Ciarán Lynch (Cork South Central, Labour)
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The purpose of the meeting is to consider a motion referred by the Dáil pursuant to an order of the Dáil of 24 February 2015 regarding the draft order on capital carryover for 2015, namely, the Finance Act 2004 (Section 91)(Deferred Surrender to the Central Fund) Order 2015. The order of the referral requires the select sub-committee, when we have completed our consideration, to send a message to that effect to the Dáil. The message must be sent not later than 12 March. I welcome the Minister of State at the Department of Public Expenditure and Reform, Deputy Simon Harris, and his officials and thank them for attending and assisting our consideration of the motion. The Department has provided a briefing note. The Minister of State will briefly address the committee, after which members can respond or comment.

Simon Harris (Wicklow, Fine Gael)
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I thank the Chairman and committee for having me here today. In budget 2015, the Minister for Public Expenditure and Reform set out a programme of Exchequer capital investment of €11 billion out to 2017. This significant level of investment will address critical infrastructure deficits, aid economic growth and job creation and provide much needed social infrastructure. It is the first time the Government has been in a position to increase the budget for the public capital programme. While this increase is most welcome, our resources continue to be constrained and that is why the Government has focused those resources that are available on areas of greatest need.

In 2015, we will be spending €3.6 billion. The majority of this is focused on social housing, transport, education, health and enterprise supports. Housing was a particular priority area for the Government in budget 2015 given the recent difficulties in the housing market and the knock-on effects for the families and individuals who rely on Exchequer housing supports. For this reason, a total of €1.3 billion in Exchequer funding will be provided over the next three years to support the Government's housing programme. In addition, there will be private financing through a social housing public private partnership, PPP, of €300 million and €400 million will be provided to the approved housing bodies by way of an off-balance sheet financial vehicle.

The Minister for Public Expenditure and Reform has sought to supplement the capital budget where possible over recent years. We have reinvested the moneys we received from the lottery licence transaction and the asset disposals programme. This helped to provide much needed infrastructure throughout the country and sustain construction sector jobs at a time when there was very little private sector construction activity. The types of projects supported through this additional funding included road maintenance and repair, the redevelopment of Páirc Uí Chaoimh, commemoration projects, pyrite remediation, cycling greenways, a rural public transport initiative, and the upfront Exchequer costs associated with the new PPP programme.

The continued roll-out of some of the stimulus projects which received funding in 2014 is being facilitated through the carryover order which is before the committee today. As part of the ongoing reforms of how we prepare for and plan our budgets, the Department of Public Expenditure and Reform undertook a review of the public capital programme last year. The decisions made by the Government in relation to the ceilings out to 2017 were based on the review. The report on the review is being finalised and, when published, will include the full multi-annual capital envelope from 2015 to 2020.

The ministerial order that is before the committee today is a technical instrument. Its purpose is to allow the Dáil to approve formally the expenditure by Departments and agencies in the current financial year of capital moneys carried over from the previous year. The capital carryover facility forms an integral part of the five-year rolling multi-annual capital envelopes introduced a decade ago. The multi-annual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. It recognises the difficulties inherent in the planning and profiling of capital expenditure and acknowledges that, for myriad reasons, capital projects may be subject to delays. The carryover facility allows for a portion of unspent moneys which would have been lost to the capital programmes and projects concerned under the annual system of allocating capital to be made available for spending on programme priorities in the subsequent year. This type of approach to managing infrastructure projects makes sense and has been very successful. It helps to ensure better project management and to avoid uncertainty in project delivery. The multi-annual system also gives more certainty to contractors that they will be paid for the work they do. It has also helped to improve value for money and eliminate the potential for wasteful spending on non-essential works to ensure that full capital allocations are spent before the end of the year.

As I said, this is a technical exercise. The Exchequer and Audit Departments Act 1866 generally requires the surrender of unspent Exchequer moneys to the Central Fund at the end of each financial year. However, section 91 of the Finance Act 2004, which gives legal effect to capital carryover, allows the carryover of unspent voted Exchequer capital to the following year of up to 10% of capital by Vote, by deferring this surrender requirement, subject to certain conditions. Among these conditions are that the amounts of capital carried over by Vote be specified in the annual Appropriation Act of the year from which the carryover is proposed. The decisions in principle on the amounts of carryover by Vote are, therefore, determined in the Appropriation Act. The Dáil again has the opportunity to endorse the amounts in its decision on the Revised Estimates Volume which shows the capital carryover amounts separately in the relevant Votes.

