Mr. Robert Watt:

I welcome the clear audit opinion given by the Comptroller and Auditor General in respect of the Votes that are subject to review this afternoon. There are issues in regard to underexpenditure across a number of the Votes. The reasons for that have been set out very clearly. They relate mainly to a number of reform projects that have been committed to. We had a slower than expected take-up on a number of initiatives, slow recruitment processes and retention of contractors involved in delivering some of these projects. These projects are very significant. Obviously, what Mr. Paul Quinn is driving in terms of procurement reform and what we are doing in shared services comprise very significant transformation projects. We have an issue all the time in respect of trying to get the pacing right and trying to pace our projects in a sensible way, ensuring value for money while at the same time ensuring we are spending what is allocated and keeping within profile. We are aware that, for 2015, there were significant underspends, as set out in the Comptroller and Auditor General's report. As a Department, we are very much conscious of ensuring we set out only Estimates and draw down amounts as close as possible to those, consistent with the financial procedures.

More generally, in terms of managing spending, the committee will be aware that a key part of our job is not just preparation of the budget but also executing it during the year. A key issue for us is to ensure overall spending stays within profile. Again, the Comptroller and Auditor General has set out in the report our performance in this respect. It varies from year to year. On average in recent years, we stayed at about 2%. The variance against profile is around 2%. There are many reasons for that. They relate to forecasting errors, issues around forecasting demand, particularly in regard to the health service, and specifically Government decisions on issues such as the Christmas bonus or additional moneys allocated for capital programmes. Especially during 2015, as taxes exceeded profile, the Government had the opportunity to make some additional investments in capital infrastructure and it provided for some restoration of the Christmas bonus. That was the first time it was done since the economic crash. It is an ongoing challenge for our Department in terms of managing spending in line with profile.

I will touch on some of the reform issues with which we are pushing ahead. Procurement reform, shared services and digitalisation are issues we discussed previously at meetings of this committee. We are pushing ahead with those. Two issues that have taken up a lot of our time this year relate to the negotiations on the recent pay agreement. Deputies will be aware that the unions are now in a process of balloting in respect of the new agreement, the extension of the Lansdowne Road agreement. It is very important in terms of securing industrial peace and co-operation with ongoing reform but also necessary to ensure we have a pay settlement that is affordable and sustainable for the State.

My next point is on the capital review. I heard some of the discussions this morning when the members were debating with colleagues from the Department of Finance on capital spending and issues associated with that. The Government is now considering the mid-term review of the current capital plan. The Minister, Deputy Paschal Donohoe, hopes to announce on budget day some additional projects and allocations in respect of capital spending. It is a key part of what the Department is engaged in now.

We are delighted to be here and to answer any questions that arise. I thank colleagues in the Department for all their work. It is very rare we get the opportunity to thank people in the Department for all the effort they put in. Members are aware of the significant work that goes on in the Department in terms of the various projects.