Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I thank the Chairman and members 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. The Exchequer capital plan has, by necessity, been reduced in recent years to contribute to fiscal consolidation. However, it is important to note that since the publication of the 2012-16 capital framework no further cuts have been made to the capital programme. The overall capital budget for 2014 is €3.3 billion and is focused on the sectors prioritised in the 2011 capital review, namely, health, education and jobs.

Through the use of proceeds from the sale of State assets and the recovering public private partnership market, the Government is progressing additional projects which were not included in the original five-year framework. The Exchequer capital programme will be augmented by a €2.25 billion infrastructure stimulus package announced by the Minister for Public Expenditure and Reform, Deputy Brendan Howlin in July 2012. While the main emphasis of the package will be on a €1.5 billion public private partnership programme, €850 million from the proceeds of the sale of State assets and the national lottery licence will also be invested through the Exchequer in other growth enhancing projects.

In June 2013, as a follow-on from the 2012 package, the Minister for Public Expenditure and Reform, Deputy Howlin announced an additional Exchequer investment of €150 million to fund school development projects, local and regional road maintenance and retrofitting of local authority homes. In budget 2014, the Minister announced that €200 million from the proceeds of the national lottery licence transaction will be used for capital projects and programmes in 2014.

The Department of Public Expenditure and Reform will undertake a review of the public capital programme in 2014 which will culminate in the setting of the Government's capital investment framework for the period ahead. This will be done in parallel with the comprehensive review of current expenditure. Alongside setting a new capital investment framework, the review will also examine the scope for the utilisation of other non-traditional funding sources to augment investment in employment intensive projects that can help promote economic growth.

The ministerial order before the committee is a technical instrument. Its purpose is to allow the Dáil to approve formally the expenditure by Departments and agencies in the current financial year of capital moneys carried over from the previous 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 a portion of 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.

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 by Departments in the following year. The multi-annual capital system has given greater medium term financial security to Department 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 the full capital allocations were spent before the end of the calendar year.

The Exchequer and Audit Departments Act 1866 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 the capital by Vote, by deferring the surrender requirement, subject to certain conditions. Among those conditions are that the amounts of capital carryover 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 carryover 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 within a Vote does not have to be spent on the same subhead or programmes where the savings 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 has been replaced with a modern, multiannual framework. The new framework allows for full transparency about the allocations available to each Department over the coming three-year period. It has opened the way for structural, medium-term planning and prioritisation within each area, across all programmes, with full public input and parliamentary oversight. It also makes it easier to assess what exactly Departments have achieved, and what they are aiming to achieve, with the public funds that are granted to them by the Dáil. It is not enough to know how much Departments are looking to spend. We need to know, and the public needs to know, what exactly is being delivered for that expenditure.

The Government is determined that every area of 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 2014 draft order sets out the subheads or programmes under which Departments and agencies propose to spend in 2014 the capital carryover amounts specified by Vote in the 2013 Appropriation Act. The total amount proposed in the draft order for 2014 is €132.596 million, which amounts to 3.9% of the 2013 forecast outturn. The total 2014 gross Exchequer capital provision allocated in budget 2014 amounts to €3.339 billion. The capital carryover of €132.596 million will bring the total Exchequer capital available for spending in 2014 to €3.472 billion.

The main priority areas for spending of the capital carryover of €132.596 million are as follows. The Department of the Environment, Community and Local Government is allocating €72 million in total: €50 million to support the quality of life measures under the Leader axes of the Rural Development Programme 2007-2013; €15 million for local authority housing provision; and €7 million to support the continued implementation of the mortgage to rent scheme. The Department of Jobs, Enterprise and Innovation is allocating €23 million in total: €17 million for the science and technology development programme; €3 million to Enterprise Ireland for grants to client companies; and €3 million to the IDA to help it to meet its extended remit. Also, €16.8 million will be spent by Department of Agriculture, Food and the Marine on afforestation premia as well as funding new forest planting. The Department of Communications, Energy and Natural Resources will spend €8.5 million to provide continued funding for the better energy programme. The Department of Transport, Tourism and Sport will spend €4.8 million on the maritime transport area, in particular on harbour improvement works. The Department of Children and Youth Affairs will allocate €2.576 million for continued works on the Oberstown project which the Minister, Deputy Fitzgerald, announced late last year. The Prison Service will allocate €2.4 million on the new Cork Prison and other capital building works. A total of €2.52 million will be spent by the Departments of Social Protection, Defence and Foreign Affairs and Trade on the roll-out of the new Intreo offices, Defence Forces building and the upgrading of ICT equipment regarding the Passport Service.

Departments and agencies have delegated responsibility to manage their capital programmes and projects within the terms of the delegated capital sanction as set down by the Department of Public Expenditure and Reform. The availability of these capital carryover amounts in 2014 will assist them within this framework in tackling economic and social infrastructural priorities in their areas.

I commend the order to the select sub-committee and thank members for their attention.