Dáil debates

Wednesday, 3 February 2021

Finance Act 2004 (section 91) (Deferred Surrender to the Central Fund) Order 2020: Motion


1:55 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move:

That Dáil Éireann approves the following Order in draft: Finance Act 2004 (Section 91) (Deferred Surrender to the Central Fund) Order 2021, copies of which have been laid in draft form before Dáil Éireann on 12th January, 2021.

At the outset I would like to say that despite the extraordinarily difficult circumstances over the past year, we have successfully maintained investment in Ireland's public capital programme. The programme, which was outlined in the National Development Plan 2018-2027, will continue to address infrastructure deficits in key social and economic areas.

I welcome the opportunity to make an opening statement on the deferred surrender process, which is an important technical instrument to allow the Dáil formally approve the expenditure by Departments and agencies in the current financial year of capital moneys carried over from last year. The ministerial order, which is before the House today, is, as I say, a technical instrument and does not involve any new policy decision or any additional funding allocations.

The provision of the capital carry-over facility recognises the fundamental difficulties in the planning, procurement and profiling of capital expenditure and acknowledges that for any number of reasons, capital projects may be subject to delays. This type of approach to managing infrastructure expenditure makes sense and, thus far, has been very successful. It helps to ensure better project management and to avoid uncertainty in project delivery. The multi-annual system also gives more certainty to contractors that they will be paid for the work they do. The carry-over facility also helps to improve value for money and eliminates the potential for wasteful spending on non-essential works to ensure full capital allocations are spent before the end of the year.

The Exchequer and Audit Departments Act 1866 generally requires the surrender of unspent Exchequer moneys to the Central Fund at the end of each financial year. However, section 91 of the Finance Act 2004 gives legal effect to the carry-over of unspent voted Exchequer capital to the following year, up to 10% of capital by Vote, subject to certain conditions, by deferring this surrender requirement.

Among those conditions are that the amounts of capital carried over by Vote be specified in the annual Appropriation Act of the year from which the carry-over is proposed. The actual decision in principle on the amounts of carry-over by Vote is therefore determined in the Appropriation Act. The Dáil again has the opportunity to endorse the amounts in its decision on the Revised Estimates volume, which shows the capital carry-over amounts separately in the relevant Votes.

The carry-over amounts provided for in the Appropriation Act are required to be confirmed in an order to be made by the Minister for Public Expenditure and Reform by 31 March of the following year, after approval of the order by the Dáil, to allow expenditure to take place. The order sets out the amounts by subhead consistent with the amount by Vote specified in the Appropriation Act.

It should be noted that the Department of Health had sought a carry-over of €107 million and this sum was provided for in the 2020 Appropriation Act. However, it subsequently transpired that the Department did not have sufficient savings at year end and the carry-over amount has been adjusted accordingly.

Deputies will be aware that 2020 was far from an ordinary year, as reflected in the higher than usual requests for capital carry-over. The construction industry was not immune to the disruption caused by the Covid-19 pandemic, which has resulted in delays to the delivery of some projects.

In addition to the capital allocations committed to in the NDP, a substantial package of supports was granted to Departments to assist employment-intensive economic activity in 2020 in the face of the Covid-19 pandemic. The Government increased the overall 2020 capital expenditure allocations by an additional €1.7 billion, bringing total capital investment in 2020 to almost €9.9 billion. This is the highest ever investment in capital projects and programmes in the history of the State.

A review of the NDP has commenced, with the objective of updating the existing plan in line with commitments outlined in the programme for Government. The review will take on board developments since 2018 such as the impacts of Covid-19 and consider important areas such as climate action, housing, balanced regional development, healthcare, transport, education, and the associated resourcing requirements.

The review is being conducted in close partnership with all Departments and relevant agencies and includes a strong element of stakeholder engagement and public communication.

The public consultation element of the review, entitled Review to Renew, was launched last November and will run until 19 February. It offers everyone in the country the opportunity to have their say, to inform and influence important policy decisions, including the distribution of people, jobs, businesses, houses, roads, public transport, education and health infrastructure, as well as social, cultural and sporting facilities.

I take this opportunity to invite stakeholders such as local authorities, community groups and representative bodies to put forward submissions for consideration on what infrastructure projects should be prioritised in the coming years. The updated NDP will be published this summer and will set out the overall capital allocations to 2030 along with five-year multi-annual departmental allocations.

The 2021 draft order sets out the subheads or programmes under which Departments and agencies propose to spend their capital carry-over amounts specified by Vote in the 2020 Appropriation Act. The total level of carry-over sought from 2020 into 2021 is just under €710 million, which is 7.2% of the total gross voted capital allocation for 2020.

The total gross Exchequer capital allocation for 2021 amounts to almost €10.1 billion. The capital carry-over of €709.7 million will bring the total Exchequer capital available for spending in 2021 to more than €10.8 billion. The main priority areas for spending the capital carry-over of almost €710 million include: €214 million, which is being allocated by the Department of Housing, Local Government and Heritage for key areas of activity, including the urban regeneration and development fund, the water programme, local authority housing, pyrite and mica, energy efficiency and peatlands. A total of €151 million will be spent by the Department of Transport on regional and local roads, public transport, rail projects, regional airports, IT upgrades, carbon reduction, greenways, the Irish Coast Guard and cycling and walking projects.

The Department of Enterprise, Trade and Employment will use €106 million of a carry-over for the IDA, Enterprise Ireland, local enterprise development, the Strategic Banking Corporation of Ireland, SBCI loan schemes, Microfinance Ireland and subscriptions to the European Space Agency.

The remaining balance of capital carry-over of approximately €170 million will be allocated to 15 further Votes to continue investment in a range of projects. Departments and agencies have delegated responsibility to manage their capital programmes and projects. The availability of these capital carry-over amounts in 2021 will assist them within this framework in tackling economic and social infrastructural priorities in their sectors. I commend the motion to the House.


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