Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank the Chairman and committee for having me here today. In budget 2015, the Minister for Public Expenditure and Reform set out a programme of Exchequer capital investment of €11 billion out to 2017. This significant level of investment will address critical infrastructure deficits, aid economic growth and job creation and provide much needed social infrastructure. It is the first time the Government has been in a position to increase the budget for the public capital programme. While this increase is most welcome, our resources continue to be constrained and that is why the Government has focused those resources that are available on areas of greatest need.

In 2015, we will be spending €3.6 billion. The majority of this is focused on social housing, transport, education, health and enterprise supports. Housing was a particular priority area for the Government in budget 2015 given the recent difficulties in the housing market and the knock-on effects for the families and individuals who rely on Exchequer housing supports. For this reason, a total of €1.3 billion in Exchequer funding will be provided over the next three years to support the Government's housing programme. In addition, there will be private financing through a social housing public private partnership, PPP, of €300 million and €400 million will be provided to the approved housing bodies by way of an off-balance sheet financial vehicle.

The Minister for Public Expenditure and Reform has sought to supplement the capital budget where possible over recent years. We have reinvested the moneys we received from the lottery licence transaction and the asset disposals programme. This helped to provide much needed infrastructure throughout the country and sustain construction sector jobs at a time when there was very little private sector construction activity. The types of projects supported through this additional funding included road maintenance and repair, the redevelopment of Páirc Uí Chaoimh, commemoration projects, pyrite remediation, cycling greenways, a rural public transport initiative, and the upfront Exchequer costs associated with the new PPP programme.

The continued roll-out of some of the stimulus projects which received funding in 2014 is being facilitated through the carryover order which is before the committee today. As part of the ongoing reforms of how we prepare for and plan our budgets, the Department of Public Expenditure and Reform undertook a review of the public capital programme last year. The decisions made by the Government in relation to the ceilings out to 2017 were based on the review. The report on the review is being finalised and, when published, will include the full multi-annual capital envelope from 2015 to 2020.

The ministerial order that is before the committee today 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 a decade ago. 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 myriad 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. This type of approach to managing infrastructure projects makes sense and has been very successful. It helps to ensure better project management and to avoid uncertainty in project delivery. The multi-annual system also gives more certainty to contractors that they will be paid for the work they do. It has also helped to improve value for money and eliminate the potential for wasteful spending on non-essential works to ensure that full capital allocations are spent before the end of the year.

As I said, this is a technical exercise. 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. However, section 91 of the Finance Act 2004, which gives legal effect to capital carryover, allows the carryover of unspent voted Exchequer capital to the following year of up to 10% of capital by Vote, by deferring this surrender requirement, subject to certain conditions. Among these 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 decisions 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 order we are discussing today sets out where Departments and agencies propose to spend the capital carryover amounts specified by Vote in the 2014 Appropriation Act. The total amount proposed in the draft order for 2015 is just over €79 million or 2.2% of the 2014 provisional outturn. The total 2015 gross Exchequer capital provision allocated in budget 2015 amounts to €3.6 billion. The capital carryover of €79 million will bring the total Exchequer capital available for spending in 2015 to just under €3.7 billion.

The €79 million will be spent as follows. The Department of Transport, Tourism and Sport will spend €24 million on stimulus related projects and programmes, including the sports capital programme, the development of an indoor arena at the National Sports Campus and the delivery of discovery points, lay-bys and other related infrastructure along the Wild Atlantic Way driving route. A further €3.7 million will be allocated to the provision and renovation of swimming pools and just over €1 million to meet commitments under the Irish Coast Guard capital programme, including work on the new Greystones Coast Guard station.

The Department of Jobs, Enterprise and Innovation will allocate €20 million in total. Some €9 million will be allocated to the science and technology development programme, €6 million to Enterprise Ireland to fund ongoing capital commitments and increased demand spanning various grant supports as well as a growth in investment activity, and €5 million to the IDA to help it to meet its 2015 remit.

The Department of Agriculture, Food and the Marine will spend €18 million on afforestation premia as well as funding new forest planting. The Department of Arts, Heritage and the Gaeltacht will allocate €1.1 million towards the cost of a number of Government approved commemorative projects, including the GPO interpretative exhibition centre. A further €1 million will be allocated to meet anticipated demands from Cork City Council in respect of the Cork event centre and €3.8 million will assist the Department to meet obligations arising from the EU habitats and birds directives. The Department of Communications, Energy and Natural Resources will allocate €4.6 million and just over €1 million will be spent by the shared services Vote and the Office of Government Procurement on office equipment and ICT required for the set-up of these services. 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 2015 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.