Mr. Ronnie Downes:

I thank the Chairperson for the invitation to appear before the committee and for the opportunity to discuss the Public Service Performance Report 2020 and answer any questions the Chairperson or committee members may have on performance budgeting and its role within the overall expenditure and budgetary framework.

The Government submission to the select Committee on Arrangements for Budgetary Scrutiny, in June 2016, committed to the publication of a performance report by the Minister for Public Expenditure and Reform. The first such report was published in 2017, with the Public Service Performance Report 2020, being the fifth edition of the report.

As recommended in the committee’s Interim Report on the framework for parliamentary engagement throughout the course of the budgetary cycle late last year, it was signalled that financial performance should be assessed through the principles of performance budgeting, focusing on what is being delivered with resources and how this aligns with the programme for Government and departmental statements of strategy.

The purpose of the performance report is to increase transparency and accountability and to ensure that the committee, as parliamentarians, and that citizens can see clearly how the public funds are being used and what they are accomplishing. The information is deliberately presented in as clear and accessible a way as we can to ensure that people generally, not just those with financial expertise, can better understand how public money is being used.

The report builds on the existing elements of the performance-based budgeting initiative and creates a space within the budget process and cycle for performance-based dialogue. While performance information is provided alongside financial information in the Revised Estimates Volume, REV, in December, of each year, outturn information for the current year cannot be provided because of the timing of the REV publication. This means that committees may not have the relevant or most up-to-date information to allow them to assess performance for the most recent year in a timely fashion.

The performance report tries to address this lacuna by providing timely quantitative and qualitative information on what was delivered with public funds in the previous year so that there is an opportunity for meaningful dialogue between Ministers, Departments and the relevant sectoral committees on Government performance. The information provided will hopefully assist the relevant sectoral committees in tracking progress from year to year as to the outputs and outcomes of key governmental strategies.

I note that the committee's Final Report on the Framework for Parliamentary Engagement Throughout the Course of the Budgetary Cycle puts forward the proposal that sectoral committees should meet to consider the chapters of this performance report that are relevant to their areas of oversight. The performance report is designed to support such an enhanced focus on performance and delivery by committees. The relevant performance indicators are presented in this dedicated, focused document in as accessible a manner as we can make it. This approach seeks to enable the sectoral committees to make best use of the time available for reviewing performance and achievement by Departments and agencies.

This performance report is just one part of a broader suite of measures across the system to increase evidence-based decision-making, such as the spending review process, and the analytical papers that are produced regularly in that context, including by the Irish Government Economic and Evaluation Service, IGEES, network and the public spending code, which also set certain standards there.

Towards the back of the document the report includes an update on initiatives such as equality budgeting and green budgeting which are both integrated into this performance budgeting framework.

The equality budgeting pilot was introduced in 2018, and brings a new focus to performance budgeting, looking at various equality dimensions such as gender, socio-economic inequality, disability and minority groups. To date, 12 Departments have participated in equality budgeting and it has increased steadily year-on-year.

Following a Government decision earlier this year, we are stepping that up and an interdepartmental group is being established to drive this important work across all areas of Government. This work is overseen and contributed to by an equality budgeting expert advisory group, which comprises key stakeholders and relevant experts, including independent voices. The last time I spoke to this committee, I drew attention to the OECD report on equality budgeting and we are moving forward with implementation of the various recommendations in that report.

Also related to the OECD, in 2019 Ireland joined the OECD Paris Collaborative on Green Budgeting and committed in that context to the progressive implementation of a range of reforms to the budgetary process with a view to better embedding climate and environmental goals within the budget process. With the ambitious climate targets in the programme for Government and their incorporation into legislation via the Climate Action and Low Carbon Development Bill 2021, the requirement for the budget process to support this grows more pressing. As I said, an update on this work is also included in the performance report.

As regards next steps, an ambitious work plan for performance budgeting policy is in place for the year ahead, which aims to continue and build on the momentum achieved to date and further advance this work. Last year, the Department of Public Expenditure and Reform successfully applied for funding to develop our performance budgeting framework and systems under the EU structural reform support programme, SRSP. The project incorporates the various elements and dimensions of performance budgeting, such as equality and climate-related budgeting and other aspects, including the Sustainable Development Goals and the well-being framework, all of which is in line with the programme for Government commitment to develop and utilise a national well-being framework. That EU-funded project is now near its mid-point and we are focusing on key priorities, such as improving and upgrading the IT framework for performance budgeting and increased the tagging or labelling of expenditure so we can more easily prepare and generate reports in order to highlight progress. In this context, we have undertaken a number of peer-to-peer study missions with counterparts in other countries to allow us to learn from best international practice. We keep our performance budgeting framework under constant and regular review to ensure it best serves the purpose of increasing transparency and accountability. Feedback from stakeholders is an essential part of this and, in particular, we value feedback from this committee as a cornerstone of that ongoing process.

In conclusion, it is clear from the committee’s final report that the performance report is a source of information that can be further utilised by the various sectoral committees in their engagement with Ministers and their Departments. This engagement in principle allows the various committees to consider, with the relevant line Departments, any issues regarding performance against target and what is actually being achieved, and perhaps issues with the specific indicators selected for inclusion in the report and how they can be refined and upgraded. We found that the recommendations contained in the committee’s report were quite thoughtful in this regard and we are putting together some material with a view to submitting a formal reply to the recommendations in that regard.

I thank the Chairman and the committee for including this performance report on its agenda and I look forward to hearing feedback and the views of members. This engagement with the committee in regard to the overall format of the report, and its positioning and role within the budgetary cycle, is very important to the Department of Public Expenditure and Reform as we continue our work in enhancing the overall performance budgeting framework and the performance report in particular. I know the Minister for Public Expenditure and Reform, Deputy Michael McGrath, is committed to advancing this agenda.