April 2012


Yesterday the CSO released a new tranche of the Census 2011 results. The new tables relate to the population of towns and rural areas and population by area.  We’ve taken the data an visualized it on AIRO as interactive maps and graphs:

Map of population and population of towns (see map below)

Components of Population Change 2011 (Birth,Deaths & Migration)

Urban/Rural Population Split at County Level – Census 2011

Irish Towns categorised by Population, Area and Change (see image below)

With respect to towns, 62 per cent of the total population now live in urban areas.  Nearly all towns grew between 2006-2011, with some growing very strongly (10 by over 50% – Saggart, Courtown Harbour, Newcastle, Carrigtwohill, Ballymahon, Rathnew, Kinsealy-Drinan, Annacotty, Ballyjamesduff, Sixmilebridge).  Eight towns shrunk in size, with Templemore decreasing by 13.1%.

 

Justin Gleeson and Rob Kitchin

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Commentary on the recent announcement of the establishment of a national water company, has, perhaps, understandably focussed on the related introduction of household water charges. The significance of the decision to establish Irish Water goes beyond the issue of water charges (which was signalled long in advance of last week’s announcement). Given the minimal level of detail provided by government on the specific remit and function of Irish Water, it is as yet unclear, how precisely its establishment will impact on the management of water resources in Ireland. Nevertheless, government decisions across the spectrum of water policy have been delayed over the past twelve months pending the formal decision on the establishment of a national water company, a decision which was expected in September last year. In particular, the question of adequate governance arrangements and resourcing for the implementation of the Water Framework Directive (WFD) has been put on hold.

A recent study by the International Centre for Local and Regional Development (ICLRD) on river basin management and spatial planning in Ireland, North and South, found very significant deficits in relation to current governance arrangements and resourcing for  WFD implementation. The study furthermore outlined three ‘strategic options’ for WFD implementation, each involving different institutional arrangements. These strategic options which include reference to the (expected) establishment of Irish Water are reproduced below:

A. Establish the implementation of River Basin Management Plans (RBMPs) as a function of regional government

Allocating responsibilities to Regional Authorities would establish a clear linkage between river basin management and strategic spatial planning. It would also allow for a significant concentration of resources and expertise at the regional scale and thus development of the required critical mass for effective action, which is not currently available at the level of local authorities. The spatial mismatch between the boundaries of Regions (NUTS III) and River Basin Districts would, however, require a high degree of close cooperation among Regional Authorities. Regional Authorities would also need to act in close cooperation with the water management and spatial planning sections of local authorities, as well as coordinating with sectoral agencies and stakeholders. Imposing an additional layer in an already cluttered and complex governance landscape brings inherent risks which would have to be carefully managed.

B. Centralise implementation responsibility under a new National Water Company/Agency

The current Fine Gael / Labour Programme for Government, includes proposals for the establishment of a National Water Company, provisionally known as ‘Irish Water’.  This is likely to be a semi-public agency that will sit alongside the Office of Public Works (OPW), EPA and others.  This organisation could be established with a clear remit in relation to RBMP implementation from the outset. The recently published report on public sector capital investment indicates that a decision will be made in relation to the establishment of this agency by the end of 2011. It also refers to funding of ‘priority schemes’ in RBMPs under the Water Services Investment Programme (Department of Public Expenditure and Reform, 2011).  An advantage of this model may be a close linkage between river basin management and water treatment and supply policy which may have significant benefits in relation to cost recovery and sharing of resources. Such a model, may, however, favour more traditional ‘hard’ engineering approaches to water quality protection; approaches which the WFD seeks to move away from and are associated with inhibiting the development of integrated cross-sectoral approaches. In particular, a centralised, sector-specific approach of this nature may make the establishment of links with spatial planning more difficult. This model would need to be accompanied by specific measures and additional resources to ensure that that planning decisions are informed by river basin management and water quality concerns.

C. Centralise implementation responsibility under the Environmental Protection Agency 

The Environmental Protection Agency (EPA) has significant technical expertise across the spectrum of ecosystem management, water quality protection and pollution control. The agency already plays a key role in the monitoring of water quality under the WFD. This model has the potential to lead to the development of innovative multi-disciplinary approaches to river basin management drawing on expertise, knowledge and data from across the environmental sciences. The disadvantages associated with a centralised model, outlined above, also apply in this case, however. Fostering stakeholder engagement and public support would require considerable additional resources and the development of skill-sets which are not currently well-developed in a technical organisation such as the EPA. The experience of water resource managers in Berlin-Brandenburg points to the challenges for technical organisations associated with a shift to the more participative form of governance which the WFD requires.

