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

Recent Trends in Regional GDP

With the Irish economy again experiencing a period of significant expansion (it is estimated to have grown by 6.7% in 2018) it is important to consider how different Irish are regions doing in this time of growth.  While this was examined for the three Assembly regions (Eastern and Midland, Southern and Northern and Western) in a previous post using Eurostat data, we now have the opportunity to consider economic growth and prosperity, as measured by GDP, for the smaller regions.

Regional GDP data (NUTS3 regions) for 2016, with preliminary figures for 2017 was published in April, so in this post we consider the most recent information, as well as looking back to 2008, and observing the regional patterns of recession and growth in the last decade.  While income data is available at county level (discussed for the Western Region in a previous post) the GDP and GVA data[i] is only available at regional level.  The Western Region, under the WDC’s remit includes the entire West region and three of the five counties in the newly delineated Border region (Louth is now included with the Mid East as discussed here).  Clare is part of the Mid West and unfortunately data for the Mid West has been suppressed in the CSO publication for reasons of confidentiality.  In charts for this post the Mid West and South West (also suppressed) have been combined for the years 2015-2017.

When comparing regions of very different sizes GDP per person is the most useful measure (total GDP and regions share of the national economy will be discussed in the next post on this topic). Figure 1 illustrates the very significant differences in GDP among regions.  In both 2016 and 2017 the lowest per capita GDP was in the Border region (€21,446 in 2016) followed by the Midland[ii] (€23,417 in 2016) and the West (€29,798 in 2016).

 

Figure 1: Regional GDP per person 2016 and 2017 (estimated)

a Data for 2015, 2016 and 2017 suppressed in MW and SW for reasons of confidentiality, b Preliminary

Source: CSO, 2019, County Incomes and Regional GDP, Table 9a, Mid West and South West own calculations based on Table 9 and Table 13, 13a

 

In contrast, the Mid West & South West  had the highest per capita GDP (this is a combined region as data for the two regions was suppressed) at €80,758 in 2016 which is almost four times greater than that in the Border region.  There are some unusual factors underlying this growth which are discussed in detail here.  Dublin, when considered alone had the highest GDP per person at (€81,184) in 2016 (though not in 2017) but it is shown here with the Mid East as much of the Dublin GDP is produced by workers living the Mid East (discussed here) and so considering the two region’s GDP together, when examining the per capita data gives a more realistic picture.  The very high levels of GDP per person in these regions (with large populations and significant economic output) bring GDP person in the State was €57,650 in 2016.

While 2017 figures are preliminary it is nonetheless interesting to look more closely at the growth rates most recent two years for which data is available.  According to this measure (GDP at current market prices) the economy of the state grew by 4.1% between 2015 and 2016, and 7.6% between 2016 and 2017.  Interestingly, the South East showed the highest annual growth (17.7%) between 2015 and 2016 with the Mid East next highest (12.8%) followed by Dublin at 9.7%.  The economy of the Border region grew by 6% but regional GDP decreased in the West by 6.1% between 2015 and 2016 and by 3.7% in the Midland region.  Surprisingly, as the South West was one of the regions with the most significant growth in 2015 the Mid West & South West economy contracted in that year by 3.6%.  The economy in all regions  grew in 2017 (except the Midland which contracted by 0.7% in the year and by 4.3% in total since 2015) with the biggest growth in Dublin (12.6%).  The West also showed a year on year recovery (5.3%) but still is estimated to have a smaller economy in 2017 than 2015 (by 1.1%).

 

Figure 2: Percentage change in Regional GDP between 2015 and 2017

b preliminary figure; MW & SW, own calculations

Source: CSO, 2019, Table 9   GVA per Region at Current Market Prices (GDP), 2008 to 2017

 

Looking back over a longer period, the very significant differences in patterns of growth are evident (Figure 3).  Dublin, which was always the largest economy, has grown more rapidly than other regions since 2012, while the Mid West & South West combined show the impact of the very significant level shift in GDP which occurred in 2015 (and is discussed in more detail in this post Leprechauns in Invisible Regions: Regional GVA (GDP) in 2015)

Figure 3: GDP per person in NUTS 3 regions 2008-2017

a Data for 2015, 2016 and 2017 suppressed for reasons of confidentiality, b Preliminary

Source: CSO, 2019, County Incomes and Regional GDP, Table 9a, Mid West and South West own calculations based on Table 9 and Tables 12,13, 13a

 

Other Regions had more modest growth, but both the South East and the Mid East have recovered well since the recession.  This is shown more clearly in Figure 4.  The economy of the Border region is estimated to be 0.8% smaller in 2017 than 2018 and the Midland region is 0.4% smaller. The economy of the West region grew modestly (10.6%) during the ten year period.  These regions clearly have not benefited from the recovery and growth in economic activity experienced in other regions.  The economies of the Mid West and South West combined have more than doubled in size (118% growth) between 2008 and 2017, while the Dublin economy grew by more than 50%.

Figure 4: Growth and decline in regional economies GDP since 2008.

