Cancellation of grant aid to industry suggested

The economy is likely to continue to grow rapidly over the next 10 years with a shrinking, but increasingly highly educated, workforce, an economist forecast yesterday. Mr John Fitzgerald of the ESRI was addressing a gathering of local authority and academic planners on "Regional Planning - Making it Work".

The constraints on the national development plan currently being drawn up would be a shrinking labour force, the congestion of infrastructure and environmental issues, he said.

Instead of continuing to attract foreign investment with grants, the Government should perhaps cancel grant aid in all but exceptional circumstances, he suggested.

This was possible in a declining workforce, which was not necessarily a bad thing: a declining workforce would mean that in 2011 we would need to create fewer jobs.

He was surprised the State agency Forfas suggested going outside the State to recruit 10,000 workers to fill jobs here. This would, by his calculations, add 10 per cent to housing prices.

Savings here could be used to improve the State's infrastructure. "The difficulty with our infrastructure is that the State stopped investing in it in the 1980s because it felt it did not have the money," he said.

Pointing to "vast deficiencies" in land available for housing, road infrastructure, electricity and broadband communications, he said that while the ESB, for example, might be happy to bring industrial services to the rural north-west, the overriding concern was whether people would want to settle there.

Increasingly well-educated workers largely wanted to work in urban areas, even if they chose to live outside them. They demanded a high standard of facilities and amenities, and this was a vital consideration in regional planning.

"What it comes back to is where people want to live, and planning must create a good environment," he said.

The shining example of Irish economic growth was Galway city, he continued. Growth had been greater there than anywhere else in the State because a highly educated labour force considered it to be a desirable environment in which to live and work. It also had the facilities which people demanded of an urban environment.

The implications of Galway for regional development were that the growth centres, or nodes, would have to place a lot of emphasis on attracting people, as well as creating jobs, he said.

In terms of environmental protection the creation of a sustainable environment was specially important. The greatest concern in this area was pollution of water courses.