Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy for raising this issue. I thank the Defence Forces for the essential and extraordinary role that they have played in the pandemic, especially in testing and tracing, and stepping up to assist with the quarantine system and vaccinations. Their logistical support has been consistent throughout the pandemic.

The issue that the Deputy raises has come up on a number of occasions. He referred to Deputy Nash's parliamentary question and the reply. I will try to clarify it for the Deputy and maybe make some additional comments. Defence has two Votes. The main one is Vote 36 - Defence, which includes pay. The second is Vote 35 - Army Pensions. Over the period in question, from 2013 to 2020, a total of €130 million was surrendered from Vote 36. This was the figure referred to in the parliamentary question reply from the Minister for Public Expenditure and Reform to Deputy Nash. This comprises a number of parts and does not necessarily mean there are underspends in the Department.

Traditionally pensions are difficult to forecast and tend to run ahead of what is provided. This requires a transfer of funds from Vote 36 to Vote 35. Vote 36 surrenders funding to the Exchequer and Vote 35 is granted a Supplementary Estimate of the same amount. Therefore, of this €130 million, €47.7 million was surrendered to increase Vote 35 by this amount. This shows up as money handed back to the Exchequer, if one looks at Vote 36 in isolation. If one looks at Vote 35 and Vote 36 together, nothing is handed back to the Exchequer. The reality is that this money is reallocated from one Vote to the other within the defence ministerial Vote group.

Of the €130 million, a further €74.5 million relates to excess appropriations-in-aid. The Department receives receipts annually, such as from the United Nations, referred to as appropriations-in-aid. When a Vote receives more revenue through appropriations-in-aid than what was provided for, this is known as surplus or excess appropriations-in-aid. In this instance, the Department's receipts were €74.5 million more over the period than it had projected. As a consequence, that €74.5 million was handed back to the Exchequer. As with all other Departments, surplus appropriations-in-aid encompassing these receipts cannot be used as additional expenditure on a Vote under public accounting procedures. If the surrendered amounts due to matching excess spending on pensions, and due to surplus compared with anticipated receipts not being factored into spending plans, are excluded from the calculation, the Department of Defence advises that the underspending over the period compared with planned spending plans is only €7.9 million from an allocation of €5.7 billion, which represents just over 0.1% over the eight-year period.

I suggest that we could seek further clarification from the Minister, Deputy Michael McGrath, and the Minister for Defence. I might join in on that meeting because this is a potentially an issue of forecasting too and may get into the detail of the areas where the underspending occurred. There is a genuine issue, as there has always been, with forecasting pensions, and there is a legal requirement regarding appropriations-in-aid.

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