Public Policy Priorities in 2016 and Beyond

A seminar entitled Ireland’s Policy Priorities after the next General Election, on November 2nd provided a welcome break from the recent talk of Budget giveaways and election promises. Organised by the Policy Institute, Trinity College Dublin, in association with the Public Policy Advisors Network, the aim was to discuss what are and what should be the policy priorities of the next Government.

Some interesting contributions included that from Dan O’Brien, in which he examined medium term policy challenges, noting the ageing demographics generally as well as a sharp decline, over the last five years, in the number of those aged in their twenties. This is attributed to the birth rate as well as emigration and the ageing of that cohort of East European migrants that came here before the crash.

Another key policy theme which is likely to become a policy priority is Ireland’s response to the EU’s 2030 energy and climate change targets. The recent recession, which gave rise to a reduction in emissions (purely because of a contraction in economic activity), relegated the urgency of this policy priority. The return to economic growth will ensure that this is likely to become a more important policy priority. It was proposed that the next Government should appoint a senior Minister with responsibility for the low carbon agenda.

Considering the economics of the next programme for Government, Stephen Kinsella and Ronan Lyons examined the patterns of national economic growth since 2002 – characterised initially from 2002-2007 by a rapidly growing economy, followed by the economic crisis of 2007-2011 which in turn was followed by a period of readjusting public spending and restoring economic confidence in 2011-2016.

It is suggested that the period from 2016 could be that of ‘coming full circle’, with a rapidly growing economy and a need to manage expectations. In learning from our past mistakes, fiscal policy is key and the authors advocate the use of the concept of the Social Return on Investment (SROI). This differs from the current cost based accounting approach to public spending to a more holistic economic approach where the wider costs and benefits of a proposal would be measured. In doing, so the full implications of a cut are captured e.g. €100 cut to caregivers allowance, which then drives people into the public health system thereby negating any ‘savings’. This is arguably a more useful way of evaluating public policy instruments, allowing a more holistic measure of the effects of policies.

Examining Local Government and Spatial Planning, Seán Ó’Riordáin and John Martin point to the need for a new  long-term spatial plan for Ireland (the National Planning Framework) and the need to learn lessons from the National Spatial Strategy. The role of local government in supporting long term development of both rural and urban areas needs to be addressed.

Bringing the concept of Social Return on Investment to the debate on spatial planning, regional, rural and urban development might help advance this debate and the policy choices which arise. In considering investment decisions to support development of the regions, both urban and rural, measuring the Social Return on Investment might lead to different outcomes when considering cuts to or additional investment in various services in regional and rural locations.

For example, decisions on the closure of public services offices in regional and rural locations such as post offices, government outreach offices, garda stations etc. are usually based on cutting operational expenditure, including staff costs or economies of scale.  These cuts can deliver immediate financial savings for the organisation but this narrow view does not take account of the accumulated long term impact on the local economy, the overall needs of society and the disabling impact on local communities.

Taking account of the social rate of return allows for a more holistic economic and societal perspective, rather than solely on the efficiencies and financial savings generated for the individual organisation.  In doing so, the wider impacts beyond a particular locality can be captured, for example, unemployment and migration from rural areas and other regional centres can add to already significant pressures on housing and transport services in the capital. This in turn requires additional investment in infrastructure and services, which is often more expensive to deliver in congested urban areas. Examining all costs and benefits and the social rate of return could help us to make better, more informed choices.

 

The presentations are available at the PPAN website http://www.ppan.ie/latest-news/

Deirdre Frost

Realising the Hidden Potential of Ireland’s Towns

One third of Irish people live in towns. However, over many years towns have not received the level of attention and support necessary to ensure a sustainable future in the face of change.

In Kilkenny last week [1] the Heritage Council hosted an excellent conference on the potential of Ireland’s rural towns and villages.

Speakers discussed how the historic urban characters of many of our main streets are losing vitality and value through under-use or over-development. But the conference had a broader focus than heritage, examining the role of Irish towns and their activities in retail and as places for people to live, work and visit.

One of the refreshing aspects of the conference was that it considered towns and villages of all sizes and noted the role they have all played and continue to play in our society and economy. See here for more details of the conference.

This event was the culmination of two years’ work on the nature and role of Irish towns and what needs to be done to keep them vital and alive. As part of this the Heritage Council put forward six policy proposals for Ireland’s towns which are summarised here:

  1. An Irish Urban Policy should be developed which sets out to protect the strategic social, cultural, economic and environmental role of Irish towns of all sizes.
  1. Extend the Living City initiative to the historic core area of all Irish towns and develop fiscal measures specifically to encourage people to live and do business in towns.
  1. Reintroduce incentives for ‘Living over the Shop’ and work to ensure that regulatory burden that can deter such developments is eased.
  1. Ensure that the strategic economic role of towns in rural economic development is reflected in future funding programmes.
  1. There should be further research on the characteristics and role of towns and the barriers to their development.
  1. A Rural Towns and Villages network should be established to provide support and funding for community initiatives to revitalise towns.

