Thursday, 17 December 2020
Appropriation Bill 2020: Second and Subsequent Stages
I appreciate the contributions of all Deputies across the House. I will just make some brief remarks in response. It will not be possible to cover the very wide range of points that have been made by colleagues. I thank colleagues for their support for this vital legislation, which is to provide a sound legal basis for the expenditure incurred in 2020. It also allows for the continuation of expenditure into 2021 prior to the passing by this House of the Estimates for 2021.
There are a few common themes in the various subjects the Deputies have raised. Capital expenditure was dealt with extensively by a number of Deputies, who quite understandably took the opportunity to raise projects and needs in various areas. Deputy Mairéad Farrell referred to Conamara's roads and bridges, Deputy Doherty referred to the development of Finn Harps, Deputy Nash referred to the Drogheda United development plans, and Deputy Shanahan raised a number of issues concerning Waterford and the wider south-east region. The offer I would make to individual Deputies is that I will work with them in respect of individual projects they want to see developed. We have a review of the national development plan under way. I encourage everyone to participate as part of the public consultation phase, which is now open. Information thereon is available on www.gov.ie/2040. Public submissions are possible right up to late January. It is a really important opportunity for members of the public, stakeholders, civic society groups and representative bodies from across the country to have their say on the direction of capital investment in the country over the next decade. By quarter 2 of next year, the intention is to adopt what will essentially be a new ten-year national development plan for the period to 2030. It will have to be consistent with Project Ireland 2040, the overarching spatial strategy for the development of our country and with the priorities in the programme for Government on tackling climate change and investing in transport, housing, healthcare, education and so on.
Reforms will be introduced as part of the review of the national development plan to address our ability to deliver the public capital investment programme. There will be strengthened oversight in respect of individual projects. External experts will be involved in making critical decisions during the life cycle of individual projects. We are also reviewing the capacity of the public sector to deliver on those major public capital programmes. It is a comprehensive review. We will be looking at the overall quantum of money required to deliver a national development plan over the next decade and assessing the different priorities, including some of the issues my colleagues have raised this afternoon, such as balanced regional development and many other areas. That is an important issue to highlight.
The issue of underspending was raised by a number of Deputies. This was a year like no other. The delivery of major construction projects was, understandably, impacted by the shutdown earlier in the year. Deputy Nash asked where the pressures are. The overall underspend in capital was almost €900 million and more than €200 million of that was in the area of housing. Construction was shut down for a number of months and that has had an impact on the delivery of the public housing programme. There has been an underspend in the region of €150 million in transport. On the capital side of the health budget, there has been an underspend of more than €100 million. The Deputy can see how those numbers add up in the context of the overall underspend. It should be put in perspective. The original budget for the 2020 capital investment programme was €8.2 billion and the final allocation, including extra allocations that were made over the course of the year, was almost €9.9 billion and the outturn is expected to be €9.3 billion. That is still more than €1 billion more than the original allocation for capital budgets in 2020. It is important to make that point. The vast majority of the amount that has been underspent will be carried forward into 2021 under the provisions that are available in the legislation. That will bring our programme next year to approximately €10.8 billion, which is a record level in the history of the State and it is important to say that.
A number of colleagues emphasised the need for investment in public housing and the public health service. That is exactly what we are seeking to do. For example, the plan for next year is to build 9,500 public houses in our country. The last year that we have complete data for is 2019, when approximately 6,500 public housing units were built. The ambition and funding are available to increase that to 9,500 next year. That will be part of an overall addition to the social housing stock of approximately 12,750. We absolutely want to see a shift in emphasis towards building public housing. That is what my party has done through the decades and we are determined to put the emphasis on direct delivery and direct building of public housing by approved housing bodies and local authorities. We will see significant progress in that area over the period ahead. I will be working closely with the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien, in that space.
I will take up the point made by Deputy Boyd Barrett in asking what is different from a decade ago. The reality is that we are now in a position to access funding and that has allowed us to bring forward the type of response which simply was not available a decade ago, as Deputy Howlin knows all about. We are in a position to borrow at historically low interest rates and the right thing to do now is to pursue counter-cyclical policies. Governments have not always had the opportunity to adopt such an approach. The truth is that these exceptional policies at European Central Bank, ECB, level will not be continued indefinitely. We welcome the statement from the ECB earlier this week to the effect that its bond-buying programme will now be extended through until March 2022. That is positive news but we will, over time, have to ensure that our public finances are on a sustainable path. That is about ensuring that we are borrowing for capital purposes and not for current purposes and, ultimately, moving towards a deficit of less than 3% and a broadly balanced budget. In the April stability programme update the Minister for Finance, Deputy Donohoe, and I will publish in April 2021, we will set out the pathway and trajectory as to how we achieve that.
I draw the attention of Members to the Revised Estimates for Public Services 2021 published this week. It is important that we learn from our experience of public expenditure in 2020 and achieve value for money. It is important to have strict expenditure control mechanisms in place. There is a wealth of information in the published Revised Estimates for 2021 relating to performance metrics, outputs from different Votes and exactly what the Government expects to be achieved by different Departments in respect of the extraordinary budgets that have been provided for 2021. In 2020, gross Government expenditure is of the order of €87.3 billion. If we spend all of the money allocated to the recovery fund and the Covid-19 contingency fund, we have the capacity for an outturn of €87.8 billion in 2021. We are maintaining an elevated level of public expenditure to support the economy because addressing the legacy unemployment issues from Covid is going to be a top priority for this Government in 2021 and beyond. We are determined to do that, to support households and businesses and to do all that we can to support our economy in what will remain a challenging time. We will know the outcome of Brexit in a short period of time. We also need to improve public services and that is why we have made a step change in investment in the public health system with an increase in funding of €4 billion in 2021. Those are extraordinary sums, but we need to get a return in respect of them.
I thank my colleagues for their support for this Bill and look forward to working with them through 2021 as we implement the budget for next year. I know that the Estimates will be considered at committee level and will ultimately come back into the House to be voted upon.