D. Further develop and enhance the lead Local Authority model

The preparation of RBMPs in the Republic of Ireland was led by local authorities with a lead local authority designated for each River Basin District. It is evident that local authorities currently do not have the requisite levels of resources required for implementation. With significant allocation of resources to lead local authorities, this model could, however, prove an effective means of coordinating and delivering implementation objectives. This model would involve limited reorganisation of existing institutional arrangements. The spatial mismatch issue would not arise, provided the lead authorities had the capacity to ensure cooperation from across the local authorities within the River Basin District. In Northern Ireland, the value of stakeholders was recognised from the outset; however, there is still work to be done in the Republic of Ireland to bring local stakeholders within the action programmes – for their value as environmental experts in their own right, and as leaders of community-based action and education projects.

Retaining responsibility for RBMP implementation within local authorities would provide opportunities for greater integration with the planning and development process than might otherwise be the case. This coordination objective would need to be supported with specific funding including enhanced capacity in the area of environmental planning.  It would also be possible to devolve implementation to individual local authorities. Again substantial investment of resources would be required in order for this model to perform effectively. Specific provision would also need to be made for coordination across local authority boundaries to ensure coherence at River Basin District level.   In the medium to long-term, enhanced local autonomy may be instrumental to ensuring community acceptance and indeed ownership of local project-based measures which seek to integrate river basin management, and spatial development objectives.

It is imperative that key issues of environmental responsibility and sustainable resource management are not forgotten in the current focus on water charges and the short-term costs to the taxpayer. The ICLRD report which draws significantly on international case studies of good practice details the extent of the challenges involved in moving towards sustainable water resource management in Ireland. These include the development of expertise in specialist areas of environmental planning as well as the challenges of communicating across disciplinary and sectoral boundaries which should not be underestimated given the integrated approach demanded by the WFD. Above all, however, adequate response to challenges posed by the WFD requires strategic leadership and the allocation of a sufficient level of resources through dedicated budgets.  Each of the strategic options outlined above have both advantages and disadvantages. What is important, now, however, is that decisive action is taken to provide an adequate framework for implementation to prevent further deterioration in the quality of Ireland’s water resources.

Cormac Walsh

Published in today’s Irish Times.

If Irish voters approve the European fiscal treaty in the referendum on May 31st it will no doubt set off a heated debate as to the reasons for that vote. But it appears already that there are two sets of reasons for which Irish voters might vote Yes to the treaty – each with different implications for the future of Europe and for Ireland’s place in it.

First, out of fear – a fear based largely on the consequences of a No vote.

Most narrowly, this is based on worries that Ireland might not have access to further external funding if needed after the current funding programme runs out in 2013.

More broadly, the peripheral countries fear that the fiscal compact will leave them isolated as the healthier economies in Europe insulate themselves from the difficulties across the euro zone as a whole.

These fears won’t trouble Europe’s elites too much if Ireland delivers a Yes vote and the fiscal treaty marches on. But they should.

Support for the European project is declining rapidly in the very countries that were once Europe’s greatest backers. Eurobarometer surveys show that the percentage of people in Ireland, Italy, Portugal and Spain who “tend to trust the EU” fell from 57 per cent before the crisis in April 2008 to 42 per cent in May 2011.

This collapse in institutional legitimacy extends not only to the ECB but to the previously popular commission and even parliament. A damaging split is opening between the periphery and even the smaller countries of the core.

This should certainly trouble German chancellor Angela Merkel who, in recent speeches, has argued that the fiscal treaty is a strongly pro-European response to the crisis that will rebuild trust in finances and between governments, and will require greater strengthening of the centre in Europe and deeper political union.

Her speeches echo in arguments that the treaty will be a “gateway”, a platform from which policymakers can undertake future efforts to rebuild the European economy. She calls, therefore, for a second kind of Yes vote – a vote for the treaty as the foundation stone for rebuilding Europe.

Indeed, Merkel can make a strong case that fiscal discipline has been a central plank of the European model in the past. However, in these continental and Nordic economies, fiscal discipline was only one part of a broader social and economic compact. A crucial element in the success of those economies was high rates of investment in technology, research and other productive assets.

This was combined with workplaces that emphasised worker participation, ingenuity and empowerment. Together these are the fundamentals of German exporting success.

Furthermore, all this was held together by the best systems of social protection in Europe. In the European model at its most successful, fiscal discipline was part of a mutually reinforcing package of measures that locked together fiscal, economic and social compacts.

These additional elements are missing from Merkel’s vision of a post-crisis Europe. The banking and financial architecture is designed for greater prudence but hardly to lead the necessary productive investment.

