Joan Burton (Dublin West, Labour) | Oireachtas source

I thank the Oireachtas joint committee for its invitation to appear before it to consider the budget and Estimates process for 2014. As the Chairman said, I recently appeared before the select committee to discuss the Revised Estimates for 2013. While we look forward to next year, it is important to outline some of the issues that I highlighted at the select committee meeting. I want to provide the information for the larger joint committee because the issues dealt with continue to be relevant next year. I shall then move on to discuss the budget.

The 2013 expenditure report was published last December. It provided for additional new expenditure reduction measures of €440 million in 2014 and an expenditure ceiling of €19.633 billion. Reducing overall expenditure in 2014 and beyond, as required, while protecting the most vulnerable in society, will be extremely difficult. A critical analysis of social welfare policy and expenditure will be required and the committee's input in this regard will be valuable in informing the budgetary process. My officials have provided members with briefing material that I hope will prove helpful. I will quickly go through how we intend to approach the expenditure ceiling for 2014. We must bear in mind that it seeks an outcome of €19.6 billion and new expenditure reduction measures of €440 million.

Since becoming Minister, I have overseen a programme of policy and organisational change unprecedented in the history of the Department. The key priorities for 2014 are outlined in sections 13 to 20, inclusive, of the briefing document. As part of the process, the Department has successfully completed one of the most significant mergers in the history of the public service, while at the same time reducing expenditure and meeting increased demand for benefits. The merger involved the transfer of more than 1,700 posts and a variety of schemes and services from other Departments to the Department of Social Protection. The Department has smoothly implemented the transfer, while dealing with the three fundamental forces transforming its operations, including reduced budgets and greater demand for schemes arising from the economic crisis, the demographics of the Irish population, and moving from the passive benefits provider of old to a public employment service that is actively assisting people to get back to work, training or education. The reality of demographic change that is increasing the Department’s spending on older people year on year is such that in 2013 I have had to make provision for an additional €190 million for the increasing number of pensioners. This was provided for in the Estimate for the year and I have had to do this each year I have been Minister. Therefore, my Department has risen to the challenge of implementing unprecedented structural reform, while contributing, as it must, to the necessary consolidation of the public finances and, most importantly, offering a safety net and now a springboard to those who need it.

The service traditionally provided by my Department in providing income supports will continue. However, one of my priorities since becoming Minister has been to transform the Department from the passive benefits provider of old to one that is actively assisting jobseekers to return to work, including engagement with employers to help them to get the employees they need. We launched Intreo in the Sligo office and there are now 12 offices up and running. With the help of the OPW, we hope to have 30 before the end of the year. We must get the space, privacy, interview rooms, group engagement and meeting rooms in order that we can give people a positive employment service to help them to get to where they want to get. As part of the Pathways to Work strategy, my Department will spend over €1 billion on work, training and education places that will benefit approximately 85,000 people. Over 25,000 are participating in back to education courses, of which details are supplied in the briefing pack.

The crucial need for the Pathways to Work strategy is highlighted by ESRI research on jobless households, which shows that at the height of the boom between 2004 and 2007 the share of households defined as jobless increased by double digit figures to reach 15%. By stark contrast, the average across the eurozone in 2007 was just below 10%. That this was allowed to happen during a period of such prosperity is the single most shocking aspect. The Government has a greater ambition for citizens who are unfortunate enough to be unemployed. It views each and every individual on the live register or otherwise distant from the labour market as an untapped resource and a future employee who will participate in the rebuilding of the country. That ambition is the reason we are moving from a passive to an active welfare state.

I have spoken about prioritising efforts to combat social welfare fraud. The vast majority on social welfare are claiming only the entitlement due to them. As such, it is essential that we respect the majority and maintain public confidence in the system by vigorously tackling any fraudulent activity or abuse of the social welfare system. We have begun the phased introduction of the public services card with key security features, including a photograph and signature, which will be used to authenticate the identity of individuals. To date, we have issued over 250,000 cards, particularly to new jobseekers. The new cards will enable individuals to gain access to public services more efficiently and with a minimum of duplication of effort, while preserving their privacy to the maximum extent possible. They will also play a crucial role in eliminating fraud in the social welfare system.

Another significant development in recent months has been the completion of a number of service delivery improvement projects in the Longford office which focused on updating the IT systems and platforms to introduce significant efficiencies and a quicker and more responsive service to our clients in the face of increased claim loads in recent years. I have spoken to the committee about this point. The project was accorded a high priority and involved a significant amount of time and commitment by staff in Longford and Letterkenny. This resulted in a negative impact on claim processing in the short term and a further build-up of backlogs on major schemes. I am now pleased to say that, in the main, the backlogs in scheme areas have been cleared. At one time, there were bags of files on the floor of the Longford offices. We had to put them on computer, an enormous job in physical and IT terms, to get them up to date.

On expenditure levels, it is useful to examine the Department’s expenditure on its various programmes in 2013. The principal headings remain significant. The biggest single block of expenditure is on pensions, which will amount to €6.4 billion, or 32% of overall expenditure this year. The next biggest block is expenditure on working age income supports, including the jobseeker's and one parent family payment, which accounts for 27% of overall expenditure, or €5.5 billion. Expenditure on working age employment supports, including important initiatives for communities affected by high levels of unemployment such as community employment, JobBridge, Tús and various other supports, amount to over €1.056 billion or nearly 5% of the Department’s expenditure. This is one of the few areas in which there was an increase of €102 million over 2012 despite the tight budgets to which I referred. I prioritised the task of giving people the opportunity to participate in work and contribute, particularly in their communities. This is vitally important for communities that have suffered a high level of unemployment.

Expenditure on illness, disability and carers payments will amount to €3.3 billion or nearly 16% of expenditure in 2013. These include illness benefits, carer’s allowance and the domiciliary care allowance for parents whose children have a disability. Payments to carers amount to €776 million. The percentages are higher in Ireland than in most other countries and our payments to carers are unique in European social welfare systems. It is an important support for people caring for those with disabilities.