The order we are discussing today sets out where Departments and agencies propose to spend the capital carryover amounts specified by Vote in the 2014 Appropriation Act. The total amount proposed in the draft order for 2015 is just over €79 million or 2.2% of the 2014 provisional outturn. The total 2015 gross Exchequer capital provision allocated in budget 2015 amounts to €3.6 billion. The capital carryover of €79 million will bring the total Exchequer capital available for spending in 2015 to just under €3.7 billion.

The €79 million will be spent as follows. The Department of Transport, Tourism and Sport will spend €24 million on stimulus related projects and programmes, including the sports capital programme, the development of an indoor arena at the National Sports Campus and the delivery of discovery points, lay-bys and other related infrastructure along the Wild Atlantic Way driving route. A further €3.7 million will be allocated to the provision and renovation of swimming pools and just over €1 million to meet commitments under the Irish Coast Guard capital programme, including work on the new Greystones Coast Guard station.

The Department of Jobs, Enterprise and Innovation will allocate €20 million in total. Some €9 million will be allocated to the science and technology development programme, €6 million to Enterprise Ireland to fund ongoing capital commitments and increased demand spanning various grant supports as well as a growth in investment activity, and €5 million to the IDA to help it to meet its 2015 remit.

The Department of Agriculture, Food and the Marine will spend €18 million on afforestation premia as well as funding new forest planting. The Department of Arts, Heritage and the Gaeltacht will allocate €1.1 million towards the cost of a number of Government approved commemorative projects, including the GPO interpretative exhibition centre. A further €1 million will be allocated to meet anticipated demands from Cork City Council in respect of the Cork event centre and €3.8 million will assist the Department to meet obligations arising from the EU habitats and birds directives. The Department of Communications, Energy and Natural Resources will allocate €4.6 million and just over €1 million will be spent by the shared services Vote and the Office of Government Procurement on office equipment and ICT required for the set-up of these services. Departments and agencies have delegated responsibility to manage their capital programmes and projects within the terms of the delegated capital sanction as set down by the Department of Public Expenditure and Reform. The availability of these capital carryover amounts in 2015 will assist them within this framework in tackling economic and social infrastructural priorities in their areas. I commend the order to the select sub-committee.

Seán Fleming (Laois-Offaly, Fianna Fail)
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This is a routine request to the committee every year. This year's carryover is smaller than last year and the year before. It is €79 million this year while last year it was in excess of €100 million. It is the smallest carryover in recent years, which means most of what was allocated was spent. We will not argue too much about the big figures because they are going in the right direction.

The carryover is €79 million, which is in the Estimates for this year. How much which could not be carried forward was forfeited? I presume any moneys carried forward must be spent in the same Department and money cannot be carried forward from one Department to another. Will the Minister of State clarify whether there is a mechanism for an underspend this year to be transferred to another Department if a project does not go ahead?

With regard to forestry, the figure of €18 million includes certain services administered by the Irish Land Commission. Does this still exist? There are also certain grants under cash limited schemes, including the remediation of Haulbowline. How does Haulbowline come into this? Is it with regard to the marine? If the Minister of State does not have the information to hand he can send it by way of correspondence.

Provision of €3.653 million is made for the renovation of swimming pools in the Vote for the Department of Transport, Tourism and Sport. How many projects did not go ahead? Will the Minister of State flesh this out and explain which local authority areas are involved and why delays have occurred? I presume local issues cause the delays. Will the projects go ahead?

I am concerned that €1.216 million earmarked for the decade of centenaries was not spent. It shows a lack of commitment by the Department of Arts, Heritage and the Gaeltacht to the issue. From my perspective, 2016 will be the most important centenary. I hope we will not be back here stating that we did not get our act together and do the projects we should have done. I am concerned about this.

Does the Minister of State have further detail on the National Parks and Wildlife Service project?

