Analysis of Government Spending:

Dublin Suffering from Severe

Under-Investment in Local
Services and Infrastructure 1

+ New Spending Analysis Shows Historic Under-Investment in Dublin to

Maintain Productivity +
+ Dublin Receives Lowest Capital Spending on a per capita basis despite
economic importance of region +
+ Dublin not ‘too big’ but suffering from under-investment

Far from being ‘too big’, all evidence suggests that Dublin is suffering from a gap
in productive infrastructure investment.
While Dublin’s offering as a location for inward investment is second to none,
there has been significant erosion of its attractiveness in recent years due high
housing costs, poor transport and inadequate infrastructure and local services.
Inward investment lost to Dublin is usually lost to Ireland, as MNCs in key
services and advanced manufacturing areas want to locate in a large urban area.
Firms will continue to want to locate in the Dublin Region, regardless of a policy
ambition to spread FDI evenly throughout all regions.
Despite this, there is a pervasive criticism that Dublin gets disproportionate FDI
due to it being a favoured location for Government investment.
An analysis by Dublin Chamber shows that, far from being a favoured location
for Government investment, the four Dublin Local Authorities receive
significantly less than everywhere else in the country on a per resident basis.
Although it is the economic capital of Ireland, with 47% of national employment
being located in the GDA, Dublin has received much less investment in its
productive infrastructure than is required for it to remain a highly competitive
location.

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Feb 2017

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Despite having such pressures on its productive and social infrastructure, over
the past 7 years, the county received the second lowest capital investment per
capita by central government, receiving less than 50% of the national average
and just 30% of the counties that received the highest levels of funding, such as
Sligo, Kilkenny and Mayo.
Severe levels of underinvestment in its local infrastructure and capital
maintenance, including Housing, Transport, Environment, Development
Management, Education and Employment Services Recreation and General
Purpose Grants is beginning to cost Dublin and Ireland dearly.
The evidence is that FDI firms decide to locate in Dublin despite its sub-par
offering in terms of productive infrastructure, due to the high value they attach
to clustering and agglomeration.
Insufficiently investing in Dublin’s productive infrastructure will not lead more
firms to locate to other regions, it will lead to them locate to other countries.
Lack of investment in core economic infrastructure, such as transport, water,
electricity and housing, has yet to seriously affect inward investment. But sub-
standard infrastructure is beginning to be seen as a huge negative for firms
looking to invest in Dublin.

Other Findings:

Ø On a per capita basis, Dublin has received below average current funding for
local services and average total spending by central government 2009-2016
Ø Dublin has received one of the lowest capital investment per capita in
housing by the Central Government over the 2009-16 period, despite having
proportionately the highest number of households reliant on social housing
supports
Ø Dubliner’s pay proportionally by far the highest household and personal taxes
of anywhere in the country, with the average Dubliner paying over 3 times
the average per capita taxes

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 Average  Annual  Capital  Spending  per  capita  
2009-­‐2016  
Kilkenny  
Leitrim  
Westmeath  
Roscommon    
Mayo  
Kildare  
Longford  
Laois  
Monaghan  
Average  
Tipperary  
Clare  
Kerry    
Galway      
Waterford  
Limerick  
Wexford  
Donegal  
Offaly  
Cavan  
Cork  
Meath  
Wicklow  
Louth  
Dublin    
Carlow  
€    -­‐      100      200      300      400      500      600      700      800    

Notes: Includes 1) Income Received by Local Authorities for Capital Spending in

Six Budget Service Categories including transport (37%), housing and urban
regeneration programmes (34%) and general purpose grants (16%); 2)
allocations from Transport Infrastructure Ireland for National Roads in each
county. Does not include: 1) One-Off Capital Spending on National Infrastructure
Projects (such as Hospital Buildings and Primary Care Centres) that is difficult to
localise geographically and mainly takes form of availability payments on PPPs.

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 Capital  Spending  by  Central  Gov  in  Local  Authority  
1600
 
 
1400  2009-­‐2016   Dublin Average all LAs Galway Sligo

1200
amount per capita, €

1000

800

600

400

200

0
2009 2010 2011 2012 2013 2014 2015 2016

Notes: As Above. Galway and Sligo shown for comparison.

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The Dublin Region also experienced below average current funding for public
services delivered by Local Government (including water, traffic services, waste,
environment etc.) while Dublin had the fourth lowest social transfers per capita
over the 2009-2016 period.

Average  Annual  Local  Gov  Exp  per  capita,    

2009-­‐2016  
Sligo  
Leitrim  
Kilkenny  
Westmeath  
Longford  
Mayo  
Monaghan  
Donegal  
Limerick  
Roscommon    
Laois  
Waterford  
Tipperary  
Galway      
Kerry    
Clare  
Average  
Kildare  
Dublin    
Carlow  
Offaly  
Cavan  
Cork  
Wexford  
Louth  
Wicklow  
Meath  
€  
 -­‐      200      400      600      800      1,000      1,200    

Notes: Total LG Spending Includes 1) Income Received by Local Authorities from

Central Government for Current + Capital Expenditure across six Budget Service
Categories (Source: DHPCLG); 2) TII Spending on National Roads (Source: TII); 3 Does
not include: 1) One-Off Capital Spending on National Infrastructure Projects 2) Full costs
of social services provision (e.g. Education and Health) funded directly via Department
Voted Expenditure (however a good deal of the geographically localised element of
public services is captured by public service wages).