Public investment has stalled or contracted. Bailout programmes have emphasised competitiveness through cost-cutting and weakening social protections, rather than through industrial upgrading and worker involvement.

Ireland’s experience of decline in all these key areas is all the evidence we might need that the European strategy is at present disastrously incomplete.

European institutions could play a critical role here. The European Investment Bank and the structural funds could be mobilised in promoting an investment-led recovery. Policy decisions that could provide national governments with fiscal space to generate economic recovery, including rescheduling debt repayments, are largely ignored. The trillion euro or so in liquidity provided to banks comes with few strings attached in terms of the banks’ role in recovery.

Cross-national investments in vital infrastructure for the knowledge economy could be encouraged further. Institutional changes in terms of financial regulation, promotion of active labour market policies and industrial upgrading could be advanced.

European economies do have a distinctive approach based on a mix of fiscal and monetary caution and substantial, collective investments. Little wonder their leaders tire of lectures from the UK and US where looser fiscal and monetary policy combines with more individualised, speculative real economies. But if they don’t undertake the full package of measures that were at the heart of the European model then they simply prove those critics right.

The European model provided social and economic measures that were counterweights to fiscal discipline – providing short-term stimulus, medium-term productive investment and long-term credible collective commitments to social and economic security.

In the absence of these measures, the fiscal treaty simply institutionalises austerity – in practice and, arguably, even by rule.

If the European project is to be rebuilt the case must be made in both core and periphery for a broader project of reconstruction.

The prospect of a fiscal compact may provide enough stability in banking, bond and stock markets, and in the euro zone economy to avoid a disastrous short-term meltdown.

Soon, however, the European approach will need to go well beyond the fiscal compact to generate growth, employment and become a motor of recovery in the world economy.

This will require European governments and institutions to rediscover their historical taste for constructive politics and building European solidarity – fiscal compacts based on rules cannot substitute for political construction of social compacts.

If this treaty is to be a gateway to the future Europe’s elites will need to put some of the building blocks in place for the road ahead.

Sean O’Riain

Yesterday saw the publication of the first in a series of reports by An Taisce on planning and environmental policy in Ireland.  State of the Nation: A Review of Ireland’s Planning System 2000 – 2011 provides an overview and critique of the operation of the planning system in Ireland during the period of the worst excesses of Celtic Tiger bubble. It is fair to say that An Taisce is not a neutral voice with respect to planning or environmental or heritage issues, nonetheless their data is compelling, and as they state themselves their purpose “is not blinkered opposition to development, but opposition to blinkered development”.  And we’ve certainly had a lot of the latter in the past two decades along with localism and cronyism and at times corruption.

As part of the report, An Taisce graded each local authority with respect to 8 criteria.

1  Overzoning Amount of zoned land as a percentage of population in 2011.
2  Decisions reversed by An Bord Pleanala 2005 – 2010
3  Decisions confirmed by An Bord Pleanala 2005 – 2010
4  Percentage of vacant housing stock 2006 – 2011
5  Change in vacant housing housing stock 2006 2011
6  Water quality. Urban areas with secondary treatment failing to meet EPS standards 2011
7  Percentage of one-off houses permitted as a percentage of all residential planning permissions 2001 – 2011
8  Legal proceedings commenced following non-compliance with enforcement notice 2005 – 2010

This seems like a fairly robust set of measures to assess planning performance, concerning overzoning, planning appeals, oversupply, water quality, enforcements.  The one variable that would have been good to add for oversupply, but for which their is no data, is vacant commerical property.  Some data on the ratio of serviced and unserviced zoned land and permissions on flood plains, etc would have been useful as well, but would have probably done little to the overall result.  It is perhaps worth noting that variables 4, 5 and 7 would tend to work in favour of urban authorities (though 7 is tempered by 6) – re. criteria 4 and 5 planning might not have been any better in urban areas than rural areas, but very strong population growth meant what was built was occupied.  Regardless, oversupply is a significant issue in many rural counties and should not have been allowed to happen. It should also be pointed out that other government policy, beyond planning policy, was driving development in all counties, but disproportionately in rural counties, namely tax incentives.  Again, how these tax incentive developments were implemented could have been better handled, but there was certainly political pressure to facilitate them.

The results from these variables provided grades for each local authority (see map below).

Using their 8 criteria, nine local authorities score bottom marks: ‘F-‘ is awared to Donegal, Roscommon, Leitrim and Kerry; ‘F’ to Mayo, Galway County, Cavan, Carlow and Waterford County.  All other counties score D’s or E’s except for South Dublin, DLR, Fingal and Galway City who score C’s.  Everywhere it seems was poor, with some counties worse than others.

