Mr. David Moloney:

I thank the Chairman and members of the committee for affording me the opportunity to make an opening statement. The Department of Public Expenditure, National Development Plan Delivery and Reform plays a key role in developing and monitoring overall expenditure in line with Government objectives and agreed fiscal policy. The Government expenditure ceiling, which includes all gross expenditure funding allocated to all ministerial Vote groups and any funding to be allocated for in-year developments, is decided on by Government by request of the Minister for Finance. These ceilings are set and monitored as part of the whole-of-year budgetary process.

In spring each year, the Minister for Finance, in consultation with the Minister for Public Expenditure, National Development Plan Delivery and Reform, submits the annual update on the stability programme to the European Commission. The stability programme update, SPU, on the basis of existing policy, sets out fiscal projections and the policy position in advance of the annual budget. Following the SPU, the national economic dialogue is held in June. It provides a valuable forum for an open and inclusive exchange of views on the competing economic and social priorities facing the Government today and in the future.

In summer, the summer economic statement, SES, and the mid-year expenditure report, MYER, are published. The SES is a key milestone in our budgetary timetable. It sets out the Government’s fiscal and expenditure strategy for the year ahead and provides an outline of the resources that will be available in the context of the budget. The MYER, published by my Department following the SES, provides more detail on the expenditure strategy and sets out the baseline position for ministerial expenditure ceilings ahead of the budgetary process.

Throughout the period until October, my Department engages with all Departments across government to deliver the budget in line with the parameters set out in the summer economic statement. This is achieved through engagement with the individual Departments on their requirements and plans for the year, and results in the ministerial expenditure ceilings. These are then agreed by the Government and the Dáil in due course as part of the budget and Estimates process, of which members are aware.

In terms of budget 2024, a number of events over the past few years continue to have a real impact on our public service and those living in Ireland. In setting out this year’s budgetary package, as part of the summer economic statement, the Government took a balanced and responsive approach, including increasing the level of core expenditure growth from 5% to 6.1% and providing an additional package of €4 billion of non-core expenditure to address external challenges, including those impacted by the war in Ukraine and the legacy impacts of the pandemic. This planned and careful management of our public expenditure allows the Government to smooth out the impacts of elevated inflation and protect core public services, deliver significant and essential infrastructure projects through the national development plan and respond to short-term external challenges, while limiting the potential to add to inflationary pressures. Following the Estimates process, budget 2024 set out €91.2 billion in core expenditure to deliver the everyday public services. In addition to this figure, an increased allocation of €4.5 billion was made for non-core expenditure to address the externally-driven challenges. This allowed for the allocation of €1 billion of non-core expenditure to the Department of Health.

The Department of Public Expenditure, National Development Plan Delivery and Reform engages on an ongoing basis with all Departments and will continue to monitor and develop our budgetary process with a view to ensuring that value for money is delivered across Government projects and programmes. Managing the delivery of public services within budgetary allocations is, of course, a key responsibility of each Minister and his or her Department. My Department is in regular communication with all Departments to ensure expenditure is managed within the overall fiscal parameters. There are a number of supporting processes and procedures in place, including the monitoring of drawdowns from the Exchequer. Key data and information are published monthly with the Exchequer returns as part of the fiscal monitor and quarterly reporting to the Government is provided by the main spending Departments.

For health expenditure, the Department works closely with the Department of Health through a series of interlinked oversight arrangements.

These include monthly financial performance reports, quarterly expenditure memos to Government, meetings of the health budget oversight group and regular engagements across all areas of health service delivery. This oversight takes full account of the Health Acts, which set out the legal framework for health expenditure. Under these Acts, the Minister for Health sets the expenditure levels for the HSE, that is, the net determination, and the HSE is required to manage services in line with that net determination.

In recent years, there has been a prioritisation of health with overall health spending doubling since 2016. According to the OECD, in 2020, Ireland ranked first in the EU for expenditure on healthcare as a proportion of our national income and as a proportion of total Government spending despite our relatively young population. The total health allocation in budget 2024, as agreed by Government, is €22.5 billion, which is an increase of €1.142 billion, or 5.4%, on 2023. The non-core allocation I have mentioned provides both time and funding for the Department of Health and the HSE to address specific acute sector funding pressures, to improve the resilience of hospitals and to improve financial governance in the acute sector. Department officials are working closely with our colleagues in the Department of Health and the HSE to agree an approach for the use of these funds for ministerial approval.

I assure the committee that the Department of Public Expenditure, National Development Plan Delivery and Reform is fully focused on working with all Departments to manage public expenditure within the overall envelopes set by Government. I thank the committee for its attention and I am happy to take questions.