time frame.

This is a very welcome initiative, not least because there is a lot of dissatisfaction with mobile phone coverage, especially in rural areas. Also, anything that can ‘fill gaps’ in existing broadband provision should be progressed, as even when contracts for the NBP are signed, some will be waiting years for the planned new broadband infrastructure.

There are 40 actions aimed at assisting the rollout of mobile services and high speed broadband, to homes and businesses. These include measures to streamline planning procedures for telecoms infrastructure, actions to build out new ducting along the M7/M8, and measures to help consumers directly.

Key actions include:

  • The Department of Communications, Climate Action & Environment will work with telecoms operators and ComReg (Commission for Communication Regulation) to identify mobile blackspots and come up with measures to address these blackspots.
  • All local authorities are to assign a Broadband officer who will act as a single point of contact for engagement with telecommunications operators building out infrastructure.
  • ComReg will develop and publish a new network coverage map, and develop a testing regime to measure the performance of mobile phone handsets which will help people to make informed choices on products and services they purchase.
  • There will be a new licensing regime to allow people to install high quality signal repeaters on their buildings – homes and businesses, which will boost their connectivity.
  • Work on building 95km of duct along the M7 / M8 Motorway, which will complete the ducting on the Cork-Dublin route is being undertaken by Transport infrastructure Ireland.
  • From Q1, 2017, all Local Authorities will apply waivers in respect of development contributions for telecoms infrastructure developments.
  • Other key actions include the review and updating of the relevant statutory planning guidelines to ensure consistency by local authorities, and the introduction of an online system to streamline the planning application process.

Spectrum Developments

  • ComReg expects to allocate spectrum in the 3.6GHz band in 2017. This will release an additional 86% of spectrum capacity, allowing fixed wireless and mobile operators to deliver services.
  • It is expected that by 2020 the 700MHz spectrum band is to be made available for use by the telecoms sector which will be particularly important in rural areas.

Finally, there is to be an Implementation Group established which is to drive and monitor the implementation of these actions.

 

For rural users, in the Western Region and across the country, lets hope 2017 will see delivery of these actions, that NBP contracts are awarded and the building of the National Broadband Plan Network commences.

Deirdre Frost