Source: CSO, 2019, CSO, 2019, County Incomes and Regional GDP, Table 9 GVA per region at current market prices (GDP) 2008-2017, own calculations

 

Given the very different growth rates in the regional economies, there has been significant divergence among regions since 2008 and in particular since 2012.  The divergence is shown clearly over time when looking at how each of the region compares to the State average.  This is done using an Index with the State in each year equal to 100 (Figure 5).  In 2008 only two regions (Dublin and the South West) were above the state average, and the difference between the highest (Dublin) and the lowest (Border) was 85 points.  By 2017 Dublin and the combined region (Mid West and South West) were above the state average, and the other regions remained below, with the difference between the highest (again Dublin) and the lowest, (the Border) now 111 points.  By 2017 the Border, (36.1%) and the Midland region (37.5%), were significantly lower than the state average, while GDP per person in the Dublin region is 47% more than the state average.  The West, which has the strong economic driver of Galway, had a GDP per person of 72.5% of the state average in 2008 and 50.6% by 2017.

Figure 5: Index of GVA per person (Basic Prices) for each region 2008-2017, State=100

Source: CSO, 2019, County Incomes and Regional GDP, Table 10, MW & SW own calculations.

 

Along with this divergence in economic activity among regions within the State, it is interesting to look at the pattern in relation to the EU28.  Figure 6 shows GVA in the State relative to the EU28 increased from 129% of the EU28 average in 2008 to 178% in 2017.  The Dublin region grew even more strongly (from 188.7 in 2008 to 262.3 in 2017).  The West, which was 95.7% of the EU28 average in 2008, peaked in 2012 at 107% of the EU28 average, but has since fallen back to 90%.

Figure 6: Index of GVA per person (Basic Prices) for each region and state 2008-2017, EU28=100

Source: CSO, 2019, County Incomes and Regional GDP, Table 11, MW & SW own calculations.

 

Similarly the Border region which was 79% of the EU average in 2008 had decreased to 64.3% in 2017.  Clearly these regions are not just falling behind in relation to the state average, they are also diverging from the EU average, which is a cause for concern.  As discussed in this post A Tale of Three Regions: GDP in the new NUTS2 Regions it also has implications for the status of the regions in relation to cohesion funding and the Border Midland and West NUTS2 region will revert to Transition Region status from 2021.

Conclusion

GDP is the key measure of a how region’s economy is doing and is one of the important indicators of regional wellbeing[iii].  But the data shows that divergence in regional GDP is increasing, with some regions are experiencing very rapid economic growth while others, especially those in the Western Region (the Border region and the West) along with the Midland region are experiencing more modest growth and even contraction.

Given the significant growth of the national economy this is an important time to address issues in lagging regions such as the infrastructure deficits and other structural economic issues and to incentivise regional employment growth and make it easier for new businesses to establish and existing enterprise to survive.

Regions are the drivers of modern economic systems and all regions have the potential to thrive and to contribute to the national economy. However, because success breeds success some regions do this more effectively than others. Less advantaged regions will benefit if policy is focused on ensuring that they too can reach their potential. With the economic upturn, regional policy must be prioritised, it is a waste of talent and opportunity not to realise all regions’ potential.  It is to be hoped that the Ireland 2040 project can achieve this.

 

Helen McHenry

 

[i] GDP is Gross Domestic Product, GDP and GVA are the same concept i.e. they measure the value of the goods and services (or part thereof) which are produced within a region or country. GDP is valued at market prices and hence includes taxes charged and excludes the value of subsidies provided. GVA at basic prices on the other hand excludes product taxes and includes product subsidies. See background notes 

[ii] Although the Midland Region has consistently one of the lowest GVA per person, and Dublin and the Mid East the highest, the fact that GVA is measured where it is produced and the population is counted where people reside, means that those commuting from the Midland region of Dublin and the Mid East are contributing to the GVA of that region (which is why for GDP per person Dublin and the Mid East are often shown as combined for per capita data), while they form part of the denominator in the Midland region, so increasing the GVA of one and reducing that in the other.

[iii] Discussions of GDP inevitably must also consider on the limitations of the statistic as a measure of economic development (see here ) but it is the key statistic used, despite shortcomings.  As Eurostat notes here GDP per capita does not provide an indication as to the distribution of wealth between different population groups in the same region, nor does it measure the income ultimately available to private households in a region

200th WDC Insights blog post – Our Top 5!

It is hard to believe but this is our 200th post since the Policy Analysis team’s WDC Insights blog was first launched on 25th July 2014. Over the last (almost) five years and 200 posts we have addressed everything from labour market to climate change, broadband to county incomes, demography to electricity and much more in between.

We’ve tackled mysterious questions (Understanding rural transport statistics: Why are there so many new cars in county Roscommon?[1]) and pressing issues (Energy and Climate Action- the WDC View of the Draft National Plan); assessed the regional impacts of national trends (Leprechauns in Invisible Regions: Regional GVA (GDP) in 2015) and policies (WDC submission to Ireland 2040-Our Plan, the Draft National Planning Framework); analysed Census data (Census 2016: Housing In Ireland – What has been happening in the Western Region?) and explained changing statistical classifications (Nuts about NUTS!). And of course there’s our annual Christmas Quiz!

So of our 200 posts so far, what have been the most popular…?

Number 5: How are we doing?  GDP of Irish Regions in 2014

From April 2017, How are we doing?  GDP of Irish Regions in 2014 by Dr Helen McHenry is among our annual posts analysing CSO data on county incomes and regional GDP.  The analysis in this post showed the increasing dominance of Dublin and the South West in terms of their combined share of national GDP, with the share accounted for by other regions reducing over time, a trend that has continued.

Number 4: Preliminary Results of Census 2016 for Co Roscommon

Presenting our analysis to stakeholders is a key part of the work of the WDC’s Policy Analysis team and Preliminary Results of Census 2016 for Co Roscommon, from December 2016, summarised the main points from a presentation by Pauline White to the Roscommon Local Community Development Committee (LCDC). It outlined the key preliminary Census results for the county on population and the components of change.  Of course, these results have since been superseded by the final Census results, but it seems fitting this is in our Top 5 given that Roscommon is the WDC’s ‘home’.