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Despite having the highest housing needs in the country (proportionally the
highest social housing waiting lists and numbers in need of social housing
supports, such as HAP or Rent Supplement), the four Dublin LAs received the
one of the lowest capital spends on housing.

Total  Housing  Capital  Investment  per  capita    

2009-­‐2016  (€)  
Roscommon    

Westmeath  
Monaghan  

Waterford  
Tipperary  

Longford  
Wexford  
Wicklow  
Galway      

Kilkenny  
Limerick  
Donegal  

Average  
Dublin    

Leitrim  
Carlow  
Kildare  
Meath  
Cavan  

Offaly  

Kerry    
Louth  

Mayo  

Clare  
Laois  
Sligo  

Cork  
700   1400  

600   1200  

total  investmet,  millions  €  

per  capita  investment,  €  

500   1000  

400   800  

300   600  

200   400  

100   200  

0   0  

Total  Housing  Capital  Investment  2009-­‐2016  (€,  millions)  

Total  Housing  Capital  Investment  per  capita  2009-­‐2016  (€)  

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In terms of total expenditure, Dublin received average level of allocations/
spending per capita by Central Government. This includes all Local Government
Funding, a large portion of infrastrucutre investment (e.g. National Roads),
spending on Public Sector Pay and spending on social transfers. Overall this
accounts for 77% of total voted exechequer expenditure.

Average  Total  Spending  per  annum  by  Central  Government  by  County,  
 14,000    
   2009-­‐2016  

 12,000    

 10,000    

 8,000    

 6,000    

 4,000    

 2,000    

 -­‐        

Average  Total  Spending  2009-­‐16,  per  capita   Average  Total  Spending  2009-­‐16,  millions  

Notes: Total Spending by CG Includes 1) Income Received by Local Authorities from

Central Government for Current + Capital Expenditure across six Budget Service
Categories (Source: DHPCLG); 2) TII Spending on National Roads (Source: TII); 3) HH &
Individual Social Transfers (source: CSO); 4) an estimate of spending by Central
Government on All Public Sector and Civil Service Wages in Each County (source: Own
Analysis, DPER). Does not include: 1) One-Off Capital Spending on National
Infrastructure Projects 2) Full costs of social services provision (e.g. Education and
Health) funded directly via Department Voted Expenditure (however a good deal of the
geographically localised element of public services is captured by public service wages).
Overall accounts for 77% of Voted Exechequer Expenditure. See Methodology Below.

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Dubliners pay by far the highest levels of personal and household taxes per
capita (€15,000 vs. average of €4,000 per annum). In terms of total individual
and household taxes (personal, product, household) the average Dubliner pays
over 3 times the average per capita tax nationwide, however the average
household income is only 28% higher than the national average, which does not
factor into consideration costs of living in Dublin.

Revenue  Collected  by  County,  2016  

18000 60%

16000 Personal + Household Taxes, € per capita

50%
% of Total Revenue Collected in County
14000

12000 40%

10000
30%
8000

6000 20%

4000
10%
2000

0 0%
Dublin
Westmeath
Cork
Kildare
Kerry
Clare
Galway
Leitrim
Offaly
average
Limerick

Meath
Kilkenny
Waterford
Louth
Cavan
Carlow
Mayo
Monaghan
Wexford
Sligo
Tipperary
Longford
Roscommon
Donegal
Wicklow

Note: Left-Axis displays personal and household taxation collected per capita in each
county. Personal Taxation includes receipts from VAT plus employee & employer PAYE,
USI and PRSI (source: Revenue); Household Taxation includes Local Property Tax
(source: Revenue) plus Motor Tax Receipts (source: Department of Housing). Right-Axis
displays Total Revenue collected by county including receipts from all product, business,
personal and household taxes (source: Revenue)

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 Methodology and Data Sources
‘Spending’ does not include all spending by Central Government in an area, but
is estimated using the following method.

Overall our analysis accounts for 77% of annual voted exechequer expenditure.

1. Local Government Funding: all income received by each local authority

across the six budget categories. This is parsed into current and capital
income/ expenditure.

This includes large items accounting for significant portion of voted

expenditure such as Regional and Local Roads Expenditure and All Capital
Housing Expenditure (see explanation below).

This data is from the annual Local Authority Budget publication from
Department of Housing, Planning, Community and Local Government.