Why does this all matter?  Planning decisions are economic and social decisions – they set out patterns of development, service costs, travel costs, etc and generally shape the space economy.  Making good planning decisions leads to social dividends and economic growth, poor decisions leads to weak or negative growth, additional costs and losses – and these have long term consequences.   Changes to the landscape such as new buildings or roads or quarries, etc are generally very long-term alterations; they are lived with by not just this generation but many generations to come.  And when it all goes wrong, like it has in Ireland, the taxpayer is left to pick up the costs of excessive development loans (think bank bailouts, NAMA, the troika, austerity, etc) and the social consequences (think unfinished estates, houses flooding, bottled water or water from tankers, etc).

In my view the report should be read by any person interested in sustainable development and communities in Ireland and be compulsorary reading for anyone involved in planning at all scales in the country, particularly councillors, national politicians and local authorities.  As this report and the Mahon Report make clear we need changes to how planning is viewed and understood and how it is implemented.  Planning should be utilitarian and for the social good; some of it in Ireland works that way, much does not.  An Taisce’s report provides much food for thought useful for conceiving what kind of planning system we want.

Rob Kitchin

In an article on Saturday in the Irish Times it was reported that the “Institute of Directors has strongly criticised the proposal to appoint members of the Irish diaspora to State boards, warning that aspects of the initiative are fundamentally flawed. … Maura Quinn, chief executive of the Institute of Directors, said the practical repercussions and unintended consequences of the initiative had not been considered.

I’m going to work my way through each of Maura Quinn’s arguments, which somewhat ironically, I think, perfectly illustrate why we need fresh thinking with respect to the diaspora serving on state boards.

“First, the institute suggests that every State board should have in place a skills and competencies framework.  It believes that all candidates for a particular State board position should be assessed against the relevant framework, rather than appointed on the basis of being members of the diaspora, who have volunteered their services.”

I don’t believe anybody is suggesting that people should be appointed to state boards simply because they volunteered their services.  What they are suggesting is that there are members of the diaspora who would eminently qualify with respect to a skills and competencies framework; that have a huge amount of relevant experience and expertise that they could bring to a particular state body.  Ironically, there are plenty of people on state bodies because they are politically connected rather than having a particular competency – appointing members of the diaspora would actually work to help combat political cronyism in state board appointments.

“Then you get into the practicalities of people who are thousands of miles away,” she said, arguing that the busy schedules of overseas executives may mean they could not travel regularly to attend board meetings in Ireland.  Even though many multinational companies conduct global business meetings via audio or tele-conferencing, the institute believes it is not possible to build up the necessary relationship with other board members without physically attending meetings.  Anybody who is a director on a board will tell you that, no matter how sophisticated [the technology], nothing compares to being actually in the room,” Ms Quinn said.

This is utter baloney and reeks of protectionism.  Company boards and European initiatives are full of people who have to travel to attend board meetings on a regular basis.  Yes, these people are busy but things are slotted into their diaries well in advance and they regularly attend meetings overseas. We’re a small, open economy, people fly in all the time for meetings.  Moreover, many Irish people serve on the boards of companies globally and on European committees which they have to attend in person.  If we follow the logic through, Irish people should resign from such positions because they cannot possibly be attending meetings or doing a good job.  Moreover, a flight from Britain or northern Europe would take less time than the train from Cork or the drive from Donegal.  The argument simply does not stack up.

“Studies have shown there is a relatively small pool of people who regularly crop up on the boards of Irish enterprises, but the institute does not accept that seeking fresh overseas talent with experience of business in foreign markets is necessary, or even advisable.  There are lots of very good people here who are either currently involved or who would be happy to serve on State boards but may not have been asked,” she added. “We need to be more rigorous in identifying the skills that we need and ensuring proper succession planning.”  Ms Quinn said Ireland needed to be conscious of the “optics” of courting overseas executives, as it tacitly implied a lack of suitably qualified people in Ireland.  “If we are going to restore international trust in Ireland, we should be demonstrating that we have trust in ourselves.”

Again this is protectionism and hints at a deep inferiority complex and a fear of change as new thinking and new ways of doing things will inevitably follow external people being appointed to boards.  A true test of trust in ourselves is to have trust to open up our institutional structures and policies to outside scrutiny and new membership.  The argument about succession planning is a red herring – we can succession plan from diverse boards.  And no-one is saying that suitable Irish people not be on state boards; simply that they not be closed shops to people resident in Ireland.  Having a board of say ten people split 8 Irish/2 diaspora would allow for development, succession planning and external participation.