Number 3: What is Rural?

It might seem like a simple question, but the popularity of this post by Dr Helen McHenry from October 2017 shows that defining What is Rural? is far more complex that you might think. The post explores differing definitions of ‘rural’ used by the CSO, the National Planning Framework and the Commission for the Economic Development of Rural Areas. It concludes by asking if we need ‘rural policy’ or policy for people living in rural areas?

Number 2: Census 2016: Rurality, Population Density and the Urban Population of the Western Region

Examining the population living in rural areas (using the CSO definition!), population density across western counties and the population of towns in the region, Census 2016: Rurality, Population Density and the Urban Population of the Western Region from May 2017 provides a handy overview of the distribution of the region’s population.  It highlights that the region’s highly rural nature, with a dispersed population and a large number of small and medium-sized towns, has important implications for the delivery of services and infrastructure to residents of the Western Region.

And finally …

Number 1: Balanced regional development – What does it mean?

In our most popular post (by a long way!) Balanced regional development – What does it mean? Deirdre Frost explored the differing definitions and uses of this much used (and abused?) term.  Written in May 2015, when the initial discussions were underway for the National Planning Framework, as a successor to the National Spatial Strategy, it concluded … ‘When considering a new national planning framework which aims to deliver balanced regional development, deciding and agreeing what we actually mean by balanced regional development and how we measure it would be a useful starting point which might ultimately ensure a greater chance of success.’   Whether the final NPF actually achieved this clarity is perhaps a topic for a future post …

So, 200 posts done and we are looking forward to the next 200.  We hope you have found (at least some of) them useful and of interest.  If you have, forward them to your friends!  And if there are any issues you think we should cover in future posts, just let us know policyanalysis[at]wdc.ie

All the best

Pauline, Deirdre & Helen

[1] The answer’s here

Smaller Labour Catchments across the Western Region

Travel to Work Areas and Labour Catchments

Analysis of travel to work data can be used to identify the geographic catchment from which a town draws its workforce, otherwise known as its labour catchment. Measurement of labour markets based on Travel to Work Areas (TTWAs) has been well established in the UK for many years, helping to inform various public policies ranging from employment to transport provision. Companies and large employers use TTWAs to help identify optimal locations to access labour supply.

The use of TTWAs is less well established in Ireland, and where used has largely been focussed on the larger cities especially Dublin. There has generally been little focus on labour catchments in other centres or more rural regions.

The Western Development Commission (WDC) has worked with the All Island Research Observatory (AIRO) to examine the labour catchments of towns across the Western Region based on Census of Population data 2006 and 2016. The town labour catchments show that area from which a town draws most of its labour supply; each catchment is based on the inclusions of Electoral Divisions (EDs) that are assigned to a town, based on commuting to work flows.

Last year the WDC published the findings on the labour catchments of the principal towns of the seven counties of the Western Region (Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon). The full report Travel to Work and Labour Catchments in the Western Region, A Profile of Seven Town Labour Catchments is available for download here (14.2MB). Each of the individual town reports are also available to download separately (Galway City, Sligo Town, Ennis,  Letterkenny, Castlebar, Carrick-on-Shannon, Roscommon).

The WDC is now publishing the findings of the other smaller catchments across the Western Region. This is the first time such detailed labour market analyses have been undertaken for the smaller centres across the Western Region. These data and findings can inform local and regional economic development and help support appropriate policies to ensure optimal local and regional development.

Smaller Catchments

The WDC identifies 26 labour catchments, which complement the 7 labour catchments of the principal towns in each of the counties which were published in 2018, see above.

In these 26 publications, the WDC draws on Census 2016 POWCAR (Place of Work Census of Anonymised Records) data to examine the travel to work patterns in centres with a population greater than 1,000 across the Western Region.

These 26 smaller catchments provide insights into the travel to work patterns of workers living there which are then used to generate labour catchments which show the geographic area from which each town draws most of its workers. Each town’s labour catchment has many more workers living there than the Census measure of the town’s resident workforce and it is a better measure of labour supply. This is particularly useful when considering employment and investment decisions.

Socio-economic profiles

Each of the reports identify the place of work of the resident workforce and provides detailed analysis of the socio-economic profile of workers providing information on age, gender, education levels, and sector of employment. There are comparisons with the rest of the Western Region and the State Average. There is also trend analyses indicating the extent of change between 2006 and 2016.

For ease of presentation the 26 smaller catchment reports are presented by County. Below are links to each of the 26 reports. In practice labour catchments extend across county boundaries, indeed that is one of the rationales for considering labour catchments rather than administrative boundaries; people travel to work regardless of county boundaries and these patterns and catchments provide a better evidence base for informing policy.

Some key points include:

  • Labour Supply: All the town labour catchments have significantly more people at work than the Census population at work for that town and have therefore access to a larger labour supply than normal Census definitions would indicate.
  • Profile of ‘Rural’ employment: The profile of employment in these smaller centres provide important insights into ‘rural’ employment, which is much are complex and varied than the perception of rural as largely agricultural employment.
  • Trends: Changes over time, in both place of work and the socio-economic characteristics of workers indicate little change in the geography of labour catchments but much change in the profile of resident workers, most notably in their age and education levels.

