The focus on job creation in the £40.6 billion (€52 billion) National Development Plan has been questioned in a report on the project's viability.

It says the €6.5 billion (£5.1 billion) investment for the productive sector over the next six years is not "fully warranted" and also queries the effectiveness of grants in influencing where new plants set up.

The report, prepared by the CSF Evaluation unit on behalf of the Department of Finance and the EU, says the rapid reduction in unemployment calls into question the need to subsidise job creation.

Often, "the value to society of an additional job is minimal", it says, and in some locations the value of an additional job may actually be negative as additional employment may cause congestion problems, which implies a cost on others.

The Department of Finance asked for the evaluation as a supplement to the report commissioned from the Economic and Social Research Institute last year. The CSF unit is an independent unit in the Department set up by the EU and the Department. One of its tasks is to advise national authorities and the Commission on evaluating projects assisted by structural funds.

The Department last night rejected criticism of the plan's job creation strategy. A spokeswoman said the plan's human resources element "had been thoroughly looked at and a great deal of resources had been directed towards satisfying both indigenous and foreign investment employment requirements".

The report concludes that the broad balance of investment in the plan is appropriate to the economy's needs, "subject to the caveat that we are not convinced the increase in resources to the productive sector is warranted". It says the skills shortages in the economy "are now so widespread that the problem is better understood as a labour shortage".

The report says the market failures which justified investment in the productive sector are no longer valid in most cases. The sector includes investment in indigenous and foreign-owned firms - including grants from IDA Ireland and Enterprise Ireland - marketing, tourism, fisheries and research and development.

Although the report accepts there are valid reasons for investing in areas such as the Border, midlands and western regions, it says "in general we feel that the implications of the major changes in the economic environment have not been taken on board".

It questions the focus on job creation given that the economy is nearing full employment. "Our overall conclusion is that we are not convinced that the overall level of investment proposed for the productive sector is warranted," say the report's authors.

They also query training measures, saying any benefits "accrue either to the employees and/or the firms concerned" and should be reflected in increased wages or profits.

"At some stage - such as at present when the economic environment facing the sector is favourable and profitability is very high - the State can withdraw from this type of activity," it says.

The authors say the finance measure envisages continued support for seed and venture capital, alongside the continuation of capital and employment grants. "In summary we would question the level of resources allocated to this area, given the much improved external environment facing the indigenous sector and the absence of a convincing market failure basis for the investments proposed," it says.

Other areas which the report targets include the amount earmarked for tourism marketing - it says the amount proposed is very high and the existing level of visitor numbers is clearly giving rise to congestion in some popular destinations, and that industry sector is also facing labour supply shortages.

Although the report does not make recommendations on financial allocations - in line with its brief - it does question the amount which will be spent on infrastructure over the next six years. The plan provides for €1.35 billion a year in this area and the report says most of this will be reflected in increased demand for construction output.

It says it is clear this sector is already running into labour supply problems. "We feel the supply constraints facing the economy (and the construction sector in particular) could frustrate the implementation of the plan, unless tackled through appropriate policies," it says.