Some of the background to the Heritage Council work in the area is here and the full details of their policy proposals will be available shortly.

And Finally…

Anne Phelan, T.D. and Minister of State[2] spoke at the conference and welcomed the Heritage Council work in the area. She also gave some insight into the ongoing rural policy process.

A Rural Charter is currently being drawn up, outlining the role for rural Ireland in the future, a new rural White Paper will be prepared in 2016 and a Rural Forum is also to be developed.

This focus on rural needs and rural policy is very welcome and we look forward to it coming together to provide stimulus and direction for future rural development.

 

Helen McHenry

 

[1] 5th November 2015

[2] Minister of State at the Departments of Agriculture, Food and Marine and Transport, Tourism and Sport with Special Responsibility for Rural Economic Development (implementation of the CEDRA Report) and Rural Transport

Next Generation Broadband Deployment – Lessons from Australia

As the Department for Communications, Marine and Natural Resources in Ireland prepares the National Broadband Plan Intervention Strategy, it is useful to consider some lessons which can be learned from elsewhere. The experience of Australia is instructive, in part illustrating some of the pitfalls.

  1. Ambitious targets with ambitious deadlines

In 2009 the Australian Government announced an ambitious programme to deliver fibre to the premises (FTTP) to 93% of Australian premises (residential and commercial). This was a very ambitious target given the country’s very low population density (3% compared to Ireland’s 67%). The remaining 7% of the population, in the very remote parts of Australia, were to be served by satellite and wireless technologies.

The original deadline for completion was within six years (2015). By the end of 2013 just 3% of premises were connected.

Following an extensive review in late 2013, a change in direction and new targets were announced[1].

  • Instead of 93% FTTP, it is more likely to be 22% FTTP, the exact technology (and therefore the actual %) will be determined on area basis.
  • Fibre to the node (FTTN) to 71% approximately of premises, with the remaining 4% and 3% fixed wireless and satellite respectively.
  • Lower speeds (50Mbps rather than 100+ Mbps download) resulting from the higher rate of FTTN connection rather than FTTP.
  1. Increasing costs – to the exchequer

The original plan in 2009, was forecast to cost AUD $44 billion (Australian dollars). In 2013, the estimated cost increased to AUD $73 billion – 65% greater than the original forecast.

  1. Higher costs – to the consumer

There is concern that the retail costs will be much higher than the cost of services currently available, estimated at an extra AUD $43 per month[2]. This will influence the take-up of next generation services. Broadband is now accepted as a basic utility and access to it is considered necessary for participation in society and the economy. However as the recent water protests in Ireland demonstrate, basic utilities should not be expensive. The concept of ‘Willingness to Pay’ is a key element of the pricing structure.

From an Irish perspective, it will be interesting to see from the trials of next generation broadband (in Cavan and Mayo for example), to what extent consumers will revert to a basic service at a cheaper price rather than paying extra for a premium product. It is also likely that the consumers in the pilot areas will be more receptive to paying for a premium service which they currently access, compared to those yet to experience the benefits of the premium next generation service.

  1. What are consumers looking for?

There is a declining value to additional broadband speeds. Part of the Australian review included an assessment of the growth in demand for faster broadband speeds. A key finding is that while the Willingness to Pay for speed may grow rapidly at low speeds (less than  40 Mbps download), for most people the Willingness to Pay is not expected to grow at all for high speeds (greater than 50 Mbps)[3].

A related finding is that consumers would prefer an increase to their current speeds quickly, rather than to wait longer to gain a higher level of speed. The Australian Government are now looking at prioritising delivery to those areas which are poorly served and this is consistent with the findings of the Independent Review. http://www.nbnco.com.au/content/dam/nbnco2/documents/soe-shareholder-minister-letter.pdf.

In an Irish context an increase in speed for example from 5Mbps to 10 Mbps is worth more to consumers than an increase from 20Mbps to 25Mbps. The Australian experience also suggests it would be preferable to rollout delivery to those areas with poor and inadequate broadband first.

  1. Don’t play politics with important infrastructure

In Australia, the different ruling parties have taken different policy positions on the rollout of next generation broadband. A change of Government can (and has in Australia) led to a change in policy on delivery and this can create huge uncertainly for investors as well as consumers. Given the scale of investment, the deployment of next generation broadband will generally take many years and beyond the lifetime of one Government. It is therefore important that Government policy is well considered and implemented consistently and not compromised by the electoral cycle.