County Clare

The two labour catchments within Co. Clare have both recorded an increase in workers resident in the catchments. The Shannon labour catchment is concentrated around the Shannon Free Zone and Shannon Airport and is geographically compact. The Kilrush labour catchment is more extensive and now incorporates a previously separate Kilkee labour catchment. In both there is evidence of longer distances travelled to work than previously.

County Donegal

There are 8 smaller catchments located within Co. Donegal, reflecting the large size of the county, its geography with an extensive border both with Northern Ireland and the sea, and the relatively small size of some of the catchments.

Of the 8 labour catchments, 5 recorded a decline in the number of resident workers in the decade between 2006 and 2016. The three that recorded an increase in resident workers are Donegal, Dungloe and Carndonagh,  illustrating that some more remote areas are experiencing growth.

Each report identifies the top 10 work destinations for residents living in each labour catchment and the extent of cross border commuting is presented.

County Galway

There are 4 smaller catchments located within Co. Galway and just one, Gort labour catchment, recorded a decrease in the number of workers living there over the decade 2006-2016. Clifden, Tuam and Loughrea labour catchments recorded increases of varying degrees. The data presented also shows the extent of commuting between catchments, for example from Tuam, Loughrea and Gort labour catchments to Galway city.

County Leitrim

Apart from the county town labour catchment of Carrick-on-Shannon, there is just one smaller catchment located within Co. Leitrim, namely Manorhamilton. The number of resident workers in the Manorhamilton labour catchment increased over the ten year period and there is data to show more people are now working in Manorhamilton . The influence of some key employers is evident. Data on dross border commuting is also presented.

County Mayo

There are 8 smaller catchments located within Co. Mayo. Just two of the eight recorded a decline in the numbers of resident workers between the period of 2006 and 2016, these were Belmullet and the Charlestown/Knock Airport catchment. The other 6 recorded increases of varying degrees from 31% increase in the Westport labour catchment to an increase of 2.4% for the Ballina labour catchment. The most important places of work across each catchment are presented along with the labour market profiles of workers living there.

County Roscommon

There are 3 smaller catchments located within Co. Roscommon. All 3 recorded a decline in the numbers of workers resident there. In the case of Boyle and Ballaghaderreen, the geographic size of the labour catchments also decreased slightly. The data presented show the sectors in which people worked, the extent to which people worked inside the town and those who worked outside the town but within the wider catchment and the changes over the 10 years. Across all catchments there is a very significant increase in the level of third level education among the workforce.

 

Deirdre Frost

Changing times! Looking back twenty years in the Western Region

The Western Development Commission (WDC) recently published its strategy for the next five years 2019-2024 ‘Work Smarter Live Better’.  It was launched in Ballinasloe on 15th April, and that launch provided us with an opportunity to look back at how the seven county Western Region has changed since the WDC was set up.

The WDC was established by the Western Development Commission Act in 1998 so it is interesting to consider the changes experienced by the Region since the WDC came into being.  As the seven counties (Donegal, Sligo, Leitrim, Mayo, Roscommon, Galway and Clare) which make up the Western Region (the area under the remit of the WDC) do not align with other statistical regions for data collection, the best Western Region data comes from sources which publish data by county, such as the Census of Population, which allow us to combine county data to get statistics for the Western Region.  Comparing the Censuses of 1996 and 2016 gives a good picture of change in the Region over two decades.  It is not often we look back so far but it is a useful exercise, highlighting how much has changed in twenty years.

In this post I briefly consider changes in population and demographics, labour force, employment, and finally, income.  There are many other areas which merit examination which will be covered in a future post.

 

The Western Region population.

Looking first at population change, in 1996 the population of the Western Region was 657,231.  By 2016 after a very significant 26.1% increase, it was 828,697.   Different counties grew at very different rates, showing (Figure 1) the uneven rates of development and change.

The largest population growth in the period was in Galway, which grew by more than a third (36%) and the smallest population growth was in Mayo (17%) and Sligo (17.4%).

Figure 1: Population Change in Western Region counties 1996-2016

Source: CSO Statbank E2001: Population at Each Census 1841 to 2016 by County, Sex and Census Year

 

Demographic change

The make up of the population has also changed over that period.  In 1996 13.7% of the Western Region population was over 65 and 3.3% was over 80.  By 2016, 15.4% were over 65 and over 65 and 3.7% over 80.

More significant changes occurred in the younger age categories, in 1996 24% were under 15 while 41% were under 25 and by 2016 this had changed to 21.1% under 15 and 33% under 25.

 

Employment and the Labour Force

The labour force has grown even more significantly than the population.  There were 266,102 in the labour force in the region in 1996 and this had grown to 387,770 by 2016, a 46% increase.  The percentage of the population (aged 15-65) in the labour force was 53.5% in 1996 and had increased to 59.3% by 2016.  This increase is largely the result of higher female participation and also reflects the changing age demographic.

Skills have also changed considerably.  In 1996 in the Western Region only 16.7% had a third level qualification but by 2016 39.2% did.

My colleague Pauline White is currently undertaking a detailed analysis of employment by sector in the region and has published on six sectors.  Looking at key Western Region sectors, the significant changes in employment are noted  here.

In 1996 15.6% were employed in Agriculture, Forestry and Fishing and by 2016 only 6.8% were.  Similarly, in 1996 19% of those in employment worked in Industry, and in 2016 13.7% did.  In contrast, in 1996 40.1% were employed in Services but by 2016 67% were.

