Cathal Berry (Kildare South, Independent)
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107. To ask the Minister for Public Expenditure and Reform the amount that was returned unspent by the Department of Defence from 2022; if any of this money was from pay savings due to the significantly under strength Defence Forces; and if he will make a statement on the matter. [2528/23]

Cathal Berry (Kildare South, Independent)
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I thank the Minister for that point of clarification. My question relates to the defence budget. Specifically, I would like to know if any unspent money was returned to the Exchequer by the Department of Defence at the end of last year. If so, where did that money come from? Was it from so-called pay savings, whereby the underspend in defence was as a result of the Defence Forces being under strength? Such savings are normally used for alternative purposes like capital expenditure or equipment.

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the annual defence sector budget, comprising Vote 35, Army pensions, and Vote 36, defence, is determined within the overarching budgetary framework and approved by Dáil Eireann, having regard to the level of resources available and defence policy requirements, with multi-annual capital envelopes determined as part of the overarching national development plan, NDP. It should be noted that 2022 expenditure figures are not yet definitive. Provisional outturn figures for last year are due next month and the appropriation accounts are due for publication in September. My response to the Deputy's question is given with that caveat.

The expenditure returns for December indicate a total gross underspend of €1.58 million in 2022 on the Army pensions Vote. The expenditure returns for the defence Vote indicate a total gross underspend of €497,000 in 2022. The underspend is mainly attributable to pay savings which arose due to the actual strength numbers being significantly below the target establishment strength of 9,500 personnel.

In previous years, a long-standing arrangement existed by which pay funding was allocated for establishment Permanent Defence Force, PDF, numbers of 9,500. However, this funding model was changed for Estimates 2023 in the circumstances where actual numbers were considerably lower than the establishment number and stood at 8,049 at the end of November 2022.

Estimates 2023 allocated an additional €93 million towards the defence Vote group. Pay is now allocated for actual numbers and expected recruitment intake in 2023. For 2023, a net additional 400 recruits is projected for the Defence Forces. Pay savings of approximately €26 million arose in 2022 in respect of the PDF. With appropriate consents, the majority of these pay savings were reallocated to address spending pressures elsewhere, including Defence Forces capability development for the purchase of defensive equipment, aircraft, naval vessels and consumables.

The Department of Defence has advised that there were over 7,000 applications to join the Defence Forces in 2022. The Commission on the Defence Forces published its report in February 2022. The Government published its response and associated high-level action plan in July last year. My Department has now sanctioned all three early action pay measures, with some further actions under analysis. I am committed to supporting a modern and effective Defence Force. My Department is represented on a high-level steering board and implementation oversight group which will provide additional support for the implementation of the action plan.

Cathal Berry (Kildare South, Independent)
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I thank the Minister for that detailed response. There are a lot of figures there. I will try to get my head around it. I tabled the question arising from an article by Ken Foxe, published in the Irish Independenton 1 January, in which he outlined correspondence between Jacqui McCrum, Secretary General of the Department of Defence, and presumably the Secretary General of the Department of Public Expenditure and Reform. I am looking for clarity on whether the recoupment of those pay savings apply to 2022 or 2023. My understanding from the Minister's reply is that they will be applied prospectively in dealing with 2023 only, and not 2022. I emphasise that it is obvious the Defence Forces are in desperate need of funding. If approximately €30 million is taken out of the budget for 2023, perhaps we might be able to allocate that somewhere else from the outset. I will read the Minister's detailed response and may follow up with him afterwards.

Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy. The aim of the decision that has been made here, which I believe is the right one, is to put in place a more realistic assumption regarding what recruitment will be in the time ahead so that it is a better foundation on which to build the Estimate for the Defence Forces and the Department of Defence. As the Deputy is aware, there is a commission in place with regard to how we can strengthen the Defence Forces. I thank him for his involvement in that. It has led to a number of commitments being made regarding spending in the time ahead. In that context, it appears appropriate, therefore, to have a more realistic recruitment number in place, off which we can better plan this Estimate.

Cathal Berry (Kildare South, Independent)
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For clarity, I wish to emphasise in my final wrap-up that Ireland spends approximately one third of the EU norm on defence. This funding is desperately needed. The Minister referred to the modernisation and reform programme announced only six months ago that has to be funded. The war in Ukraine is likely to intensify significantly in March, with spring offensives. We have no idea where that will end up. We desperately need this money. I will read the Minister's written response and follow up afterwards.

Paschal Donohoe (Dublin Central, Fine Gael)
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We are very much aware of the competing pressures the Defence Forces are facing at the moment and the changing security environment the country is in. As I stated, it appears to me that good practice is being asserted here in ensuring there is a feasible figure in place regarding recruitment. In the context of the other commitments that have now been made to the Defence Forces, this appears to be a very appropriate and realistic decision to make. I look forward to engaging with the Deputy on the matter in the time ahead.