Deirdre Frost

[1] https://www.communications.gov.au/sites/g/files/net301/f/Cost-Benefit_Analysis_-_FINAL_-_For_Publication.pdf, http://spectrum.ieee.org/telecom/internet/the-rise-and-fall-of-australias-44-billion-broadband-project/

[2] https://www.communications.gov.au/sites/g/files/net301/f/Final_Ministerial_Statement.pdf

[3]  p. 16 https://www.communications.gov.au/sites/g/files/net301/f/Cost-Benefit_Analysis_-_FINAL_-_For_Publication.pdf

How’s life in our region?

How is life in the Border, Midland and West Region? How does it compare with that in other similar regions in Europe and elsewhere? A new tool can help answer these questions.

The OECD has been working on a tool for measuring regional well-being using indicators that take account of more than economics and material conditions and include indicators of quality of life. The OECD Regional Well-being web tool shows the factors contributing to well-being in different regions and allows us to compare our region – the Border, Midland and West [1]  with 361 other OECD regions based on nine topics central to the quality of our lives.

Other tools measuring quality of life (such as the CSO Regional Quality of life in Ireland and the Gateways Development Index) , are already available and are useful for comparing the situation within Ireland, but the OECD index is particularly useful for transnational comparisons.

What’s measured?

The tool uses nine different measures dimensions of well-being (Income, Jobs, Housing, Education, Health, Environment, Safety, Civic Engagement, and Accessibility of Services). This provides a new way to compare a range of factors across OECD regions[2]. The dimensions chosen are all important to quality of life in the OECD regions but because of the need to use comparable data some of the indicators are very limited. This can be seen in Figure 1 below.

The tool and set of indicators provide a common reference for regions to develop their own metrics of well-being and to consider the most appropriate areas of comparison for their own areas. While the indicators used are limited they can help to benchmark the relative position of a place and see how life in the region compares to that elsewhere, where a region has advantages and what aspects of material well-being and quality of life should be targeted for improvement. It also allows for comparison over time.

Figure 1: Topic Indicator Overview

OECD tool indicators

Source: www.oecd.org/regional/regional-policy/website-topics-indicators-overview.pdf

The regional well-being tool provides both a score for each topic and the percentile position of each region on that topic. Often what appears to be a high score may not translate into a high percentile rating because of the wide variation among regions. Similarly, as for Income (discussed below) a low score can still be associated with a good percentile rating.

The limitations of the indicators are, however, clear. For example, Housing is a broad concept but the indicator used is only based on the number of rooms available to occupants, while Access to Services is only measured by access to broadband, and safety relates only to violent death. Nonetheless, it is useful to see how we are doing and how we compare with other similar regions, and it is to be hoped that in the future more information will be added providing a broader base for comparison.

 

How is life in our region?

The tool does not provide an overall score for each region but it illustrates the different strengths and weaknesses of each region (See Figure 2)[3].

Material conditions

  • The BMW region scores highly (7.1) on Housing (which is measured by number of rooms per person) which puts it in the top 26% of OECD regions. Rural regions are more likely to score highly in this indicator, given the lower cost of space compared to city and suburban areas.
  • In contrast the region scores poorly on Jobs (3.0) and is in the bottom 12% of OECD regions for this indicator. The Jobs indicator is based on the employment rates (58.2%) in 2013 and the unemployment rate (15.5%) in 2013.
  • The Income score for the BMW region is also relatively low (4.3) but the region is in the top 51% of OECD regions with an income of $16,219[4] in 2011. This is because of considerable variation in Income levels among OECD regions[5] and so even though the BMW is in the top half of regions for income, the score is relatively low because of the significantly higher incomes in some regions.

Figure 2: Border, Midland and West Region Well Being Index

bmw hows life crop2

Source: http://www.oecdregionalwellbeing.org/region.html#IE01

 

Quality of life:

  • The BMW performs very well on Environment (based on an air pollution indicator) with a score of 9.0 and puts the region in the top 12% of OECD regions.
  • One of the region’s highest scores is for Safety (8.7) where the BMW is in the top 49% of regions. Safety is based on the homicide rate per 100,000 people (1.4 for the region).
  • The BMW scores 7.4 for both Education and Health, and this score puts the region in the top 39% for Health (based on mortality (8.0 deaths per 1,000) and life expectancy (81.1 years)) and the bottom 44% for Education (based on the share of the labour force with at least secondary education (77.2%)).
  • The region is in the top 43% of OECD regions for Civic Engagement (based on voter turnout, 70.6%) with a score of 6.1.
  • Finally, for access to services, which is based only on households with Broadband access (58.7%) the region is in the bottom 27% of OECD regions.

