Charles Flanagan (Laois, Fine Gael) | Oireachtas source

I will start by congratulating you on your recent appointment as Chairman of this committee and I also congratulate the members of the reconfigured committee for the Thirty-second Dáil. I look forward to engaging with the committee not only today but in future months and, dare I say, years.

Under the programme for a partnership Government, this Government is committed to reform of the budgetary process, including pre-budget consideration, better scrutiny of Revised Estimates and better evaluation of programmes. We, in government, look forward to having the valuable input of the committee in this process as it develops.

I will briefly refer to Vote 28, which I will deal with as it relates to the Department of Foreign Affairs and Trade, and my colleague the Minister of State, Deputy Joe McHugh, will then address the committee on Vote 27, international co-operation.

As you are aware, Chairman, Vote 28 funds the operation of the Department of Foreign Affairs and Trade and its network of 81 missions, excluding African missions and Vietnam, which come under Vote 27, Ireland's contributions to international organisations such as the UN budget, UN peacekeeping operations, the OECD, the OSCE, and the Council of Europe, among others, and a number of smaller programmes such as the emigrant support programme, the peace and reconciliation fund and other funding programmes in areas such as culture, education and trade promotion.

Members will have seen the advance briefing provided by my Department which summarises the main activities and priorities under each strategic programme and which includes actual expenditure under each programme to the end of May 2016. For 2016, the committee will be aware that the overall gross estimate for the foreign affairs and trade group of Votes, Votes 27 and 28, is €698 million compared with €686 million in 2015, an overall increase of €12 million or 1.6%. A total of €10 million of the total increase represents an increase in the international co-operation Vote, Vote 27, with the balance of €2 million on Vote 28, which is earmarked in particular for the passport reform programme. The gross budget for Vote 28 has increased to €212 million from €210 million in 2015. A total of 71% or €150 million of the Vote 28 allocation is for administrative costs with the balance of 29%, or €62 million, allocated to programme subheads.

I believe that represents good value for money. The overall trend in recent years has been one of significant reduction in the Department's administration budget which is down by 22% or €43 million in 2016 compared with 2008. Most of that is accounted for by administrative savings on salaries and on the cost of maintaining our diplomatic network. Our mission network serves our citizens, our businesses and our Government well. It is a small one by international standards and by comparison with like-sized countries and our missions are small. A total of 15% of our 80 missions are staffed by one diplomat while 40% are staffed by two diplomats with support from local staff. Denmark, with a similar population, has 108 missions in its diplomatic network. Finland's foreign Ministry employs more than 2,600 staff at home and abroad compared to a total of just under 1,500 in Ireland's case.

The programme structure for Vote 28 is somewhat different from the situation in 2015.

The current structure is based on the Department's statement of strategy for the period 2015 to 2017 which is rooted in the recent foreign policy review document, The Global Island: Ireland's Foreign Policy for a Changing World. The latter sets out the Department's work in five priority areas: supporting our people; promoting our values; advancing our prosperity; engaging actively in the European Union; and strengthening our influence. These correspond directly with the longer-worded descriptions for programmes A to E in the published Revised Estimates Volume.

We are nearly halfway through the year already. In the course of my remarks this morning on the individual programmes, I will seek to address some of the work under way in each of the areas, how expenditure is going so far this year and the factors and pressures likely to impact on the Department's performance across the programmes in 2016.

The Department is experiencing a number of cost and exchange rate pressures mainly driven by our global presence. In particular the weak euro, while a major advantage to exporters, is adding significant costs to operating in key markets and engaging with strategic partners. It is estimated that in 2015 currency exchange rates cost the Department almost €10 million extra in euro terms. In addition, the recovering economies around the world have increased local costs driven by rising inflation and local market conditions. My Department is also incurring increased security costs at overseas missions as we seek to ensure the safety of staff and visitors to our premises - both Irish citizens and others - following the various terror attacks across the globe.

With the Chairman's agreement, I now propose to make some short introductory comments on programme A, and to open out the discussion and invite comments or questions from members. Once we complete our discussion on the programme, I will then take each of the subsequent programmes in sequence.