‘8,000 jobs lost’ as State budgets unspent

THE Government’s failure to spend more than €800 million of its capital budget so far this year has cost 8,000 construction jobs, industry leaders have claimed.

The shortfall comes across all Government departments up to the end of August, when €3.4 billion was to have been spent. Among the departments behind target on capital budgets is the Department of Transport, which has a €275m, or 25%, under-spend this year.

John Gormley’s Department of Environment has not used €244m, almost one-third of its capital spending target, for the first eight months of 2010.

With around 10 jobs created with every €1m invested in capital projects, the Construction Industry Federation (CIF) said these latest exchequer spending figures represent a missed opportunity for the Government to stimulate economic activity by providing vital infrastructure.

“This volume of capital investment has the potential to sustain 8,000 construction jobs for a year. The bulk of this year’s direct exchequer investment will be spent on projects already under way and, in most cases, completed,” said CIF policy and research director Martin Whelan. “But our analysis indicates that sufficient replacement contracts are not being prepared or rewarded, and the figures showing capital spending are almost 24% behind profile reinforce this.”

A Department of Finance spokesman said departments are expected to use their full allocation before the year’s end, when a significant proportion of spending is normally made, but the bad weather at the start of the year caused project delays.

“Many major roads and transport projects are coming to an end, particularly on the routes between the five main cities. But there are far more regional and local schemes now, which allow departments get better value because there is greater competition for them,” he said

More than €70m of the Department of Education capital budget up to the end of August remained unspent, leaving a 27% shortfall on the €278m provision for the first eight months.

Education Minister Mary Coughlan’s predecessor, Batt O’Keeffe, had to carry forward more than €70m that was not spent on capital projects last year.

A department spokesman said the shortfall was mostly accounted for by the rescheduling of payments for third-level projects to the final quarter of the year, and the €241m spent on schools so far is €500,000 more than expected. But the outlay so far this year is barely over half the €376m spent between January and August 2009, even though this year’s education capital budget of €712m is just under €50m less than last year’s.

Irish National Teachers’ Organisation general secretary Sheila Nunan said this is inexcusable when almost one-in-three of the country’s 3,300 primary schools need major buildings works.

“The minister must take immediate action and move dozens of schools to construction immediately,” she said.


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