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

I move: "That the Bill be now read a Second Time."

I am pleased to have the opportunity to introduce the Appropriation Bill 2021 to the House. This Bill is essential financial legislation that must be concluded in the current year. The Appropriation Bill has two primary purposes. First, it provides legal authorisation for all of the expenditure that has occurred in 2021 on the basis of the Estimates voted on by the Dáil over the course of the year. These allocations, known as the amounts to be appropriated for the supply of services, are set out in section 1 and Schedule 1. These relate to the Revised Estimates, further Revised Estimates and Supplementary Estimates agreed by the Dáil. In aggregate, these Estimates amount to €73.1 billion. The comparable amount in the Appropriation Act of 2020 was €69.7 billion. The amount to be appropriated this year, therefore, represents an increase of close to €3.4 billion or just under 5% of last year’s net voted expenditure.

This represents not only the substantial level of support provided to households and businesses in respect of Covid-19 but also the commitment to provide for the necessary infrastructure to support our continuing social and economic progress and significant investment in the delivery of our essential day-to-day public services on which, of course, so many rely.

In aggregate, taking into account expenditure on the Social Insurance Fund and the National Training Fund, total gross voted expenditure made available this year was €88.9 billion. This included substantial provision for the continuation of Covid-related supports, with almost €13.5 billion made available in 2021 for measures to mitigate the impacts of the pandemic. This provision of additional exceptional funding has been critical in supporting citizens and businesses impacted by the pandemic and providing the necessary funding to allow our key public services to respond effectively to the crisis. For example, it has allowed for key income and employment support schemes such as the pandemic unemployment payment, PUP, and the employment wage subsidy scheme, EWSS, to be extended this year. In addition, grants and other supports for businesses and impacted sectors have been provided along wit funding for key public services, including healthcare, education and public transport.

The second key purpose of the Bill is to provide a legal basis for spending to continue into next year in the period before the Dáil votes on the 2022 Estimates. As set out in the Central Fund (Permanent Provisions) Act 1965, the authority for spending in 2022 prior to the agreement of the 2022 Estimates by the Dáil is based on the amounts included in the Appropriation Bill 2021. It is for this reason it is so important the Bill is enacted before the end of 2021. If it were not, there would be no authority to spend any voted moneys from the start of January 2022 until the approval of the 2022 Estimates.

In October, I, along with Government colleagues, launched the revised national development plan, NDP, which set out capital allocations for the next decade as part of an overall €165 billion investment package. In recent years, capital investment has increased dramatically. We are now investing significantly more than the European average. The NDP provides a clear signal to industry of the State's investment profile for the next ten years. This will, in turn, encourage investment and job creation from the construction industry in particular. It is estimated the investment in the NDP will create more than 80,000 direct and indirect jobs in the construction industry alone. It is also estimated that just over €100 billion in direct spending in construction generates a further €60 billion in indirect output throughout the supply chain. When the wider economy outside the construction industry is taken into account, the economic benefits of sustained capital investment by the State are crystal clear and this investment is producing results. It is expected that 20 major projects will be finished this year alone, including the recently opened upgrade of the N4 to Sligo and the north runway project at Dublin Airport. In recent weeks, we saw the completion of the runway reconstruction at Cork Airport. Looking at the education sector alone, an average of 150 to 200 school building projects will be delivered every single year in the period from 2021 to 2025.

I acknowledge there have been challenges relating to spending public money when it has been allocated in the context of capital investment. In recognition of the difficulty faced by Departments in planning for major capital projects, the rolling multi-annual capital envelopes introduced in 2004 allow for carryover of up to 10% of unspent voted capital expenditure from the current year into the following year. This provides a degree of flexibility in terms of capital expenditure planning.

The Bill sets out the capital amounts that are to be carried over to 2022 on a Vote basis. In aggregate, capital carryover from 2021 to next year amounts to €820.1 million, or approximately 7.8% of the overall Exchequer capital programme in 2021. This level of capital carryover into 2022 is broadly in line with the level that was expected at the time of the budget in October. As evident from the monthly expenditure figures throughout 2021, the spending plans were impacted by project interruptions due to the pandemic, largely due to the impact of construction closures on public health grounds in the earlier part of the year.

With just over €820 million in carryover to fund capital investments next year, this will bring the overall amount available to Departments for gross voted capital spending in 2022 to a record €12 billion. This represents a substantial investment as we look both to address the continued challenges posed by Covid-19 and Brexit next year and to support economic, social, environmental and cultural development across all parts of the country under the revised national development plan.

As Minister for Public Expenditure and Reform, I would like to see capital allocations spent in the year they are allocated. Notwithstanding the challenges from Covid in the past two years, there are things we can do to improve capacity in both the public and private sectors so that the ambitious pipeline of projects can be delivered in the next ten years on time and on budget.

As I have previously announced, I will be bringing additional external expertise to the Project Ireland 2040 delivery board which will assist the State in implementing both Project Ireland 2040 and the national development plan. The report of the supporting excellence action team, published in October alongside the revised NDP, examined the capability of the public service to deliver a large-scale capital programme and sets out a number of significant recommendations to support the agenda of improved delivery capability. The range of measures outlined include the development of the commercial skills academy of the Office of Government Procurement to enhance procurement and introduce further legal and planning reforms.

Enhancing the capacity of the private sector is also required to ensure projects are delivered on time and on budget. Increasing the levels of innovation in the construction sector through digital ambition supports will ultimately see public projects delivered to a higher standard using digital efficiencies. Capacity, innovation and digital adoption within the construction sector is increasing through the Government's collaborative approach and continued regular engagement with industry representatives through the construction sector group. In early November, I announced that a consortium led by TU Dublin was the winner of a €2.5 million grant to deliver the build digital project. This project is one of seven priority action points arising from the building innovation report, which drew upon an extensive consultation and international benchmarking process and an economic analysis of the causes of productivity trends in the construction sector. This build digital funding will assist in the effective delivery of projects and, ultimately, in meeting our Project Ireland 2040 and national development plan ambitions.

Schedule 2 sets out the proposed capital carryover amounts. The Revised Estimates Volume for 2022, to be published this week, includes for each Vote availing of the capital carryover facility a table listing by subhead the amounts to be deferred. As in previous years, the Bill provides for a repayable advance from the Central Fund to the Paymaster General's supply account to meet certain 2022 Exchequer liabilities due for payment in the first week of January. The need for this provision arises because, with the banking system closed on Monday, 3 January, funding will need to be in place in departmental bank accounts before the end of this year to meet those liabilities on a timely basis. There is also a need to pre-fund An Post to meet certain payments due between 1 and 5 January 2022 so that payments can be transferred from the Department of Social Protection to the network of post offices throughout the country. Section 3 provides for up to €292 million to be advanced from the Central Fund to meet these requirements, with this advance then being repaid to the Central Fund in January 2022.

The annual Appropriation Bill is an essential element of housekeeping undertaken by the Dáil each year. The passage of this Bill will authorise in law all of the expenditure that has taken place in 2021 on the basis of the Estimates voted on by the Dáil in the course of the year. Importantly, it will also ensure voted expenditure can continue into 2022 in the period before the Dáil approves the 2022 Estimates. This means keeping our public services, such as schools and hospitals, operating, as well as continuing payments funded from voted expenditure in 2021, such as the employment wage subsidy scheme and other social assistance scheme payments.

I commend the Bill to the House.

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