Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As I announced in my speech on budget day last year, this spending review will be carried out in advance of budget 2018. The economic and political landscape in Ireland has changed very considerably since this work was last done in 2014. There are now increasing and competing public service demands across a period in which expenditure growth is planned at a moderate pace. The approach taken to this review will therefore be tailored to reflect the changed context and lessons from previous reviews. We will systematically identify the cost of existing projects and, as part of doing this work, we will look at the role of PPPs.

PPPs offer an alternative model for delivering infrastructure that can be effective in particular circumstances.  Under the comprehensive policy framework for PPPs that has been put in place, there is detailed guidance on the value-for-money tests that must be applied at different points in the procurement cycle to determine a project's appropriateness for procurement as a PPP.

While I am open to considering, on the basis of this review, the role they may play in priority public capital infrastructure, as I said to the Deputy in the meeting of the Committee on Budgetary Oversight, the complexity of determining the off-balance-sheet status of a project can, in certain circumstances, introduce a level of uncertainty into capital planning. Consequently, at a point in the future the Government can find itself facing difficult choices over commitments made if it turns out that the planned level of off-balance-sheet funding simply is not feasible.

The affordability and fiscal sustainability of PPPs are particularly important considerations for the review in light of the higher cost of private finance and the long-term nature of the financial commitments arising from PPPs.

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