Guest blog: Investing capital in the capital

Economy, Guest Blog | Tue 17 Nov | Author – Business & Finance
Image: Visual Hunt

Marc Coleman is founder of Octavian Research, an economic research publication and public affairs consultancy. Octavian Research and the Greater Dublin Chamber of Commerce have teamed up to produce a report to promote recovery in the region. Here are some of their findings.

Ireland’s policy narrative suffers from what one Taoiseach described to me as ‘The Starling Syndrome.’ Like a flock of starlings, public and commentariat opinion tends to fly in unison in one direction only to turn around 180 degrees and fly in the opposite direction.

After a decade in which Dublin dominated recovery, this is in danger of happening again. Launching ‘Review to Renew’ last week, Public Expenditure Minister Michael McGrath called for submissions to inform government plans for recovery investment next year. Rural and regional T.D.s are right to ensure that their areas get the attention they need. But if the pendulum swings too far from Dublin, the capital and key parts of it could be ignored.

To avoid this – and to avoid the congestion, high house prices, and long commutes produced by the last recovery – Octavian Research and the Greater Dublin Chamber of Commerce, representing South Dublin Chamber, Dun Laoghaire Chamber, Kildare Chamber and Fingal, have teamed up to produce a report to promote recovery in the region.

There are several key messages in the report:

  1. Greater Dublin deserves better: During the last recovery the Greater Dublin region saw much wealth creation certainly – wealth that could have been spread more fairly around Ireland. But it also saw congestion, huge pressure on rents and house prices, lengthening commutes and a deteriorating carbon footprint. This has be avoided in the next recovery. A better spread of resources – moving away from pandemic-prone congestion and towards more green spaces in more affordable community oriented business parks – is what is needed now.
  2. Recovery must be a localised recovery in partnership with local businesses communities and public representatives will enable the marginalised to be included – particularly small business owners and sole traders who are hardest hit by this crisis.
  3. Dublin must get its fair share of investment: No more. No less. Together, the Greater Dublin region constitutes one third of Ireland’s population, half of its economic output and close to 60 per cent of all tax revenue. This means that the entire area should see:
    1. at least €3.3 billion in infrastructure investment
    2. at least 17,000 of the 50,000 new houses promised in the Programme for Government
    3. at least 70,000 of the 200,000 new jobs promised in the Programme for Government

As with the region as a whole, there should be proportionality across local authority catchment areas within the capital. This reflects the sizeable population of each area. South Dublin and Dun Laoghaire Rathdown between them already account for over half a million people, comparable to the combined populations of Cork city, Galway city and Limerick city. They should see at least €1 billion of next year’s capital spend allocated to their areas. Likewise, there should be broadly proportionate allocations to Fingal and Kildare and central Dublin.

During the last recovery the Greater Dublin region saw much wealth creation certainly – wealth that could have been spread more fairly around Ireland. But it also saw congestion, huge pressure on rents and house prices, lengthening commutes and a deteriorating carbon footprint. This has be avoided in the next recovery.

Policy makers should also note that these proportions are based on population shares and this actually understates the significantly higher proportion of economic value created and taxation generated in the region: Comprising about one third of the state’s population, the region contributes three fifths of its tax revenues

  1. Turning crossroads into communities: South Dublin and Dun Laoghaire Rathdown are not just crossroads from central Dublin to the rest of Ireland, or cash cows for the exchequer. They should be treated as communities that deserve to have a fair share of the wealth they generate put back into affordable housing, community amenities and revived retail centres, as well as new jobs in sustainable – economically and environmentally – sectors with localised skills provision to support this.
  2. A voice for Greater Dublin: As well as a more even spread of recovery across the region – and across other regions (our hope is that other Chambers of Commerce will follow suit and present coordinated reports for their region) – Greater Dublin needs a more cohesive voice to ensure the recovery of its different areas is integrated.
  3. A stronger voice for Small Business and Entrepreneurs: The small business sectors has suffered the most during the recession but paradoxically must take most of the risk and do the hard work of generating jobs. Not just during the recovery but beyond it, small business needs a much stronger voice
  4. A Green recovery: The report calls for proper public transport in areas without it (it currently takes longer to commute from Lucan to Tallaght by bus than from Athlone to Tallaght by car), as well as investment in new green sectors such as community energy and a sustainable approach to powering new high tech industries than can replaced jobs lost as a result of Covid-19

Octavian Research’s first strategy for recovery – ‘An Economic Response to Covid-19’ published in April – was about ensuring as rapid a recovery as possible (for instance it called for a July stimulus which occurred). Our latest report – ‘Ensuring inclusive, sustainable recovery in the Greater Dublin Region– is all about making sure the recovery doesn’t neglect the motor of Ireland’s recovery: Without a recovery in Dublin, the rest of the country will not recover properly either

Marc Coleman is founder of Octavian Research, an economic research publication and public affairs consultancy that wrote the world’s first researched strategy response to the Covid crisis (download www.octavian.ie ) and currently produces the world’s first weekly Covid-19 specific economic and business client research note (now in its 32nd edition). He works with leading clients across industry, financial services and government agencies to produce policy influencing research and publications. He has authored five influential books on the current and previous recoveries and worked as an economist with the European Central Bank, Department of Finance, as Economics Editor of the Irish Times and Newstalk 106fm, and as a Sunday Independent columnist. He is a leading speaker, event host and policy analyst.