Simon Harris (Wicklow, Fine Gael)
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The money must be spent in the same Department but it can be moved to a different subhead if a project does not go ahead. I will ask the line Department to come back to the Deputy with a note on the Irish Land Commission and Haulbowline. I will also get the Department of Transport, Tourism and Sport to contact the Deputy with the specific information on the swimming pools. With regard to expenditure by the Department of Arts, Heritage and the Gaeltacht on commemorative projects, the challenge of capital projects is with regard to when the bill falls due. There is no suggestion whatsoever that projects will not be ready for what is a very important period of commemoration. My note states there has been slower than anticipated progress on some projects, specifically the GPO interpretive exhibition centre. The commitment to deliver all the projects before the commemoration is very much there, but the cheque will fall due to be paid this year rather than last year. With regard to the National Parks and Wildlife Service-----

Seán Fleming (Laois-Offaly, Fianna Fail)
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The briefing note the Minister of State has given us on how the carryover is to be spent this year states that €3.8 million will be spent on assisting in meeting obligations arising from the EU habitats and birds directives to address EU infringement cases. The hen harrier is in the Slieve Bloom mountains in my constituency. I am sure the Minister of State heard about it when he was canvassing in Ireland South last year.

Simon Harris (Wicklow, Fine Gael)
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I did.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will the Minister of State arrange a briefing note on the €3.8 million that must be spent as part of this carryover to address infringement cases with regard to the habitats and birds directives? It sounds as though a fine is in the pipeline.

Simon Harris (Wicklow, Fine Gael)
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I will be delighted to facilitate Deputy Fleming with a note. It is with regard to peatlands conservation measures, including the cessation of the turf cutting compensation scheme, to meet obligations arising from the EU habitats and birds directives. I will ask the Department to write to the Deputy.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Oireachtas is funny in how it runs its affairs. I will ask the Minister of State to get responses from the line Departments, because the committee will be told the Department of Arts, Heritage and the Gaeltacht does not report to this committee and so it will not send us a letter, and the same will happen with regard to swimming pools because the Department of Transport, Tourism and Sport does not report to this committee. The only way we can get information is through the Minister of State. The other Departments may well ignore requests from this committee.

Simon Harris (Wicklow, Fine Gael)
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I am happy to give that undertaking. We will collect the information and revert to the committee in a composite reply.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The amount surrendered was €6.433 million.

Simon Harris (Wicklow, Fine Gael)
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The total underspend on capital last year after the carryover was €2.5 million.

Seán Fleming (Laois-Offaly, Fianna Fail)
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According to the document, the amount surrendered to the Exchequer from the Department of Jobs, Enterprise and Innovation was €1.5 million, the amount from the Department of Agriculture, Food and the Marine was €693,000, the amount from the Department of Arts, Heritage and the Gaeltacht was €284,000, the amount from the Department of Communications and Energy was €783,000, the amount from the Office of Government Procurement was €840,000 and the amount from shared services was €2.305 million. This may be current and capital spending. According to the figures we have, the amounts surrendered to the Exchequer add up to €6.5 million.

Simon Harris (Wicklow, Fine Gael)
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I will try to assist. Total capital expenditure in 2014 amounted to €3.47 billion, including Supplementary Estimates. With regard to the capital carryover from 2014 to 2015, the total provisional outturn for capital was €3.55 billion. The total underspend on capital after Supplementary Estimates are accounted for is approximately €2.5 million, or 0.1%.

Seán Fleming (Laois-Offaly, Fianna Fail)
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What was surrendered? We are dealing with the carryover. The charts provided to us include amounts carried forward and amounts surrendered, which obviously did not meet the 10% threshold and were forfeited. They add up to €6 million.

Simon Harris (Wicklow, Fine Gael)
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The figures I have relate to Departments with carryover and amount to €2.5 million. I will come back to the Deputy with information on this.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am reading the figures on the chart we received.

Simon Harris (Wicklow, Fine Gael)
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We will have to come back to the Deputy.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I wish the officials to know that I am taking these figures from the charts we received.

Ciarán Lynch (Cork South Central, Labour)
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On behalf of the committee, I thank the Minister of State and his officials for attending.