How do we compare?

The main benefit of the tool is ease of comparison with other OECD regions. The tool itself provides an automatic comparison with regions suggested as having similar well-being. The regions suggested by the tool as scoring similar to the BMW are: North East England; Cantabria in Spain; Lisbon in Portugal; the North Island of New Zealand. These can be seen on the BMW page of the tool linked to above.

However it is more useful to compare our region well-being with that in other similar regions rather than based on well-being scores, so four European regions and four OECD regions are included for comparison here. The regions were selected as having similarities with our own BMW region, being maritime and agricultural regions, relatively remote from the main cities or centres of power, and located in temperate climates.

These characteristics mean the regions are often similar in terms of their high scores for Environment, Safety and Housing, given that they are rural regions with less pollution, less violent crime and larger houses. These similarities are interesting, but the differences in other factors (for example jobs and incomes, or access to services (broadband) or health vary significantly and are the result, at least in part, of policy decisions in and for that region. It would be useful, in future, to try to understand the policy decisions and regional characteristics which give rise to the differences in the scores and see what we can learn from them.

It is important to remember that the types and size of the regions selected can influence the areas they score highly, as can rurality or the inclusion of major urban centres.

Comparison with European Regions

Four European regions (NUTS 2) are shown below for comparison (North Jutland, Denmark; Brittany, France; Galicia, Spain; Northern Ireland, UK. See Figure 3). All score well on safety, and on environment, with more variability on the other topic areas. Access to services, which means access to broadband, is interesting given the rural nature of these regions. Both North Jutland and Northern Ireland score 10.0 with 86.7% access in North Jutland and 87% access in Northern Ireland. In contrast, only 59.3% had access to broadband in Galicia. This compares with 58.7% in the BMW.

Brittany and Northern Ireland score relatively well on both jobs and income, and Northern Jutland performs well on jobs but is weaker on income. The BMW was weaker on jobs than either Brittany or Northern Ireland but performed better than Northern Jutland and Galicia on income

Figure 3: Comparison of scores in four selected European regions

North Jutland hows life crop Brittany hows life crop
North Jutland, Denmark Brittany, France
galacia hows life crop NI hows life crop
Galicia, Spain Northern Ireland, UK
Source: http://www.oecdregionalwellbeing.org/

Comparison with selected OECD Regions

Looking further afield, four other OECD regions (New Brunswick, Canada; Tasmania, Australia; Hokkaido, Japan; South Island, New Zealand) with similar characteristics to the BMW are shown below (Figure 4). Again there are high scores for Safety and Environment (except for Hokkaido) and broadband is more variable here, though none of these regions are as good as the better European ones. Hokkaido has the same level of broadband (58.5% of households with access) as the BMW scoring 5.8. All of these regions perform better than the BMW on jobs, with Tasmania doing best, while South Island and Hokkaido both had high job scores with Hokkaido in the top 16 % of OECD regions and South Island in the top 7%. The regions performed similarly or better than the BMW on incomes (Hokkaido and South Island are slightly lower than the BMW). All regions except Hokkaido also achieve high housing scores.

Figure 4: Comparison of scores in four selected OECD regions

 new brunswick hows life crop  tasmania hows life crop
New Brunswick, Canada Tasmania, Australia
 Hokkaido hows life crop  south island hows life crop
Hokkaido, Japan South Island, New Zealand
Source: http://www.oecdregionalwellbeing.org/

 

While there is variation in the scores of all of these regions, and they all have characteristics which will make them perform differently, it would be useful to consider how regions with similar characteristics vary and whether there are policies or actions that have improved their scores, and whether there are policy learnings from such regions, or different uses of natural resources that could be adopted in the BMW.

 

 

Helen McHenry

 

[1] Border, Midland and West is a NUTS 2 region and while larger than the seven county Western Region covered by the WDC it is the relevant region at this level as it contains all but one of the WDC’s counties.

[2] The most recent available data is used and this varies by year for different categories. The Tool is updated as new data becomes available. See www.oecdregionalwellbeing.org and click Download the data for full details.

[3] The same information is also available for the Southern and Eastern region (http://www.oecdregionalwellbeing.org/region.html#IE02 ), but because of the simplicity of the data used the tool is best employed making international comparisons.

[4] Disposable household income per head, US$, current prices, current PPP

[5] It varies from $51,677 (Australian Capital Territory) to $6,478 (Tarapaça, Chile)