Incomes

Finally, although the data discussed so far is from the Census of Population it is useful to consider how income has changed over the same period.  In 1996 Household Disposable Income per person was €15,032 in the Western Region (2016 prices) and by 2016 it had risen to €22,689 an increase of 51% over that period.  However, in 1996 Western Region disposable income per person was 89.2% of the State average, but by 2016 it had fallen to 83.5% of the state average.  Clearly the improvements in income have been greater in other parts of Ireland.

 

Conclusion

This short post has provided a useful reminder of how things have changed in the Western Region in the period since the WDC was set up.  A future post will focus on spatial changes in infrastructure and where people live.  Looking back, the changes that have taken place over the 20 year period examined have seemed dramatic, though many of them have taken place gradually.  It is interesting to contemplate how things will change between 2016 and 2036 but, unless the retirement age increases even more, I won’t be around to blog about them.  And perhaps blogging won’t be around either.

 

Helen McHenry

Travel to Work Areas and Border Labour Catchments

The WDC will present analysis on Travel to Work Areas (TTWAS) and the smaller labour catchments located along the Border at a conference in Derry, organised by NERI on 1st May see here for more details.

This work is part of a larger piece of work examining the smaller labour catchments across the Western Region which in turn is part of the WDC programme of research on Travel to Work Areas and Labour Catchments which has been a key element of the WDC Policy Analysis work programme for the last 10 years.

The work on smaller labour catchments follows on from the WDC report published in 2018, Travel to Work and Labour Catchments in the Western Region, A Profile of Seven Town Labour Catchments (2018). This provides a detailed labour market profile of the principal towns in each of the seven counties of the Western Region, based on travel to work patterns, namely: Galway, Ennis, Sligo, Letterkenny, Castlebar, Roscommon and Carrick-on-Shannon and is available for download here. (14.2MB)

The map below illustrates all the labour catchments across the Western Region, arising from the analysis of Census 2016 data.

Map 1 Labour Catchments across the Western Region 2016

The analysis of smaller labour catchments reviews the remaining 26 complete labour catchments contained within the Western Region and the 26 reports will be published shortly. Here is a sneak preview of some findings and points of interest.

The 26 complete smaller labour catchments are distributed across each of the counties of the Western Region as the table below shows.

Table 1 The 26 smaller Labour Catchments in Western Region Counties, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

The smaller labour catchments range in size from the largest, Ballina in Co. Mayo with 9,034 resident workers, to the smallest, Charlestown-Bellahy with 962 resident workers.

Each labour catchments has a greater number of workers living there compared to the figure reported in the Census for the town at its core, indicating a greater labour supply available than might otherwise be considered.

Of the 26 smaller labour catchments 15 reported an increase in numbers over the 10 year period from 2006 to 2016, while 11 of the smaller labour catchments reported a decline in numbers over the same period.

Generally, those that reported a decline are somewhat remote, for example five of those that reported a decline are located in Co. Donegal, namely, Ballybofey-Stranorlar, Buncrana, Killybegs, Bunbeg and Ballyshannon. Belmullet in west Mayo also recorded a decline in the number of resident workers living there over the 10 year period. A further four catchments in east Mayo/Roscommon reported a decline; namely Charlestown, Ballaghaderreen, Boyle and Castlerea, while Gort in co. Galway also had a decline in resident workers living there over the 10 year intercensal period.

In the case of the labour catchments in Co. Donegal, the larger labour catchments of Donegal town and Letterkenny, both recorded an increase over the period indicating move from the smaller more rural catchments in the county to the larger centres and this in part accounts for the changes.

For the centres in Mayo and Roscommon which reported a decline in numbers, some of this can be accounted for by growth in adjacent centres such as Castlebar and Carrick-on-Shannon but further analysis is needed to explain the changes in detail.

There is also some evidence of greater levels of longer distance commuting to Dublin and other locations, for example, the numbers travelling from the larger catchments of Galway city, Sligo and Ennis to work in Dublin has more than doubled over the 10 year period. This trend is likely to be evident for the smaller centres also.

However, it is also true that rural areas remain very important places of work. Across many of the 26 labour catchments the second most important place of work after the town itself is the rural parts of the county. Smaller centres and rural areas are very important employment centres and the analysis will show that this employment extends across sectors such as Education, health and Social Work, Manufacturing and Wholesale, Retail and Commerce.

Further detail will be available following the presentation at the NERI conference and will be posted here

 

Deirdre Frost

 

 

Changes and Trends in Disposable Incomes in Western Region Counties

The CSO has recently published data on Household Disposable Incomes at county level as part of the ‘County Incomes and Regional GDP 2016’ release.  This release contains useful trend data on incomes for counties as well as information about the levels of different household income components for each county.  Data on regional GDP, which is also part of this release, will be considered in a future post.

Here I give an overview of the 2016 Disposable Income data (and the estimates for 2017) before considering some of the changes over time.  It should be remembered that the ‘Disposable Incomes’ as discussed in this post are calculated at a macro level and the county data is most useful for comparison among counties and over time.  Indeed the CSO notes that “While the county figures involve uncertainty, they do provide a useful indication of the degree of variability at county level.”

The map from the CSO below gives a quick overview of Household Disposable Income per person in 2016.  It shows, unsurprisingly, that the highest disposable incomes are in the east and south, while counties in the west and north have the  lowest disposable incomes.   Dublin, Limerick and Kildare are the only counties where per capita disposable income exceeded the state average in 2016 although Wicklow, Cork and Waterford, were just below (see Figure 2below for more detail).

