Barry Cowen (Offaly, Fianna Fail)
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58. To ask the Minister for Public Expenditure and Reform the controls in place to prevent Departments from breaching their expenditure ceilings in a given year; and if he will make a statement on the matter. [49187/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Managing the delivery of public services within allocations forms a key part of the responsibilities of every Minister and Department. My Department is in regular contact with all other Departments and offices to ensure that expenditure is being managed within the overall budgetary parameters. The drawdown of funds from the Exchequer is reported on each month against expenditure profiles in the Fiscal Monitor published by the Department of Finance.

As set out in the most recent Fiscal Monitor, total gross voted expenditure at the end of October was €49,931 million. This is broadly on profile. Gross voted current expenditure of €46,181 million was 0.6% above profile, with gross voted capital expenditure of €3,750 million 8.4% below profile.

However, given the scale of Government expenditure and the cash basis of Government accounting, the need for Supplementary Estimates can arise for a number of reasons, including policy decisions, timing issues and overspends. They are a budgetary tool that can allow for the proper alignment of funding allocations with planned expenditure. They can only be allowed where they can be accommodated within the overall budgetary parameters. The Expenditure Report 2019 outlined the requirement for Supplementary Estimates in 2018, including for the provision of a 100% Christmas bonus for weekly social welfare recipients and additional investment in key areas including housing and health.

Taking the additional expenditure set out in our 2019 report into account, it is now projected that the general Government deficit target of 0.2% outlined in the summer economic statement will be over-achieved, with the expectation now of a general Government deficit of 0.1%.

Barry Cowen (Offaly, Fianna Fail)
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This question is primarily related to the overspend and the excess in respect of the Department of Health that we have seen in recent years. Is it definitive that the Department of Health will be over budget this year by approximately €700 million? They are not necessarily budget expenditure ceilings. They appear to be negotiated ceilings. In respect of the Department of Health, it is inevitable that it will exceed its expenditure ceiling, not through any fault of its own but that the budgeted ceiling was meaningless to begin with. In acknowledgment of that fact, there appears to be no enforcement procedures, which can make a mockery of the initial expenditure ceiling we talk about. What assurances can the Minister give that this is not the case and that the expenditure ceilings are an important control over expenditure?

Paschal Donohoe (Dublin Central, Fine Gael)
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The reality is that the expenditure ceilings the Deputy is referring to are both negotiated ceilings and budgetary ceilings. Budgetary ceilings, and the figures we set for 2019 and beyond, are a consequence of Government making decisions regarding where resources need to be allocated, overlaid with the inevitable political negotiation that happens, particularly in late September and early October.

In terms of our adherence to those ceilings, most of the Departments deliver them most of the time. The key issue we have had is in respect of the Department of Health, which has exceeded its expenditure ceiling, in particular this year, by a far larger amount than we experienced last year.

In terms of what we are looking to do differently to manage that issue, I expect we will enter next year with a board, a chief executive and a chairperson for the HSE. That will enable a better degree of budgetary control than we have had this year and, hopefully, a renewed focus on where we are with budgetary targets, given the great difficulties the HSE had to deal with earlier this year.

Barry Cowen (Offaly, Fianna Fail)
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I would like to think that would be the case, and I sincerely hope it is, but it has not been in recent years. We get the kickback from the public when they hear about an excess expenditure over either negotiated or budgeted ceilings in various Departments. They do not see that on the ground, and they do not see it in respect of health. Perhaps the HSE was right and it has cost €700 million to stand still. There is a big hoo-ha about the finance sought by the HSE being made available to it but, at the end of the day, we do not see the improvements that are necessary for delivery in the Department of Health. People then become frustrated to hear about that. It is the same in the Department of Education and Skills, which is €69 million over the ceiling to date this year. The figure for last year was €60 million. The figure for the Department of Health this year to date is €340 million, and possibly €700 overall; that is the estimate. The Department of Housing, Planning and Local Government was €385 million over the ceiling in 2017. Again, people do not see that reflected on the ground. They do not see the amount of social and affordable housing that is necessary being provided. They see the delays associated with it and so forth. Apart from what the Minister said relating to the Department of Health and the expectations of those in senior offices, what controls can he put in place to ensure that either negotiated or budgeted ceilings, or a combination of both, might be adhered to in the future?

Paschal Donohoe (Dublin Central, Fine Gael)
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The controls we have work for nearly all Departments most of the time. The key issue we have had has been in respect of the Department of Health. I have outlined the way I am looking to handle the matter differently in 2019. I make the point, however, that myself and the Minister, Deputy Harris, were successful last year in significantly reducing the need for a Supplementary Estimate. We now need to examine what worked last year and how we can put in place a different approach for next year, and I have outlined that.

Regarding the other two Departments the Deputy mentioned, where I differ from the Deputy is that we can see a significant shift in the number of new homes being delivered. By the end of this year, we will see up to 20,000 new homes being delivered. Next year, we will see that figure increase to 23,000 to 25,000, with between one in four to one in five of those being social homes built directly by the State. There is a clear output from the capital investment in the Department of Housing, Planning and Local Government.

In terms of the Department of Education and Skills, the environment that anybody experiences, particularly in primary schools in the morning, shows that this is money that is making a difference to the day-to-day lives of our younger citizens.