Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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108. To ask the Minister for Public Expenditure and Reform if public expenditure for 2021 is within profile; and if he will make a statement on the matter. [32332/21]

Catherine Connolly (Galway West, Independent)
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This question is being taken by Deputy Lahart.

John Lahart (Dublin South West, Fianna Fail)
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I thank the Leas-Cheann Comhairle for facilitating me in taking this question for my colleague, Deputy Jim O'Callaghan, who has responsibilities elsewhere this week. The question relates to whether public expenditure for this year is within profile. Will the Minister give us a picture of below-profile spending and some of the reasons behind it, if he has been able to garner them at this stage?

Michael McGrath (Cork South Central, Fianna Fail)
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I thank Deputy Lahart for raising the question on behalf of our colleague, Deputy Jim O'Callaghan. The Revised Estimates for Public Services 2021 outlined an overall Government expenditure ceiling of €87.8 billion. This provided for both an increase in the core expenditure allocations to Departments and for almost €12 billion in funding to respond to Covid-19 and Brexit.

In 2021 to date, Covid-19 has continued to pose a huge challenge for society and continued measures have been necessary to support our people, businesses and the delivery of public services. Within the overall expenditure ceiling, €5.4 billion was set aside in reserve to be used as required during the year for temporary targeted measures to mitigate the impacts of Covid-19. This reserve was partially utilised to fund the extension of the PUP and the employment wage subsidy scheme to the end of June. In this regard, and including expenditure of the Social Insurance Fund, the further Revised Estimate for the Department of Social Protection, presented to Dáil Éireann recently, reflects additional gross expenditure of €4 billion. In addition to this, further Departmental Estimates will be presented to the Dáil in due course, reflecting the various measures set out in the national economic recovery plan.

Given the exceptional level of funding being provided this year, careful monitoring of spending against profile and progress on programmes and projects is required. It is a key responsibility of every Department and Minister to manage expenditure within their respective allocations. During 2021, the main spending Departments will be reporting to government quarterly on their respective areas.

Based on departmental Estimates presented to the Dáil to date and as set out in the most recent Fiscal Monitor, total gross voted expenditure to the end of May amounted to nearly €33 billion. While this is nearly €1.5 billion ahead of the same period in 2020, the public health restrictions in place this year have impacted on spending plans of Departments. Accordingly, gross voted expenditure is running almost €1.4 billion or 4% below profile at the present time.

John Lahart (Dublin South West, Fianna Fail)
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I thank the Minister for his response. I also thank him, on behalf of my constituents, for his capable and prudent management of his responsibilities in respect of public expenditure. We all know the enormous resources that have been devoted to supporting people, their jobs and businesses over the past 15 months. There is not a constituency that has not been impacted positively. I have heard very positive feedback, particularly from businesses in relation to Government supports and how they helped them to survive.

Nonetheless, it would appear that many Departments have been spending significantly below profile in the period to the end of May 2021, as the Minister outlined. While I know that may appeal to the chartered accountant in the Minister, as will the way in which those underspent resources could be utilised in a positive way, what is the Minister's view of the underspend in areas such as health or social protection? Does he see any underlying reasons for it? Does he envisage those moneys being available at the end of the year or being expended by the end of the third and fourth quarters?

Michael McGrath (Cork South Central, Fianna Fail)
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It is important that we look at the overall context. As I stated, the expenditure ceiling for 2021, as agreed in the Revised Estimates Volume published late last year, is just under €88 billion. However, it is expected that this level of expenditure will be exceeded over the course of 2021. For example, in respect of Covid-related costs, we had made provision for around €12 billion of expenditure, given the length of the restrictions that were imposed in the early part of the year. The decisions made in the national economic plan to extend supports in some instances to the end of the year means that the Covid-related expenditure is now more likely to be around €15 billion rather than €12 billion.

Some of the underspends require context. In the case of the Department of Social Protection, the reason for the underspend is that we transferred an extra €4 billion into the Department recently through further Revised Estimates. In other Departments there are underlying underspends, which the Deputy correctly highlighted. While I am a chartered accountant, as a Minister, I want to see Departments meet their policy objectives and spend the money allocated to achieve Government policies. We are continuing to monitor that and keep it under review.

John Lahart (Dublin South West, Fianna Fail)
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From this vantage point, how does the Minister envisage this playing out until the end of the year? Will Departments meet their spending targets? If not, how will those moneys be used? Will they be transferred to other capital projects, for example?

To date this year, the underspend in the Minister's Department is 11%. Can he paint a picture of how he thinks the figures will look at the end of the year?

Michael McGrath (Cork South Central, Fianna Fail)
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It is important to bear in mind that we are working from information based on five months of the year. When it comes to managing expenditure, Departments will have expenditure pressures at different points in the year. The spending is not always evenly spread throughout the year. At this point in time, our expectation is that most Departments will be in a position to spend their full allocation on the policies the Government wishes to have pursued. When it comes to capital expenditure, there will be pressure because of the shutdown of construction earlier in the year. That explains why there are significant underspends. There is a carry forward facility, as I noted previously. We carried forward over €700 million in unspent capital from last year into the current year. That increases the amount of funding that is available to be spent, but there is a limit. It is 10% of the budget within the Vote head that can be carried forward.

Every Department has its own individual story to tell. The overall picture is of very elevated Government expenditure to meet the challenges we are facing in the context of the Covid-19 pandemic.