Ms Caroline O'Loughlin:

I thank the Chair for the invitation to appear before the committee and the opportunity to discuss the Public Service Performance Report 2021 and answer any questions the committee may have about performance budgeting and its role within the overall expenditure framework.

The Government submission to the Select Committee on Arrangements for Budgetary Scrutiny, dated June 2016, committed to the publication of a performance report by the Minister for Public Expenditure and Reform. The first report was published in 2017. The Public Service Performance Report 2021 is the sixth edition.

As recommended in the committee's final report on the framework for parliamentary engagement throughout the course of the budgetary cycle, 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 ensure every citizen can see clearly how public funds are being utilised. The information is deliberately presented in a clear and accessible way to ensure that everyone, not just those with financial expertise, can fully understand how public money is being used. The report builds on the existing elements of the performance-based budgeting initiative and creates a space in the budget process for performance dialogue. While performance information is provided alongside financial information in the Revised Estimates Volume, REV, in December, outturn information for the current year cannot be provided due to the timing of REV publication. This means committees may not have the relevant information to allow them to assess performance for the most recent year in a timely fashion. The performance report addresses this by providing timely quantitative information on what was delivered with public funds in the previous year. This creates an opportunity for meaningful dialogue between Ministers and the relevant sectoral committees on Government performance. The information provided in the report will assist the relevant sectoral committees in tracking progress on the outputs and outcomes of key Government strategies.

The committee's final report on the framework for parliamentary engagement proposes that sectoral committees meet to consider the chapters of the performance report relevant to their areas of oversight. The performance report is designed to support such an enhanced focus on performance and delivery by committees. Relevant performance indicators are presented in a dedicated, focused document in an accessible manner. This approach seeks to enable sectoral committees to make best use of the time available for reviewing performance and achievement by Departments and agencies. The performance report is just one element of a suite of measures to increase evidence-based decision-making, such as the spending review process, the Irish Government Economic and Evaluation Service network and the public spending code.

Updates on equality budgeting and green budgeting, which are both integrated into the performance budgeting framework, are also included in the report. The equality budgeting pilot was implemented in 2018. It brings a new focus to performance budgeting, considering equality dimensions such as gender, socio-economic inequality, disability and minority groups. Following a Government decision in 2021 to accelerate the implementation of performance budgeting, all Departments now participate in equality budgeting and report equality metrics in both the REV and the performance report. An interdepartmental group has been established to drive this important work across all areas of government. This work is overseen by an equality budgeting expert advisory group, which comprises key stakeholders and relevant experts.

In 2019, Ireland joined the OECD Paris Collaborative on Green Budgeting and committed to the progressive implementation of reforms to the budgetary process to better embed climate and environmental goals within it.

With the advent of the ambitious climate targets in the programme for Government commitments and their incorporation into legislation via the Climate Action and Low Carbon Development (Amendment) Act 2021, this need grows ever more pressing. An update on this work is also included.

An ambitious work plan for performance budgeting policy is in place for the coming year. It aims to continue the momentum achieved to date and further advance this work.

In 2019, the Department of Public Expenditure and Reform successfully applied for funding to develop our performance budgeting framework and systems under the EU structural reforms support programme. The project incorporates all elements of performance budgeting, such as equality, green, sustainable development goals, SDG, and well-being budgeting, in line with the programme for Government commitment to develop a national well-being framework. The project is now entering the final phase and focuses on key priorities, such as improving the ICT framework for performance budgeting and increasing tagging of expenditure. A number of peer-to-peer study missions have also taken place to facilitate information exchange and allow Irish budget officials to learn from best international practice.

The performance budgeting framework is kept under constant review to ensure it best serves the purpose of increasing transparency and accountability. Feedback from stakeholders is an essential part of this and we particularly value feedback from the committee as a cornerstone of that.

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 sectoral committees in their engagement with Ministers and their Departments. Such engagement would, in principle, allow the sectoral committees to consider, with the relevant line Departments, any issues regarding performance against targets, with the specific indicators selected for inclusion in the report.

The recommendations contained in the committee’s final report were quite thoughtful in this regard. I thank the committee for including this document on its agenda and I look forward to hearing its feedback. The engagement with the committee on the overall format of the report and its positioning 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.