Dara Calleary (Mayo, Fianna Fail)
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1. To ask the Minister for Public Expenditure and Reform the source of the extra funding to pay for the Labour Relations Commission's decision regarding the Garda associations and for the recent deal with the Irish Congress of Trade Unions, ICTU; if he has had discussions with line Ministers regarding the potential impact of the revised allocation on their departmental budgets; and if he will make a statement on the matter. [3597/17]

Dara Calleary (Mayo, Fianna Fail)
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I ask the Minister to outline where he intends to find the €120 million announced last week regarding an extension of the terms of the Lansdowne Road agreement and the €25 million that is part of the Garda settlement that is being assigned to general expenditure.

Paschal Donohoe (Dublin Central, Fine Gael)
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The requisite funding in respect of the recent Government decision for an additional payment to public servants with annualised salaries of up to €65,000, as provided for under section 6 of the Lansdowne Road agreement, will be met from available public resources, taking into account the scope for the reallocation of expenditure while ensuring that core public services are not adversely affected. Regarding the separate Labour Relations Commission decision in favour of increased Garda remuneration, the Government agreed in December to fund half of the estimated €50 million cost of this recommendation, with the balance to be met from savings within the Department of Justice and Equality group of Votes to be achieved during this year. The additional funding of €25 million from the Exchequer was provided in the Revised Estimates Volume, which was published before Christmas.

The extent to which Departments are in a position to meet the additional cost of the broader recommendation with unions will only be determined later in the year. The Government will monitor the position closely and consider how best to meet any additional funding requirements where the need arises. However, given that the additional cost represents 0.2% of total gross voted current expenditure, most Departments should be accordingly in a position to absorb the additional costs arising from this decision. As reported in the end-December Exchequer returns, savings of €168 million were achieved in 2016, which is less than the sum of money in consideration for this year.

It is important to note that this is effectively a once-off additional payment for 2017; it is not a recurring payment. This is because the payment will be replaced by the already scheduled and budgeted payment for public servants on similar terms of €1,000 to annualised salaries up to €65,000 from 1 September 2017. The carry-over costs into 2018 of this payment have therefore already been provided for in respect of the Lansdowne Road agreement for 2018.

Dara Calleary (Mayo, Fianna Fail)
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I will read to the Minister a comment by the Fiscal Advisory Council:

For 2017, the ... fiscal space under the rules has already been allocated in budget 2017 for tax cuts and expenditure increases. As a consequence, any new increases in expenditure, such as to fund higher public sector pay, imply lower spending in other areas unless offset by compensatory tax changes.

Can the Minister give a guarantee that there will not be any impact on services delivered by any Department in this regard? I am concerned that we are now coming into the beginning of the second month of the year and that he has allocated €120 million worth of expenditure in respect of which he still does not know where it will come from.

Finally, I ask him to comment on the overnight development regarding the HSE's decision to withdraw its appeal to the Workplace Relations Commission regarding the payment of consultants and the potential this may have for a necessary increase in the Department of Health budget. Will he outline the Government's strategy for dealing with this position?

Paschal Donohoe (Dublin Central, Fine Gael)
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I will begin with the matter on which the Deputy concluded. I will not comment on the details of the two individual cases that were agreed overnight. However, I want to be very clear to the House that the Government will vigorously defend our case regarding consultant contracts over the coming period. As we move into the period of defending our case in this regard, the Department of Health, the Department of Finance and my Department will be parties to that case and we will vigorously defend our views and our legal case regarding this matter.

Regarding the two other areas the Deputy has raised with me, I have outlined a process whereby throughout the year I will identify this funding and I will be accountable to him and to the House in that regard. The other challenge I face is that if I had not made this agreement, I could have faced far greater uncertainty in the public finances for 2016.

Dara Calleary (Mayo, Fianna Fail)
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I will focus on the case because the Minister has left many unanswered questions about it. How can he say the Government is vigorously defending a case when it has withdrawn the appeal? I do not want him to comment on the two specific cases but I do want him to comment on the reports we are seeing across all the media today that this could cost up to €350 million.

David Cullinane (Waterford, Sinn Fein)
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Yes.

Dara Calleary (Mayo, Fianna Fail)
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The Government has lost the case. Given the fact that it has withdrawn the appeal against the case, the notion of vigorously defending its case seems rather hollow. I appreciate the Minister cannot comment on the two specific cases, but what are the overall implications of this decision not to proceed with the appeal? What are those implications for the health budget in 2017, 2018 and beyond? When will we have a strategy from the Government as to how it will deal with this? Will that strategy impact on services that are already in crisis in the health sector?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have been very clear about what we will do in this regard. I have commented on two individual cases that reached agreement over the past 24 hours, but my comments refer to those cases that are to come, of which there are a significant number. The Government will make very clear that we will robustly defend our views regarding consultant contracts, which date back to 2009. This is an issue that has been going on for a number of years. I will not comment on the terms and settlements regarding those individual cases that were settled. That would not be appropriate. To deal with the question the Deputy has just asked me about the cost, it would be absolutely irresponsible of me to come into the Houses of the Oireachtas and outline a liability regarding cases which the State will defend and in respect of which we will make very clear our robust views. I am happy to confirm this to the House.