 

Source:  CSO, 2019, County Incomes and Regional GDP 2016

A summary of key data for the Western Region is provided in Table 1 below.  The data for 2016 can be regarded as more robust than the 2017 estimates and so it is used for most of the comparisons in this post.  In 2016 Disposable income per person in the Western Region was €17,934 and in 2017 it had increased to €18,128 (I have calculated the Western Region figures using inferred population estimates).

 

Table 1: Disposable income data for Western Region counties

*CSO Estimate  ^Own calculations

Source:  CSO, 2019, County Incomes and Regional GDP 2016  and CSO Statbank Table CIA02

 

Disposable income per person in Donegal is consistently the lowest in the region (and nationally) and estimates for 2017 show a small decline (-0.6%) in incomes in Donegal between the two years.  Disposable Incomes in Donegal in 2016 were only 77% of the state average.  Only three Western Region counties (Sligo, Galway and Leitrim) had disposable incomes of more than 90% of the state average, while Clare had a disposable income of 88% of the state average, Mayo 86% and Roscommon 83%.  The Western Region as a whole had a disposable income per person of 87% of the state average in 2016.

The small changes in disposable incomes between 2016 and the 2017 estimates are shown in Figure 1 below.  As noted, there was a decline in Donegal, and in Leitrim, Mayo and Roscommon the growth was less than 1%.  The most significant growth between 2016 and 2017 was in Clare (2.4%).  For the Western Region as a whole, disposable incomes showed a growth of 1.1%.  Disposable income per person in the State was €20,638 in 2016 and is estimated to have grown by 3.7% to €21,397 in 2017.  As noted, however, the 2017 data is estimated.  All counties showed more significant growth in Disposable Incomes between 2015 and 2016 (Table 1 above).  The largest growth in the region that period was in Mayo (4.6%) and Roscommon (4.4%).

 

Figure 1: Disposable Income per person for Western Region counties and the State, 2016 and 2017 (€)

*CSO Estimate  ^Own calculations

Source:  CSO, 2019, County Incomes and Regional GDP 2016

 

Disposable income per person for all Irish counties is shown in Figure 2 below.  Disposable income per person in Donegal is lowest in the state, and it is third lowest in Roscommon (Offaly is second lowest).  In contrast, Sligo has the tenth highest disposable income per person, and Galway is in eleventh place.  The highest disposable incomes nationally are in Dublin, Limerick and Kildare.   These, along with Wicklow, Cork and Waterford, all have Disposable Income per person of more than €20,000 per annum.

 

Figure 2: Disposable Income per Person for all Counties, Western Region and State.

Source:  CSO, 2019, County Incomes and Regional GDP 2016

 

Trends in Disposable Incomes over time

It is also interesting to look at changes in disposable incomes over time.  Figure 3 shows trends in disposable incomes in the Western Region between 2000 and 2016.  All of the counties show a very similar growth trajectory with rapid growth to the 2008 peak followed by rapid decline.  There was a small peak in 2012 followed by a fall in 2013 which related to a decline in social transfers as discussed here.  This decline between 2012 and 2013 which occurred in all counties, has mostly been followed by a period of growth to 2016.

 

Figure 3: Disposable Income per Person for Western Region Counties 2000-2016 (€)

Source:  CSO, 2019, Statbank Table CIA02

 

Disposable Incomes in the Western Region compared to the State

While Figure 3 shows the actual Disposable Incomes per person, when considering the trends among counties it is helpful to use indices so that county figures can be examined relative to the State (State=100).  Thus Figure 4 provides a contrast to the more positive growth trend indicated above in Figure 3 which showed growth in disposable incomes in Western Region counties between 2013 and 2016.  Growth rates in the Western Region were lower than for the state as a whole and so Figure 4 shows that Disposable Incomes in Western Region counties are declining relative to the state average (although there is some recovery relative to the State indicated between 2015 and 2016).  Figure 4 also reminds us that Galway was the only Western Region to have had a Disposable Income of higher than the state average during this period and this was only for one year in 2010.

 

Figure 4: Index of Disposable Incomes per person in Western Region counties 2000-2016, State=100

Source:  CSO, 2019, Statbank Table CIA02

 

Have Disposable Incomes Recovered?

Given the significance of the peak in Disposable Incomes in 2008 it is interesting to examine how Disposable Incomes performed in 2016 relative to that peak.  Although there has been some recovery in Disposable Income since their lowest point in 2013, Disposable Income per person in 2016 was below that for 2008 in all of the counties in Ireland (Figure 5).   Indeed for seven of the counties Disposable income was over than €4,000 per person less in 2016 than it had been in 2008.  Two of these counties (Roscommon and Clare) are in the Western Region.  As was shown in Table 1 above Disposable Income in 2016 was more than 20% lower in Roscommon (€4,401) in 2016 than it had been in 2008, while in Clare it was more than 19.1% less (€4,277).  Most significantly, in Meath incomes were €5,544 higher in 2008 than in 2016.

 

Figure 5: Difference in Household Disposable Income per person in 2008 and 2016

Source:  CSO, 2019,  Statbank Table CIA02

 

In contrast, Limerick is the county showing least difference in disposable income per person in 2008 compared with 2016 (- €321).  Dublin and Kerry have also recovered relatively well, although there is still a significant difference between Disposable Incomes in these counties in 2016 and 2008.  Of the Western Region counties Sligo has recovered best, with disposable incomes only 8% below that in 2008 (€1,746).  Interestingly, Donegal (14% less) and Mayo (13%), which are among the Western Region counties with the lowest Disposable Incomes per person, also show a less significant gap to 2008 than other Western Region counties.  However, it is of concern that disposable incomes in all counties are still considerably lower than they were in 2008.  While the Irish economy has recovered well in the last few years, this has not fed through to disposable incomes as measured in this data.

