Paschal Donohoe (Dublin Central, Fine Gael)
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As Minister for Public Expenditure, NDP Delivery and Reform, I am responsible for setting the overall capital allocations across Departments and for monitoring monthly expenditure at Departmental level. The responsibility for the management and delivery of individual investment projects, within the allocations agreed under the National Development Plan (NDP), rests with the individual sponsoring Department in each case.

The Government has committed €165 billion funding for capital investment, as set out in the NDP published in October 2021. This expenditure was considered and agreed in order to support those sectors that would be key in delivering the ten National Strategic Outcomes (NSOs) identified in the National Planning Framework (NPF). Additional capital expenditure of €250 million is being made available for 2024 from windfall exchequer receipts, with a further €2 billion being made available across 2025 (€750 million) and 2026 (€1.25 billion). This allocation is in addition to the committed €165 billion in capital investment through the National Development Plan (NDP), published in 2021.

Census 2022 recorded over 5.1 million people living in the State as of April 2022 which was an increase of 8 percent on April 2016. The Department of Housing, Local Government and Heritage is currently reviewing the National Planning Framework (NPF). The current timeline envisages publishing the draft revision and accompanying technical assessments for public consultation in June 2024. Following the public consultation, a review and consideration of submissions will take place in August which may see amendments to the draft revision. Subject to Government approval, the finalised document will be published in Q3 2024.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 143, 144 and 148 together.

My Department continues to review budgetary process and expenditure monitoring to ensure we are adequately tracking developments and utilising best practice methods to assess the impact of public expenditure investment. These processes complement the monitoring of drawdown of funds from the Exchequer reported each month against expenditure profiles in the Fiscal Monitor published by the Department of Finance.

Some of these initiatives include:

• Performance Budgeting;
• Equality Budgeting;
• Green Budgeting;
• Well-being framework; and
• The Spending Review Process.

Together, these reforms are also in place to broaden the approach to how public expenditure is appraised, implemented and reviewed. They govern not only how and where the money is spent but also the impact of public expenditure across different cohorts of society and the different categories of expenditure. They work in tandem with broader initiatives, such as the establishment of the Irish Government Economic and Evaluation Service (IGEES), to develop capacity and enhance the role of economics and value for money analysis in public policy making.

In respect of enhancing efficiency and effectiveness of policy delivery, improving and supporting the evaluation capacity within Government Departments has formed an important part of the reform programme. Supported by the establishment of IGEES, this has led to the development of a number of additional processes and reports to support the budgetary framework. This includes the spending review process, managed by my Department, which seeks to assess the effectiveness of public expenditure in meeting policy objectives and fostering engagement. Over 160 papers published since introduction in 2017.

The current framework for public service transformation is contained within Better Public Services, which builds on earlier reforms by my Department. The core of the Strategy is made up of three themes;

1. Digital innovation at scale,
2. Workforce and organisation of the future; and
3. Evidence informed policies and services designed for and with the public.

Making progress under these themes will support sectoral level reform programmes already underway in the Public Service and build on recent successes in the area of innovation across the Public Service.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government’s approach to public expenditure policy is set out in the Medium Term Expenditure Strategy (MTES). The objectives of the MTES are twofold, to ensure that the level of core expenditure growth is sustainable long-term and that investment in expenditure protects and delivers improvements to public services. This framework must be responsive to the economic landscape and is reviewed annually as part of the whole of year budget process including the Summer Economic Statement and the Estimates process.

In recent years the Government’s public expenditure policy has allowed for a proactive and balanced approach to fiscal policy while also being flexible in addressing economic trends and unforeseen events such as the Cost of Living Crisis driven by heightened inflation.

A dual pronged approach was taken by the Government where non-core expenditure, ostensibly temporary in nature, was used as part of the response to key economic and social challenges while the core expenditure continued to be assessed in terms of changes to existing levels of service and particular demands within each Department.

This approach of separating core and non-core expenditure enabled the Government to:

• Ensure adequate provision of supports while protecting core day-to-day expenditure and investment;

• Provide transparency on the costs of the challenges;

• Facilitate withdrawal of supports when no longer required by ensuring it does not become embedded in core permanent expenditure.

This has been largely successful, with non-core spending reducing year-on-year since the start of the pandemic. Non-core expenditure has reduced from some €15 billion at the height of the pandemic to a provision of just over €5 billion this year, including the final tranche of benefits from the Cost of Living package in the Budget 2024.

Harmonised Index of Consumer Prices (HICP) is a measure inflation in the Eurozone. The Draft Stability Programme Update, published last week forecasts a decline in the HICP from 2023 and out to the medium term (2.1 per cent in 2024 and 2025, and 2.0 per cent in 2026 and 2027).

Along with the Minister for Finance, I continue to monitor macroeconomic and expenditure developments throughout the year.