Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I thank the Deputy for his questions. I will begin by responding to his questions on the spending review and I will conclude by answering his question on public service pay.

Regarding the comprehensive spending review and the capital review, the process for each of them will be different. In terms of the comprehensive spending review, we will identify a portion of Government expenditure by Government Department. We anticipate it will be approximately one third of Government expenditure but we will pick that percentage of Government expenditure so that it is consistent with subheadings within that Department's Vote. We will then review that expenditure against a different approach from what my predecessor would have done. When Deputy Howlin was performing this role, he looked for cuts in the context of our being in the troika programme. We have not commenced a process like this since the run-up to, or during, the crisis. The objective of this approach is to examine efficiencies. It will be to examine what objectives are set for an expenditure stream and to see how that expenditure stream delivers against those objectives. It will be a rolling process that we anticipate will cover all of Government expenditure over a three-year period. Any conclusions we have with respect to that third of Government expenditure that we cover in 2018 will be concluded in advance of budget 2018. There will be a different process for the capital review. I want to bring all that to a conclusion this year. In line with the publication of the mid-term expenditure report, we will provide an overview of all current plans - capital expenditure programmes.

We will make an assessment of how much of the existing fiscal space remains unallocated and how much could be allocated for capital expenditure. Even within the current framework we anticipate it will be approximately €2.2 billion up to 2020 or 2021. We will then make a choice in the second half of this year in respect of where that will go.

In parallel, it is my anticipation and hope that the Minister for Housing, Planning, Community and Local Government, Deputy Coveney, will complete his work on the national planning framework. I hope that in the second half of the year his work will inform capital choices that we will make, especially in the area of transport and housing.

Reference was made to the fiscal space and the flexibility or lack thereof in respect of capital expenditure. Under the current framework, assuming no change in our economic circumstances, following the allocation of over €2 billion for housing there still will be between €2 billion and €2.3 billion. This is based on the assumption of no change in our growth forecasts with regard to allocation against new capital choices. That is why I want to bring the capital review to a full conclusion in the second half of this year, unlike the comprehensive spending review, which will be an ongoing process. Then there is the question of flexibility on top of that. Part of our capital review will include a review of the use of public private partnerships and off-balance-sheet activity to see what role they could play in future capital projects. As I have said to the committee previously, I am cautious in that area because I have no wish to make an assessment about a particular project being off-balance-sheet only for it to change in two years' time and for the Minister or Government of the day to have to face tough choices regarding projects to which they have already committed. I expect that in the second half of the year work in that area will be brought to a conclusion. We are using the funding of housing projects as a pathfinder approach to bring to an end some of the debate on the matter in the European Union.

Reference was made to pay policy. I do not accept that this is pay policy on the hoof. If I was sitting before the committee in the second half of this year with the Lansdowne Road agreement disintegrating and sectoral disputes in full flow, the committee would justifiably be asking me why I did not take action at the start of this year to try to give the Government and the State the ability to ensure those things did not happen. That is what I have done. I have concluded negotiations with the public services committee of the Irish Congress of Trade Unions. The conclusion was issued today. It makes the strongest possible commitment to the maintenance of industrial order for the remaining tenure of the Lansdowne Road agreement. That is why I believe this is the right decision. I believe that if we did otherwise not only would we face even more precarious prospects in the second half of this year, but we would either not be able to deliver a replacement to the Lansdowne Road agreement or, if we did negotiate an agreement, it would be dramatically more expensive and potentially unaffordable to the State. That is why I have put this framework in place.

There was a question about identifying the funding to pay for it and reference was made to the work the committee will need to do to this year. That is work I will need to do during this year. I am confident in this regard. Last year, I identified savings and efficiencies of €168 million on top of maintaining service commitments for 2016. That is what I intend to do for 2017 as well.