Limerick Enterprise Development Partnership (LEDP) strongly supports the Limerick Development Plan 2022- 2028 and, in common with many other stakeholder groups, welcomes the opportunity to provide input to the consultation process. LEDP, as a key actor in Limerick City, is particularly encouraged by the by the rhetoric surrounding the LDP consultation process, which is underpinned by a strategic vision intended to guide the sustainable future growth of Limerick.
There has been total market failure in Limerick City Centre since 2000 in relation to private sector Residential, Retail and Commercial property development and refurbishment. The Limerick City Development Plan stated in 2010 that the city centre was at a “Tipping Point”. We are now a decade on with no significant private investment in the city centre since. And whilst launched under a great sense of optimism and genuine intent, it is abundantly clear that schemes such as The Living City Initiative (LCI) in Limerick have not delivered. This particular scheme was designed to assist and encourage people to live in the historic areas such as the Georgian Quarter in Limerick City. Figures released by the Department of Finance in December 2019 showed a total of 19 successful Limerick residential applications out of a nationwide figure of 228. The Living City Initiative has been in place since 2015. A new suite of measures is desperately required to deliver fresh investment in our City to counteract the much publicised ‘doughnut effect’.
The regulation of fiscal and tax policies is an imperative prerequisite for improving regional private capital investment. The development of the regional economy is an objective prerequisite for the comprehensive progress of society and the realisation of a well-off society. Market failures create suboptimal equilibria in the social optimum, which justifies state intervention. And there are undeniable facts that allude to market failure in Limerick City. A key barrier to private investment is the degree of uncertainty. The return on investment in capital investment is uncertain at present and exhibits longer periods of development, so private firms, have no incentive to proceed. A revised public policy is needed to stimulate investment. Fiscal incentives, including tax policies, should be directed at specific barriers, impediments, or synergies, to facilitate the desired level of private capital investment. Therefore, it is of great significance to consider international best practice successful stimuli such as the ‘City Deals’ initiative in the UK. This initiative agrees bespoke packages of funding and decision-making powers negotiated between Central Government and Local Bodies to stimulate private investment. To date, 31 such deals have been completed with Cities throughout the UK since the introduction of the Initiative in 2012. I am also conscious of the Northern Powerhouse Initiative which was established by the UK Government towards achieving Balanced Regional Development for the Northern Cities of Leeds, Liverpool, Manchester, Hull, Sheffield and Newcastle by the creation of an Economic Powerhouse as a counter pole to London. The UK Government has devolved more powers to these cities to enable them achieve their potential and this is something which the Government might implement as part of the policy initiatives being considered for the position of a Democratically Elected Mayor for Limerick in addition to the ‘City Deals’ initiative.
Limerick City & County Council needs to address through strategic reforms four preconditions that investors generally use to assess the suitability and sustainability of investments. These are:
- Fiscal environment: work with central government on how it manages and monitors its spending levels, tax rates, and liabilities with respect to the financing instrument;
- Investment and credit environment: credit ratings needed to attract financing from capital markets, the capacity to plan large capital projects, currency risk, and interest rate volatility;
- Regulation, legal and policy environment: whether a clear legal and regulatory system is in place to authorise and govern subnational borrowing and the effectiveness of the land and property system; and
- Institutional environment: the skills and capacity needed to structure and implement a financing instrument and to avail investment opportunities to the private sector through public-private partnerships, for example, and whether public bodies are effectively coordinated with clear assignment of responsibilities.
These environments should be underpinned by a strong vision and leadership from the City, which will provide an acceptable return level capable of attracting private sector investors. Separately, for every one million euro of construction cost, direct and indirect employment in construction will increase by 12 job years (Department of Public Expenditure and Reform, 2015). In addition, labour costs alone account for approximately 46% of all construction expenditure returning significant immediate taxation to the State in addition to all the other taxation headings including Stamp Duty, Capital Gains, Value Added Tax on Residential Sales and Corporation Taxes. Planning policy in Limerick favours city centre development but prevailing market forces ensure that such policies will never be implemented unless the local authority acknowledges the need to incentivise such developments as I am attempting to highlight in this note.
The post COVID-19 world provides the ideal opportunity to re-generate our City Centres and we must not lose the opportunity so as to support our citizens being able to enjoy living in our towns and cities in line with Government proposals which support Remote Working in particular.
LEDP strongly supports the premise of the Limerick Development Plan 2022- 2028 and makes this submission in a constructive spirit. From our perspective, by driving the development of second tier cities such as Limerick, we can relieve the pressure on Dublin’s infrastructure, and finally deliver on the balanced growth all stakeholders agree is in the best interest of our country. We sincerely hope that our suggestions of a path forward will underline the potential for a more enlightened and brave policy framework to guide a more sustainable development path for Limerick City.
Requirement for a local authority revised public policy to stimulate investment in Limerick City Centre and included in the Limerick Development Plan 2022- 2028.
It is of great significance for Limerick city & County Council to consider international best practice successful stimuli such as the ‘City Deals’ initiative in the UK.