John Gormley (Dublin South East, Green Party)

On publication of the public expenditure Estimates associated with Budget 2009 in October 2008, the Department's overall capital expenditure envelope amounted to €2.145 billion. Most of this funding related to capital expenditure grants for housing, infrastructural and other capital programmes, chiefly implemented by local authorities. At the end of February 2009, total capital expenditure by the Department amounted to €223 million.

This level of capital expenditure has continued to sustain important local authority capital programmes relating to social and affordable housing provision; continued expansion of investment in sewage treatment and water supply infrastructure; the provision of fire stations and public libraries; upgrading of waste recycling facilities; improvements to our national parks and other heritage improvements.

In the reply to an earlier question, I referred to the Government's preparation of a supplementary budget to ensure that the projected general Government deficit does not worsen in 2009. This can be expected to include a combination of expenditure adjustments and revenue raising measures. In line with the Government's continuing commitment to productive capital investment, the Department will continue to have sufficient capital resources to allow local authorities to meet their capital commitments arising in 2009, that capital projects underway will proceed as planned across all local authorities, and that our most critical investment priorities can be maintained.

The capacity to commence new capital projects will reflect the extent of capital provisions finally determined for the current year. I will review the priority needs of all programmes in deciding on the extent to which new commitments are entered into by the Department and by local authorities. I am acutely aware of the value of key infrastructural investment programmes in terms of employment creation and maintenance, economic recovery and social and environmental support. I intend to sustain these programmes to the highest level possible into the future.

It is normal practice for local authorities to supplement Exchequer capital grants with borrowing and I am aware of the wishes of councils to continue to avail of borrowing facilities in 2009. Local authority borrowing forms part of the overall general Government balance for national financial reporting. As part of the overall management of national borrowing levels, a limit also applies to local government sector borrowing. I will be addressing priority borrowing needs in the local government sector for 2009 in consultation with the local authorities over the next few weeks and I will facilitate urgent needs.

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