2. National Roads: a major element of geographically localised expenditure is

that spent by Transport Infrastructure Ireland. We received these from
TII.
3. Social Welfare: social transfers, social benefits and other current transfers
(euro million) 2000-2014.

Mostly from voted expenditure of the Department of Social Protection

(Source: CSO Regional Income).

4. Public Sector Wages: we attributed the public sector wage bill to each
region and county using the following method:

a) Total Public Sector Workers (CSO, Earnings Hours and Employment Costs
Survey, 2008-2017)
b) Total Public Sector Wage Bill (DEPR, 2009-2016)
c) % Regional Employment (Located) in County (CSO, Census 2016, Profile 6
Commuting Patterns)
d) ‘Public Sector’ Employment (Resident) in NUTS 2 Region (Source QNHS
1998-Q3 2017)
e) This is the number of people employed in 3 NACE Rev 2 Economic
Sectors: Public Administration & Defence, Education & Human Health and
Social Work Activities
f) While the number of people employed in these categories is more than the
number of persons employed in the public sector (Incl. Semi-States but

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 does this incl. LOCAL AUTHORITES) this is only used to get the percentage
of public sector employees living in each region
g) % Public Sector Employment by Region (NACE) (Source QNHS 1998-Q3
2017) i.e. 10% of Public Sector Employees Located in Border Region, 30%
in Dublin
h) Estimated Public Sector Employment in County = (1 * 5) = Number of
National Public Sector Workers Attributed to Region * % Regional
Employment Located in County
i) % National Public Sector Employment Located in County
j) Amount of National Public Sector Wage Bill Attributed to County (Millions)
= Public Sector Wage Bill * % National Public Sector Employment Located
in County

Breakdown Local Government

Spending
Local authorities receive a substantial part of their annual funding from a
range of central government departments and agencies.

In 2014, funding to local authorities from central government sources

totalled €1.7 billion, which represents a decrease of 28% on 2013.

60% of this total originated as Exchequer funding.

The balance was provided through the Local Government Fund and the
Environment Fund both of which are administered by the Department of
the Environment, Community and Local Government (the Department

1. Government Grant/ Subsidies from CG – The Local Government

Fund provides funding to local authorities mainly for their day to day
activities (‘general purpose’ grants) and for the upkeep of regional and
local roads.

2. Funding for Provision of Goods and Services from CG-

Breaks down into Current and Capital across 6 programme

categories

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In 2014, 87% of the total funding provision from central government to
local authorities was accounted for by three categories. Those were
transport (37%), housing and urban regeneration programmes (34%)
and general purpose grants (16%).

I. Transport – This isn’t all recorded in LA Budget Accounts

It includes DTTAs direct funding for L&R and some maintenance of NR as

then payments to LAs that act as agent for TII for NR construction

National Roads: Improvement and maintenance of national roads is the

responsibility of the National Roads Authority, operating under the aegis
of the Department of Transport, Tourism and Sport. The National Roads
Authority normally uses local authorities as its agents to deliver the
projects, and channels expenditure through them.

R&L: The Department of Transport, Tourism and Sport receives an

allocation for the upkeep of regional and local roads from the Local
Government Fund.

It provides funding to local authorities using the National Roads

Authority’s payment system.

Public / Sustainable Transport: The National Transport Authority, also

operating under the aegis of the Department of Transport, Tourism and
Sport, funds local authorities for improvements in the public transport
system. Funding objectives include increased accessibility for older
people, improved traffic flows, more routes for cyclists and pedestrians
and better access for buses and taxis.

II. Housing – Part Current, Part Capital, All from Department of

Housing

The bulk of funding for housing and urban regeneration is provided

directly to local authorities by the Department from voted funds.

Capital = LA Income for Building, Maintenance/Improvement of

LA Housing Units including channelled to AHBs

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III. General Purpose Grants – Mostly Current Expenditure

Funding is provided to local authorities from the Local Government Fund

to assist them bridge the gap between their other income sources and the
cost of the services they provide, including their own administration costs.

IV. Environmental Initiatives (all current, voted expenditure Dept.

Housing mostly + others e.g. Heritage)

V. Education and Employment Services (Vote Exp from DES – all

current & might be best to exclude as HE Grants & Superannuation
for VECs was channelled thr. LAs until 2014)

VII. Recreation and Other Local Services (from Voted Expenditure

of Multiple Departments)

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Breakdown Taxation by County
TAXATION = PERSONAL + PRODUCT + BUSINESS + HOUSEHOLD TAXES

1. Personal & Product Taxes by county

vat_internal

paye_income_tax_and_usc

self_employed_income_tax

(Source: Revenue Net Receipts 2011 to 2017)

2. Business Taxes by county

corporation_tax_

capital_gains_tax

=TOTAL PERSONAL, PRODUCT & BUSINESS TAXATION

(Source: Revenue Net Receipts 2011 to 2017)

3. Households Taxes (LPT, Motor Tax) by county

Motor Tax (Source: Department of Housing) 2011-2017

LPT (Source: Revenue)

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