John Deasy (Waterford, Fine Gael)
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Question 73: To ask the Minister for Foreign Affairs why the Revised Estimate volume published by the Department of Finance reveals that Vote 29 covering international co-operation details that spending on administration will rise by 9% in 2010 while actual overseas aid spending will be reduced by 6.4%; and if he will make a statement on the matter. [13399/10]

Micheál Martin (Cork South Central, Fianna Fail)
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The Revised Estimate volume published by the Department of Finance last February shows a gross allocation to Vote 29 - international co-operation - of €536 million. A further estimated €135 million is set to come from other Departments which, together with Ireland's share of the EU Development Cooperation budget, brings the total 2010 estimated allocation for Official Development Assistance to €671 million. The 2010 ODA allocation therefore involves a relatively small reduction of €25 million, or about 3%, on the 2009 level. Based on current estimates this level of funding will stabilise Ireland's ODA at 0.52% of GNP. We also expect that this level of funding will ensure we exceed our commitment as an EU Member State to spend 0.51% of GNP on ODA in 2010.

Of the total Irish Aid budget, €35.2 million is allocated to the administration subheads within Vote 29. This is 2% down from the 2009 allocation of €35.8 million. The final outturn for expenditure on administration in 2009 the total spend was in the region of €32.2 million, a saving of €3 million on the estimate. This saving was delivered through prudent management of the administrative budget. We will again make every endeavour to effect further saving on the administrative budget in 2010 as we did successfully in 2009.

The administration subheads cover the management, audit, evaluation, ongoing monitoring and administrative oversight of the aid programme, both at headquarters and in the field. The administrative budget is the key instrument for quality assurance and effective delivery of the aid programme. The allocation for these subheads is the key requirement to ensure the effective delivery of the aid programme in some of the most difficult operating environments in the world. The administrative budget is essential to ensuring proper planning, audit, monitoring and evaluation of the aid programme.

Reviews of our aid programme have placed it among the best in the world. However, the importance of overall management and evaluation capacity has been emphasised, including by the Audit Committee. Therefore it is essential, even in these difficult economic times, to ensure adequate resources to manage the aid programme to the highest levels of accountability.

John Deasy (Waterford, Fine Gael)
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This is an issue I raised with the Minister last year, in committee. It does not sit well with the situation that some of the NGOs find themselves in, right now, when they tell us, continually, that they are laying people off in our programme countries, hundreds in many cases. They have had to slash their administrative budgets by so much while at the same time they have lost at least 20% to 25% of the income they would get from the public.

It does not sit right when one gets the figures - I got those from the Department's website – and sees that administration is going up, while at the same time the overall aid budget has gone down. I do not argue with the Minister as regards the need for planning, monitoring and auditing, which all require an administrative budget. At the same time, however, it is very hard to reconcile an increase in administration within this area. It is almost as if the Government sector was working in a different paradigm when it comes to the private sector and the NGO sector with regard to the financial cost of administration.

Micheál Martin (Cork South Central, Fianna Fail)
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As a percentage of the overall budget, the NGO sector does better in this country than in almost any other within the OECD. I believe that up to 20% of our budget goes to the NGOs, which is very high. That is something that should be acknowledged.

In terms of the administrative budget here, from about 2007-10, and particularly from 2008 to date, it has been hovering around the €35.708 million or €35.8 million mark, but the actual outturn was lower. The Deputy is comparing the figures to the outturn, not the original Estimate, and we are determined to bring in the administration budget again below the Estimate for 2010, so that the outturn at the end of the year is lower than what is actually provided for.

Deputy Deasy has been one of the strongest advocates for good governance of the aid programme. One of the criticisms of our programme in recent years was the fact that it grew very significantly over the last seven to eight years without any significant corresponding administrative increase. There was an administrative increase, but not at the levels the increased budgets, perhaps, necessitated.

The administrative budget is the engine of governance as regards this programme, which is still relatively large in budgetary terms. I should also emphasise that we compare favourably to the DAC average of 4.4%. To give the Deputy an example of what other OECD Development Assistance Committee donor countries spend on administration, as a percentage of total ODA in 2008, Finland is at 6.4%, Denmark is 4.9%, Sweden is 4.8% and Norway is 5.3%. Ireland is at 3.8%, so we are well below those countries in terms of the total OFA allocation actually spent on administration.