Mr. Barry O'Brien:

I thank the Cathaoirleach and members of the committee for the invitation to attend. By way of introduction, I am assistant secretary within the Department with responsibility for the expenditure policy division. I am joined by Ms Jessica Lawless, principal officer of the short-term expenditure policy unit, and Ms Niamh Callaghan, principal officer of the medium-term expenditure policy unit.

I am pleased to be here to discuss two important pieces of work that have been progressed by my Department over the past 12 months: Circular 18/2025 on value for money obligations; and Circular 21/2026 on expenditure control and escalation processes.

Before discussing these circulars in more detail, I will briefly outline our Department’s role. The Department's mission is to drive the delivery of better public services, living standards and infrastructure for the people of Ireland. The expenditure policy division has responsibility for developing and monitoring overall expenditure policy in line with Government objectives and agreed fiscal parameters, including the annual Estimates process and implementing the medium-term fiscal and structural plan.

The medium-term plan was agreed to and published by Government last December setting out expenditure ceilings to 2030. It will see expenditure increase to €147.3 billion to 2030, with continued investment in both capital and current spending. Over the period, the growth rate of expenditure will moderate to an average of 6% per annum compared to 9.4% over the years 2019 to 2024.

To support adherence to these ceilings, the Department establishes the rules and the governance frameworks to support Accounting Officers in discharging their responsibility to ensure effective delivery, value for money and accountability. These include the Code of Practice of the Governance of State Bodies, public financial procedures, infrastructure guidelines, public procurement guidelines and arrangements for the oversight of digital and IT projects and initiatives.

All of these guidelines emphasise the importance of delivering value for money with public funds. As the committee will be aware, the Department has published two circulars over the last year - Circular 18/2025 value for money obligations and Circular 21/2026 expenditure control and escalation process - to support the delivery of the medium-term fiscal and structural plan. Both circulars are examples of the Department's broader role in supporting good public financial management, strengthening accountability, and ensuring that public resources are used effectively and sustainably. These circulars are intended as practical tools to support better decision-making and stronger expenditure management across the public service.

In August 2025, the Department published Circular 18/2025 on value for money obligations. The circular sets out the roles and responsibilities of public bodies and officials in ensuring value for money. It also highlights the legislative framework and guidance that supports sound financial management and decision-making. In addition, the circular outlines the key frameworks that underpin the achievement of value for money and the legislative basis upon which they are founded. It emphasises that value for money must be actively pursued by all public servants at every level and that further fostering of a strong value for money culture is a fundamental part of the budgetary process, particularly when balancing competing priorities and making difficult spending decisions.

In May 2026, the Department published Circular 21/2026 on expenditure control and escalation processes. The circular establishes a formal and consistent approach to managing expenditure overruns by setting out nine phased escalation stages and processes. It also outlines the measures available to our Department where expenditure is at risk of breaching agreed ceilings. These include enhanced oversight arrangements, such as the establishment of a budgetary oversight group and, where necessary, the removal of delegated sanction. The circular also includes an annual employment and pay bill management plan to improve the sustainability of pay expenditure.

In the context of budget 2027, Departments will be required to set out their pay bill ceiling, their headcount ceiling, and the carryover costs of planned recruitment. This escalation process is intended to increase accountability, transparency and clarity on how spending pressures and overruns may be addressed. In doing so, it strengthens expenditure control and supports fiscal discipline across Government.

One key point that is emphasised throughout both circulars is that it is the responsibility of the Accounting Officer for each Department to ensure that they manage expenditure sustainably and in accordance with agreed allocations.

This responsibility is set out in legislation, including in sections 4 and 9 of the Public Service Management Act 1997. It is the responsibility of the Accounting Officer to ensure that internal audit arrangements and control mechanisms are in place to support financial scrutiny, and that value for money and efficiencies are taken into account in relation to the preparation and implementation of policy proposals.

I thank the committee for its invitation to discuss both circulars, and I look forward to engaging with any questions.