Brendan Howlin (Wexford, Labour) | Oireachtas source

I thank the Chairman and the committee for the opportunity.

The five-year Exchequer capital framework published in November 2011 sets out a programme of Exchequer capital investment of €17 billion between its initiation and 2016. This significant level of investment will address critical infrastructure deficits, aid economic growth and job creation and provide much-needed social infrastructure. Being conscious of the significant contribution capital savings have made to fiscal consolidation in recent years, I was determined that the capital allocation for 2013 would be maintained and would not be subject to further cuts when framing this year's budget. The overall capital budget for 2013 is €3.4 billion and is focussed on the sectors prioritised in the 2011 capital review, namely, health, education and jobs.

In July 2012, I announced a new Government stimulus initiative amounting to a package of €2.25 billion aimed at leveraging funding to support a new public private partnership programme of projects in key areas of infrastructure. Work on the initiative is being advanced by officials of my Department along with colleagues in the Department of Finance, the National Development Finance Agency and the relevant line Departments.

The ministerial order before the committee is a technical instrument. Its purpose is to allow the Dáil to formally approve the expenditure by Departments and agencies in the current financial year of capital moneys carried over from last year. The capital carryover facility forms an integral part of the five-year rolling multi-annual capital envelopes introduced in 2004. The multi-annual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. It recognises the difficulties inherent in the planning and profiling of capital expenditure and acknowledges that, for a myriad of reasons, capital projects may be subject to delays. The carryover facility allows for unspent moneys which would have been lost to the capital programmes and projects concerned, under the annual system of allocating capital, to be made available for spending on programme priorities in the subsequent year. We are all familiar with cases where people have capital to spend and rather than surrender it the moneys were spent on things that were not priorities so it is important that normal planning would apply.

The introduction of the multi-annual capital investment system has been a major positive factor in the roll-out of the capital programme. It will ensure that resources that would otherwise have been surrendered to the Exchequer are now available for spending in Departments in the following years. The multi-annual capital system has also given greater medium term financial security to Departments and implementing agencies. This in turn has facilitated better medium term planning of programmes and projects. It has also helped to eliminate the potential for wasteful spending on non-essential works in order to ensure that full capital allocations were used up.

I am sure that we are all familiar with the Exchequer and Audit Departments Act 1866. The legislation generally requires the surrender of unspent Exchequer moneys to the Central Fund at the end of each financial year. Section 91 of the Finance Act 2004 gives legal effect to capital carryover and allows the carryover of unspent voted Exchequer capital to the following year of up to 10% of capital by Vote, by deferring the surrender requirement, subject to certain conditions. Among those conditions are that the amounts of capital carried over by Vote be specified in the annual Appropriation Act of the year from which the carryover is proposed. The actual decision in principle on the amounts of carryover by Vote are therefore determined in the Appropriation Act. The Dáil again has the opportunity to endorse the amounts in its decision on the revised Estimates volume which shows the capital carry over amounts separately in the relevant Votes.

The carryover amounts provided for in the Appropriation Act are required to be confirmed in an order to be made by the Minister for Public Expenditure and Reform by 31 March of the following year, after approval of the order by the Dáil, to allow expenditure to take place. The order sets out the amounts by subhead consistent with the amount by Vote specified in the Appropriation Act. Capital carryover in a Vote does not have to be spent on the same subhead or programme where the saving occurred. It may be spent on a different programme depending on progress and priorities.

The committee will be aware that the old annual Estimates process is being replaced with a modern, multi-annual framework. The new framework will allow for full transparency about the allocations available to each Department over the coming three-year period. It will open the way for structural, medium-term planning and prioritisation within each area across all programmes with full public input and parliamentary oversight. It will also make it easier to assess exactly what Departments have achieved, and what they aim to achieve, with the public funds that are granted to them by the Dáil. It is important that the money is used and that we see an outcome for the money.

It is not enough to know how much Departments are spending the money; we want to see the outcomes. The Government is determined that every area of the public service should be accountable for performance and results. This will apply to Ministers and their Departments, as well as to all offices and agencies. The 2013 draft order sets out the subheads or programmes under which Departments and agencies propose to spend in 2013 the capital carryover amounts specified by Vote in the Appropriation Act 2012. The total amount proposed in the draft order for 2013 is €107.237 million, which amounts to 2.8% of the 2012 forecast outturn.

The total 2013 gross Exchequer capital provision allocated in budget 2013 amounts to €3.435 billion. The capital carryover of €107.237 million will bring the total Exchequer capital available for spending in 2013 to €3.542 billion. The main priority areas for spending of the capital carryover of €107.237 million are as follows. The Department of the Environment, Community and Local Government is allocated €43 million in total, with €9 million for the Leader rural development programme to meet demand from local Leader action groups; €12 million to support the continued implementation of the mortgage to rent scheme and to provide support for the voluntary and co-operative housing sector; €10 million for local authority housing provision; €10 million for landfill remediation to meet outstanding deliverables following an ECJ judgment; and €2 million to enhance investment in fire and emergency services.

Some €6 million will be spent by the Department of Agriculture, Food and the Marine on afforestation premia as well as funding new forest planting. The Department of Jobs, Enterprise and Innovation will allocate €11 million to Enterprise Ireland for the innovation fund Ireland and grants to client companies; €7 million through the IDA for research and development grants to industry and €7 million for the science and technology development programme to fund a larger, internationally visible SFI research centres programme with major industry partners.

Some €10.4 million will be spent by the Department of Communications, Energy and Natural Resources to provide continued funding for a better energy programme pending the introduction of the pay as you save model. The Department of Education and Skills is allocating €10 million for the delivery of large scale projects in the primary and post-primary building programme. A further €9 million will be used for the St. Patrick's teacher training college building project and for building projects already under way in UCD.

Some €1.2 million will be allocated by the Department of Arts, Heritage and the Gaeltacht to meet commitments under the EU habitats directive on the preservation of active raised bog habitats. Some €1.05 million will be allocated by the Department of Social Protection for work on office accommodation for the Integrated Employment and Income Support Service, Intreo, and public service card initiatives. A total of €1.587 million will be spent by the Department of Defence, the Department of Justice and Equality and the Department of Foreign Affairs and Trade on buildings, the State pathology lab and the upgrading of ICT equipment for the Passport Office.

Departments and agencies have delegated responsibility to manage their capital programmes and projects within the terms of the delegated capital sanction as set down my Department. The availability of these capital carryover amounts in 2013 will assist them within this framework in tackling economic and social infrastructural priorities in their areas. I commend the order to the sub-committee.