“In January it emerged that the Government was writing to current members of State boards to advise them that they had an option to waive their fees.  Ms Quinn said this suggestion devalued and demeaned the role of a director of a State board.”

So good, sound advice is only worth something if it is paid for?  And we do not want the valued time of senior executives in the diaspora at a bargain – or rather we do but we don’t want to formally have recognize it.  Again protectionism of the present system – we want to retain our cushy additional payments even though we have separate full-time employment and we don’t want anything to undermine this, like unpaid people who are more qualified for the job than we are.  Besides, I’m sure diaspora members will accept a payment if offered.

She added that the institute was not “suggesting that members of the diaspora did not have a role to play in relation to State bodies, but their role should lie in an advisory, rather than formal, capacity.”

That is, not straying into our institutions and systems where they might come to see how the Irish state really works.

Mark Boyle and myself have done a fair bit of work on diaspora strategies over the past couple of years.  We’ve written reports for the Irish, Scottish, Armenian and Canadian governments, as well as the World Bank, and spoken to them at length, and we’ve studied the diaspora policies and programmes in a number of countries.  The arguments expressed by the Institute of Directors flies in the face of all thinking in field of diaspora policy.

In fact, the argument sets of all kinds of alarm bells with respect to how Ireland Inc views and values the Irish diaspora.  There has been a lot of government rhetoric about how the diaspora can help Ireland grow its way out of the present crisis and economic recession.  It seems, however, that such help is to be provided informally, with no official recognition, and with little official value placed upon it.  Instead, we get a set of spurious and self-interested arguments as to why it cannot be formally recognised.

Frankly, this position is baloney and wrongheaded and will be counterproductive.  Indeed, with this attitude, it would not surprise me if movers and shakers in the Irish diaspora the next time a government body asks them for advice, investment or to travel back to Ireland for something like ‘The Gathering’ tells Ireland Inc to take a running jump.  Diaspora strategies are built on relationships of give and take.  One cannot expect to simply take solely on one’s terms and with no give.

Someone from Ireland Inc needs to have a quiet word with the Institute of Directors and re-frame their thinking before too much damage is done.  We need the Irish diaspora on our side and on our state boards.

Rob Kitchin

Interesting video explaining how NAMA functions. Warning: Contains content that some taxpayers may find disturbing.

Cian O’Callaghan

In his opinion piece on Tues, 3rd April in the Irish Times, Kieran McGowan of Property Industry Ireland makes the case that to attract FDI there needs to be investment in the commerical property sector: “Without the accommodation, we won’t get the FDI.”  His argument is that: “There is a view that there is an overhang of completed buildings across all parts of the property sector.  This is wrong, particularly in relation to buildings for firms entering the market in key urban centres throughout Ireland.”  He does not provide one piece of data to support this view, only assertion.  The reason for this is that the data available tells a different story.

Savills ‘Dublin Office Market in Minutes’, Q3 2011, report notes that 23% of Dublin office space is vacant.  In the prime locations of Dublin 2 and Dublin 4 the vacancy rate is 16.1% and 23.5%.  Moreover 18% of vacant offices are defined as Grade A.  To put this in context, the amount of empty office space in the city is equivalent to over 200 Liberty Halls (also see the Andrew MacLaran’s post on IAN on the Dublin office market).

The Society of Charted Surveyors Ireland recently reported that the office market had little to no activity with rents/yields falling.  The same was true of the industrial and retail sectors, both with large volumes of excess stock.  In fact, they report that the only part of the property market that is functioning near to normal is agricultural land. 

This is the industry’s own data and is reflective of patterns nationwide.

Whilst I agree that the strategic use of construction will help Ireland recover from the present crisis – particularly in relation to public infrastructure that will serve the general population and industry – we need to be careful not to misrepresent the true nature of the dire position of the Irish property market and the levels of oversupply within it across all sectors.  There is plenty of office stock to deal with most of the needs of FDI, with some minor strategic investment in upgrades or new build (we only need to build new stock for specialist facilities or where the investment is so large that there is no suitable existing empty office space – in both cases this will be for a handful of companies).

As with the housing market, there is a need to harmonize the supply and demand of commercial property in order to reduce oversupply and put a floor in the market.  Unnecessarily building new stock will work to keep the market either falling or flat.

Moreover, rather than overly relying on FDI to get us out of our present slump we urgently need to grow Ireland’s indigenous sector – the sector we should have been investing in when we were ploughing billions of euro into property speculation. They are our ideal tenants of the future.

Rob Kitchin

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