The differences in disposable incomes among counties can be explained by the changing patterns in the components of household incomes (as was discussed here and here).  I will examine trends in these in the most recent data on income components in a future post.  The growth and change in the regional economies as shown by the Regional GVA data will also be examined in a future post.

 

Helen McHenry

 

 

Galway as a Key Regional Driver

The WDC recently presented to Galway Chamber (presentation available here), noting some of the work they have recently undertaken and highlighting some policy implications for the Region as well as the city.

Galway – which Galway?!

Galway city and its reach goes well beyond the city boundary, but measuring this is complicated. In part because there are different measures depending on the role performed by the city, for example as a centre of excellence for health it has an extensive regional remit. More recently there is consideration of the Galway Metropolitan Area Spatial Plan (MASP) as part of Ireland 2040 and the National Planning Framework.

Travel to Work Areas

Another way of examining the impact and influence of Galway is examining its labour catchment. The WDC has analysed labour catchments, based on Travel to Work Areas, which in turn are based on the commuting patterns of workers resident in the Western Region. The WDC first undertook this exercise based on Census 2006 data and has completed the same analysis 10 years later with the most recent Census in 2016. This provides useful trend data, which shows a growth in the size of the Galway city labour catchment over the period. The Galway city labour catchment and the extent of commuting to the city highlights the extensive reach of the city across the entire county and beyond into parts of Galway and Mayo.

Highlights from 2016 Census

The recent Census data shows that between 2011 and 2016 the number of people living in Galway city grew by over 4% (4.2%), and by 2.4% in County Galway. Both the city and county had much higher population increases than anywhere else across the Western Region, (Mayo and Donegal recorded slight declines).

When examining the socio-economic profile of residents, the figures for Galway city are generally very similar to the state average, for example, in terms of the employment (53.4%) and unemployment rates (7.9%) and the share not economically active (38%) the Galway city figures and the State are the same.

NPF and RSES

There was a discussion on the National Planning Framework and the Northern & Western Regional Economic and Spatial Plan. While the NPF is to be a move away from ‘business as usual’, from a regional perspective the focus is on the five cities. A concern is implementation and the importance of sectoral policy as an instrument of change for both capital & current spending. Sectoral polices need to be aligned to support the move ‘away from business as usual’. However, there is little evidence of this in the NPF, so for example, policies such as the National Aviation Policy devised well before the NPF now need to be reviewed to support the regional population and employment targets.

On the Northern & Western Regional Economic and Spatial Plan, while the WDC welcomes regional population targets there needs to be more commitments to help deliver. There is much potential in the regional centres but there needs to be better links and investment, however much of this is at the back end of the programme rather than being front loaded. As we know from previous spatial planning exercises (e.g. National Spatial Strategy), implementation is key. What happens if priorities of a Government Department or sectoral agency conflict with RSES?

Policy implications for Galway

Better intra-regional transport links e.g. M18 have extended labour catchments & opened up new opportunities, for example there is now more commuting for work between Galway, Ennis, Shannon and Limerick. This can be a key asset for large employers looking to access the skills they need. The Galway-Ennis-Shannon- Limerick may currently be the most cohesive element of the Atlantic Economic Corridor and it illustrates how good transport links are critical.

Employment and good job opportunities are important in ensuring skilled people will stay in the region and Galway needs to attract new and dynamic enterprises. Employment is very important but Galway as a place to live is equally, if not more important. Place of residence is usually more stable than place of employment, therefore retaining the good quality of life available in Galway and improving on it should also be a policy priority.

Galway City and Chambers city Regions Conference

The idea of the regional cities working together more cohesively was a key theme discussed at the conference on urban development hosted by the Chambers of Commerce in the five cities – Cork, Dublin, Galway, Limerick and Waterford, held in NUI Galway on 28th March. The conference, entitled ‘Ireland’s Cities – Powerhouses of Regional Growth’, explored how Ireland’s five cities can fulfill the goals of economic development for their regions set out in the National Planning Framework (NPF) and Project Ireland 2040.

The Minster for Housing, Planning and Local Government, Eoghan Murphy TD, opened the conference and welcomed the initiative, pointing to the opportunities for urban growth and regeneration without urban sprawl. John Moran, Chair of the Land Development Agency pointed to the opportunities for the four regional cities to work together to create a counterbalance to the East and to combine capacities to create more opportunities. Other speakers included Anne Graham, CEO of the National Transport Authority.  John O’Regan, Director of AECOM discussed the results of their Survey on Our Cities’ Infrastructure Needs and Dr. Patrick Collins from NUI Galway discussed a Vision for Galway as an example of urban regeneration highlighting issues and opportunities. The presentations will be made available on the Galway Chamber website shortly.

 

Deirdre Frost

WDC Submission on Draft RSES for Northern & Western Region 

Last week the WDC made a submission to the public consultation being held by the Northern & Western Regional Assembly on their Draft Regional Spatial and Economic Strategy.  The submission is available here.

As we’ve provided substantial input previously to the preparation of the Draft RSES, in this submission we mainly comment on the specific text and content of the Draft RSES document and pay particular focus to the 211 Regional Policy Objectives set out.

