Mr. Robert Watt:

I will skip ahead to the section that specifically deals with reports which is from page 6 of the written statement.

I will give a brief overview of some items on the agenda and the first relates to chapter 6 of the Comptroller and Auditor General's report and chapter 5 of the 2017 report on Vote accounting and budget management. In respect of 2016, gross voted current expenditure amounted to €51.8 billion. This was €100 million, or 0.2%, under profile and €900 million, or 1.8%, up on the 2015 figure. Gross voted capital expenditure was €4.2 billion and this was €200 million, or 6.2%, ahead of profile and €500 million, or 12.9%, up on the 2015 figure. The higher level of capital expenditure - the outturn figure for that year - was signalled in the mid-year expenditure report and related mainly to road repairs in response to the 2016 floods which members will remember and faster than expected progress on the schools building programme, so those related to conscious Government decisions to increase spending during the year.

In respect of 2017, gross voted expenditure was €58.5 billion. This was €480 million, or 0.8%, higher than the gross expenditure allocation set out in the 2017 revised estimates volume. This increase was expected as it was accommodated within the further Revised Estimates and Supplementary Estimates agreed by the Oireachtas in December.

The additional expenditure arose mainly from policy decisions relating to the provision of domestic water services.

The Revised Estimates for 2018 provided for total gross voted expenditure of €61.8 billion, a further increase of 5.5% on the 2017 outturn. On budget day last week, the Minister for Finance, Deputy Donohoe, announced additional allocations for 2018 mainly relating to health, housing, education and justice. If we take these adjustments into account, along with the provision of a 100% Christmas bonus for social welfare recipients, the revised allocation for 2018 amounts to €62.8 billion. Of this, some €56.9 billion relates to current expenditure and the balance of €5.9 billion relates to capital expenditure.

We can see the progress this year. Total gross voted expenditure at end-September is €44.9 billion. Of this, €41.6 billion relates to current expenditure. This is ahead of profile by €265 million and is up €2.5 billion or 6.3% on the same period in 2017. Capital expenditure to the end of the third quarter amounts to €3.3 billion, which is €253 million or 7.2% below profile and €756 million or 30% above the same period in 2017. This reflects the significant increase in the allocations for capital spending in 2018, a trend we have seen since 2015.

The second item on the agenda concerns Vote 11 relating to the Office of the Minister for Public Expenditure and Reform in 2016. I will address the Department's 2017 Vote as well. The Estimate for 2016 was €43.7 million, a 7.7% increase on 2015. As has been mentioned already, this was driven mainly by the need for additional resources for the Office of the Government Chief Information Officer, Structural Funds technical support and assistance for regional assemblies and the Special EU Programmes Body. The increase was also due to the creation of new subheads for the funding of pensions of bodies under the aegis of the Department, Civil Service learning and development and support for the implementation of the Protected Disclosures Act. There has been an increase in spending above average under Vote 11 reflecting the consolidation of functions that were previously undertaken by other Departments and that are now undertaken centrally. This reflects Civil Service renewal and public sector reform in the area of information technology. The Comptroller and Auditor General mentioned the significant resources that are going to the Office of the Government Chief Information Officer. One of those projects is SharePoint, which involves the implementation of a suite of electronic systems, including electronic parliamentary questions, e-submissions and e-records. This will apply by the end of next year to 36,000 civil servants across all the Departments and bodies. In effect it is being delivered centrally by the office. It involves considerable developmental software work that previously would have been undertaken by Departments but has now been consolidated centrally. It reflects our view that it is better to have the expertise and capacity centrally based. It is more effective, in particular in respect of smaller offices and Departments that would not have well-developed information technology systems. One theme in the Vote over the years has been this consolidation. The same argument applies to learning and development. More and more learning and development is being done centrally though shared services because of the belief that we get better value for money and better quality services if we do it centrally. The audited surplus to surrender for 2016 was €2.5 million and arose for a number of reasons, as set out in the briefing supplied.

The Estimate for 2017 was €53.1 million. This increase was driven mainly by the need for additional resources for the Office of the Government Chief Information Officer and administrative pay. The increase was also due to the creation of new subheads for the Public Service Pay Commission, the Irish Government Economic and Evaluation Service and the Single Public Service Pension Scheme. The work of the Irish Government Economic and Evaluation Service involves the recruitment of economists at different levels who come to the service but who spend an initial period with our Department and are subject to a specific training programme. The paybill and training costs during the earlier period of their careers is drawn from the Vote of our Department. Then, people within the service are sent out to other Departments to do their work across the system. Again, that explains a large element of the increase in spending. The audited surplus to surrender in respect of 2017 was €1.3 million and arose for a number of reasons, as set out in the briefing supplied.

Vote 12 relates to superannuation and retired allowances. The net outturn for 2016 was €341.1 million, compared to an estimate of €391.9 million. This gives a surplus to surrender of €50.8 million. This arose mainly because of underspending on established lump sums and greater-than-expected receipts from the Single Public Service Pension Scheme. As we have debated at this committee previously, estimating the lump sums for any given year is difficult and problematic. It fluctuates significantly and thus is a challenge for us to estimate. The large variability in the Vote relates to the lump sum element. Hopefully, we will have a better handle in respect of the receipts in future.

In 2017, the net outturn was €332.9 million, compared to an estimate of €366.4 million. This gives a surplus to surrender to the Exchequer of €33 .5 million, which arose for similar reasons to those I outlined for 2016.

Chapter 2 of the Comptroller and Auditor General's 2017 report deals with the collection of pension contributions due to the Exchequer. The 2012 legislation underpinning the new Single Public Service Pension Scheme provides that certain self-financing public bodies may be required to make employer contributions for their staff members who are in the single scheme. A review and engagement with the bodies to which this is likely to apply is ongoing in my Department and will be completed by the end of this year. On foot of the review I expect that 25 to 30 mainly self-financing bodies will be deemed eligible for employer contributions. Since the Comptroller and Auditor General completed the analysis set out in this chapter, two additional bodies have remitted employer contributions. The current position is that 16 bodies are submitting employer contributions, with €5. 7 million remitted to date. Any back-money or money that is owing will be remitted to the Exchequer in due course when we establish the exact position. Any bodies that did not make the full remittance in time will make good to the Exchequer in due course.

Chapter 3 of the 2017 report deals with the control of funding for voted public services. Given that the legal appropriation of funds for supply services generally occurs late in the year, the chapter highlights the potential risks to the approval of the estimates arising from a failure to enact the appropriations legislation by year end. In considering this matter, it is important to note the constitutional requirement that legislation to give effect to the financial resolutions of Dáil Éireann must be enacted within the same year. The Constitution also requires that the Appropriation Bill schedule is based on the timing of approval by the Dáil of Supplementary Estimates for the year, thus ensuring that all Estimates voted by Dáil Éireann are reflected in the relevant Appropriation Bill. Mindful of the risk, as identified, relating to the enactment of Appropriation Bill at the end of the year, officials in my Department ensure that there is clear and constant communication with the Whip's Office on the timeline for publication of the Bill. They provide all relevant briefing in a timely manner, including for the Business Committee. This is a risk we are very much aware of. It has never happened that we did not enact the Appropriation Bill, and for good reason because we would not then be in a position to spend any money from 1 January, including the salaries and so on of everyone who has to vote on the Bill. We know that when it comes to it, Dáil Éireann always finds the time. In effect, the State would fail to function because we would not be able to invoke the 80% rule.