Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

As I indicated, the underspend was across a number of headings. One such heading was the innovation funds, which have been slower to be drawn down. Some of this arose from the delay after they were put out to tender, as some participants were slower to close off their funds. It is a process in which they must raise matching funds. Enterprise Ireland creates a draw-down profile on the expectation of a certain profile or speed with which they will ramp up. However, they did not meet that pattern and, as a result, this was a significant area of shortfall. Moreover, the Deputy correctly asked whether this was anticipated. I refer to the manner in which Enterprise Ireland must put together its budgets. It must make provision for all the approvals it has made in the past that are planned to mature. As a result, the planned payouts in 2012 comprise approved projects from 2008, 2009 and 2010. It is a mixture of fractions of approvals and as the Deputy can imagine, the approvals for 2007 and 2008 fell sharply. This has been partially due to it being slower in the recession wherein people who had historic approvals actually postponed them and did not go ahead with them. Many such projects require matching funds whereby a company with an approval for a certain amount of money must provide the matching amount and such a company may have postponed it for those reasons. I note it has returned to a more normal spread and the sort of roller-coaster effect in the approval rates now has left the system. This is in part a residue and in part people resiling from commitments they had planned. However, even had one anticipated this development, as they legally were due to fall for payment, this was the reason there had to be provision. It went across the entire range of programmes and was not simply related to research and development, as it also affected employment grants that had been committed, as well as capital and training grants.

Another influencing factor was that back in 2010, ceilings began to be put on the advance commitments that could be made as part of a budgeting process and this also appears to have had an impact. It is quite a complex matter but effectively, Enterprise Ireland is making a forecast of the draw-down of an historic stream of approvals and obviously, there is a series of factors that has led to the underspend.