Some of the general comments contained in our submission include:

A Rural Region

  • Adapting the ‘city-led development’ approach of the National Planning Framework (NPF) to a highly rural region presents a considerable challenge. The RSES for the NWRA Region needs to have flexibility to take an approach more suited to the rural nature of its settlement pattern.
  • Rural areas provide much of the urban workforce and urban demand. Rural-urban interlinkages, including travel to work patterns, need to be given greater consideration.
  • Job creation in smaller towns, villages and rural areas, as well as remote working, can bring closer alignment of housing and jobs. Building more houses in large urban centres is not the only route to greater alignment.

Implementation

  • Many of the Regional Policy Objectives do not include detail of how they will be implemented, who will be involved in leading or implementing them or the timeframe for implementation.
  • A mechanism is needed to achieve the required alignment of a large array of national, regional, local, sectoral, public and private organisations, policies, priorities and strategies to ensure implementation of the RSES. It needs to be clear what will happen if the priorities of a Government Department or sectoral agency conflict with the RSES.

Growth Ambitions

The Draft RSES is based on a Growth Framework composed of 5 Growth Ambitions: 1) Vibrant Region; 2) Natural Region; 3) Connected Region; 4) Inclusive Region; 5) Enabling our Region.  Some of our key points on these included:

  • The Atlantic Economic Corridor (AEC), as an agreed place-based platform for economic growth, should be designated as an Economic Zone in the RSES.
  • Adopting a ‘sector’ approach to economic and enterprise development misses out on many ‘cross-cutting’ themes e.g. digitalisation, AI, finance.
  • There is an urgent need to review national Ports and Aviation policy to move away from the ‘business as usual’ approach which reinforces the dominance of Dublin Port and Airport.
  • Delivering Atlantic Corridor road projects (on the N17/15) should be prioritised to take place earlier (no commitment in current NDP to begin construction before 2027).
  • Some care is needed in focusing on ‘infrastructure corridors’ – this approach will not work in all circumstances and areas distant from such ‘corridors’ risk further disadvantage.
  • RSES should contain a stronger commitment to the extension of the natural gas grid.
  • RSES needs to focus on improving living standards for residents of the Region as a key objective in its own right, rather than simply as a way to attract companies and support business.
  • More reference is needed to the potential impact of Brexit.

The full submission is available here

Following the public consultation (which closed on 8 February) the NWRA will prepare a report on issues raised in submissions/observations and recommend whether the RSES should be made with or without amendments. It may necessary to hold another phase of public consultation before the RSES can be finalised. You can check for updates on the process here.

The Draft Regional Spatial and Economic Strategy for the Southern Regional Assembly  is still open for consultation, with a deadline of 8 March 2019, and a future post will discuss the WDC’s submission to that consultation.

Pauline White

Give your view on the development of the Northern and Western Region- make a submission on the Draft Regional Spatial and Economic Strategy

Just a reminder that the Draft Regional Spatial and Economic Strategy for the Northern and Western Regional Assembly (NWRA) is currently out for consultation, with a closing date of 8th February 2019.

The National Planning Framework (NPF) published last year, provides a framework for development and investment over the coming years. Under the umbrella of Project Ireland 2040, it was published with its companion, the National Development Plan (NDP), a 10 year strategy for public investment.

The NPF is a framework for the development needed to underpin population growth in Ireland of up to 1 million people (by 2040) with approximately 50% of this growth to be in the five main cities.  The Framework is underpinned by 10 National Strategic Outcomes and, central to it, is the concept of Compact Growth identifying where new growth can take place within the existing envelope of our Cities, Towns and villages.

The primary vehicle for delivering the NPF is through the implementation of Regional Spatial and Economic Strategies (RSES) for each of the three NUTS 2 Regions shown on the map below.  The Assembly in each of these Regions (the Northern and Western Region, the Southern Region  and the Eastern and Midlands Region) has a draft RSES currently under consultation.

The NWRA, through the RSES, aims to provide regional level strategic planning and economic policy in support of the implementation of the National Planning Framework and provide a greater level of focus around the National Policy Objectives and National Strategic Outcomes in the Region.  The challenge for the NWRA was to take the high-level framework and principles of the NPF and work out more detail at regional and local authority levels.  This NWRA RSES introduces the concept of a Growth Framework with ‘Five Growth Ambitions’ defining the priorities for the Region and how they are mutually intertwined. The five are:

  • Growth Ambition 1: Economy & Employment – Vibrant Region
  • Growth Ambition 2: Environment – Natural Heritage
  • Growth Ambition 3: Connectivity – Connected Region
  • Growth Ambition 4: Quality of Life
  • Growth Ambition 5: Infrastructure – Enabling Our Region

The draft NWRA Strategy can be viewed or downloaded here.

Written submissions or observations with respect to the Draft Regional Spatial and Economic Strategy for the Northern and Western Regional Assembly and the accompanying reports may be made between 19th November 2018 and 5pm on 8th February 2019 (both dates inclusive) through one of the following media:

On Line: Completing the RSES Web Submission Form available here.

Email: rses@nwra.ie

Mail: ‘RSES Submissions’, NWRA, The Square, Ballaghaderreen, Co. Roscommon. F45 W674

The focus of this post has been on the NWRA RSES.  In a future post we will outline key elements of the Draft Regional Spatial and Economic Strategy for the Southern Regional Assembly  (consultation closing date is 8th March 2019).  The Eastern and Midland Regional Assembly Draft RSES is also currently out for consultation, with a closing date of 23rd January 2019.

 

Helen McHenry