Meet the Leaders - IBEC session with An Taoiseach

Last week I had the pleasure to attend the first of a series of 'Meet the Leaders' events at IBEC. This one started at the top with our Taoiseach, Simon Harris. The session was wide ranging, covering international relations, trade, employment, geopolitics and competitiveness. One of the key areas for discussion was the critical need for infrastructure and An Taoiseach took us through his party's thinking on a new Infrastructure Department.

Competitiveness

An Taoiseach acknowledged that our infrastructure was directly impacting our competitiveness. He referred referred to the recently released Drahgi report on European competitiveness which recognises that addressing Ireland's infrastructure deficit will be key to improving our competitiveness. The Government's reaction is the report has been positive referencing a need to restrain current expenditure while focusing on increasing investment in energy, water and waste treatment. It's clear from what we in PwC are seeing, when interacting with our clients and bodies such as the IDA, that Ireland's competitiveness is suffering as a result of our infrastructure challenges. This was further underlined by Apple, who earlier this year said that our competitiveness should not be taken for granted and that other countries are aggressively competing for FDI. The issue stretches beyond energy, water and waste treatment, however, with a need to accelerate public transport plans, healthcare investment and of course housing.

Infrastructure Department

The Taoiseach discussed the topic of a Department of Infrastructure, something he flagged recently at the Magill summer school and has also written about it in the Business Post. He set out the challenges with infrastructure delivery in Ireland, that projects are taking too long to be delivered, that there is expertise to deliver but it sits in various departments and can often lead to a siloed approach. He emphasised the need to bring together expertise into one Department to drive transport, energy and other infrastructure projects forward. He acknowledged that he and his team are at the early stages of developing what this said he would welcome peoples views.

I'm on the fence about this proposed new Department. If thought through and structured in the right way, it may well have the ability to affect change and accelerate delivery. But let's be clear, delivery rarely sits at the Government Department level so hiring project managers into a new Department to lead infrastructure projects and programmes is unlikely to work. The role of an Infrastructure Department should be to provide leadership, expertise and guidance and champion projects and programmes across various sectors to be delivered by what are known as the Sponsoring Agencies or delivery bodies - these are the entities charged with, and who have the expertise to deliver. Examples include Transport Infrastructure Ireland and the National Transport Authority in transport, Uisce Eireann in water, Eirgrid and ESB in energy, the Land Development Agency, local authorities and Approved Housing Bodies in housing.

What should an Infrastructure Department look like? My thoughts

There are many examples of Infrastructure Departments and Agencies in Governments and plenty of lessons learnt from ones that have worked and ones that have not. From an Irish?perspective, I think there are three key areas such a Department needs to focus on:

1. Strategic advice and guidance - The Department should be the custodians of a 20-30 year infrastructure strategy that looks at all areas of infrastructure (transport, energy, healthcare, social housing, education, etc.) and seeks to assess problems, solutions and paths forward to benefit the economy. And they would also own a more detailed 5 year plan that sets out specific projects by sector, details of timelines and involvement required from public and private sectors. This department would report to the Cabinet and work closely with other Departments charged with delivery of that infrastructure (DoT, DECC, DoH, DHLGH etc.) and their respective agencies and/or semi states. The Department would also provide advice and assistance with prioritisation, linked closely to National Policy objectives, including the NPF and the Climate Action Plan.
2. Assurance - monitor the pipeline of projects (working closely with the line Department) to ensure projects are delivered on time, on budget and are realising the benefits that were envisaged. Ultimately that's ensuring that the Infrastructure Guidelines are adhered to in a robust way and that any blockages are addressed in a timely manner. This could include the Major Projects Advisory Board (currently in DPENDR) in this Department as a body that assures projects and programmes.
3. To assist in delivery and help address issues - provide appropriate expertise and guidance to the Departments or delivery agencies in areas such as planning, funding, delivering and maintaining infrastructure and helping address key risks and issues as they arise. A constant challenge we see are Agencies struggling to prepare detailed plans for the delivery of their projects. Some are more developed than others but where agencies need help, this Department could provide that through their own internal expertise or access to external providers with the right expertise.

To work optimally the Department should be should have strong leadership and appropriate expertise in infrastructure planning, funding and delivery to collaborate across Government. They should recognise the links across the various sectors and be willing to work in a pragmatic and agile way with other Government Departments and the delivery agencies.?

Will this help accelerate infrastructure delivery?

A Infrastructure Department, if set up in the right way (not adding bureaucracy), will help but it's not the panacea. In reality, the challenges around the delivery of infrastructure are wide ranging and to tackle them in a meaningful way you have to take on each area. Examples include the planning system, people's approach to the planning system (a big challenge), skills and resources, tangible pipelines to attract investment, funding and financing. Some of these issues are being worked on but it takes time to show up in finished projects. We will get there and leadership and vision, with the right level of support from an Infrastructure Department will certainly help.