RECENT UK spending cuts combined with the reduction of the State’s capital infrastructure budget will result in a 40 per cent reduction in the amount of money being invested in Ireland’s infrastructure, a joint UK and Ireland business forum heard yesterday.
Ibec and the Confederation of British Industry (CBI) argue that a UK and Ireland public-private finance initiative could help finance essential infrastructure.
The Ibec/CBI Joint Business Council economy and public expenditure forum heard in Dublin that the combined investment of the UK and Irish capital programmes for the island as a whole would be reduced from pre-crisis levels of €11 billion per annum to just €6.5 billion.
Hugh Crossey, managing partner of PricewaterhouseCoopers Northern Ireland, welcomed the UK’s recent Comprehensive Spending Review for Northern Ireland, which, he said, had brought a sense of certainty around the scale of the fiscal challenge for the Northern Ireland Executive.
However, he said the Joint Business Council, of which he is chairman, was concerned by the cut in the annual capital budget in Northern Ireland by almost 40 per cent in real terms to € 1 billion over this period.
“This reduction, combined with commitments by the Irish Government to reduce its capital programme by € 1 billion to around €5.5 billion, is a very severe reduction and will have a negative impact on businesses in both economies.
“On the basis of these figures the capital programme of the two economies will be reduced from a pre-crisis average of € 11 billion per annum down to just € 6.5 billion, a reduction of almost 40 per cent.”
He said the implications of these cuts in terms of upgrading infrastructure and the productive capacity of the all-island economy were severe, particularly in the North where the infrastructure deficit was most in evidence.
“There are significant opportunities to utilise cross-Border co-operation mechanisms to reduce waste, duplication and cut costs, which will contribute to maintenance of core public services in the two jurisdictions.
“Both administrations should also focus on mobilising private sector finance,” he added.
