Seanad debates
Thursday, 24 November 2005
Estimates for Public Services 2006: Statements.
11:00 am
Brian Cowen (Laois-Offaly, Fianna Fail)
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I welcome this opportunity to address Seanad Éireann on the Government's pre-budget Estimates for 2006. Before I proceed to outline the Government's spending plans for next year, I would like to review the economic and budgetary outlook and the background to the 2006 Estimates. In framing the Estimates, the Government has continued its policy of prudent management of the economy and public finances. We will comfortably achieve our budget targets for 2005. With tax revenues for 2005 running strongly ahead of projections we will have a higher current budget surplus than was forecast at budget time last year.
As a result of these policies, we have achieved sustained economic and social progress over the past decade. Our economic growth rate of 7% has been more than twice the EU average since 1997. At the end of this year, our debt to GDP ratio, at about 29%, will be one of the lowest in Europe. We are effectively a full employment economy. There are now around 500,000 more people at work compared with 1997. Over 720,000 income earners are likely to be out of the tax net this year compared with 380,000 in 1997, when we took office.
The pursuit of prudent fiscal policies has also generated the resources to enable the Government to make real improvements in day-to-day services and to target priority social needs. On a pre-budget basis, gross current expenditure in 2006 at €42.2 billion will have increased by two and a half times the 1997 level. These increased resources have financed real improvements in public services and made a real difference to the quality of people's lives.
We have provided for significant increases in social welfare payment rates. The rate of payment of the old age contributory pension has been increased from €99 per week in 1997 to €179.30 in 2005. This is a nominal increase of 81% at a time when cost of living increases were just under 40%.
The rate of payment of child benefit for a first and second child in 1997 was €38 and this has now risen to a rate of payment of €141.60 in 2005, an increase of 185% in real terms. We have reduced the pupil-teacher ratio at primary level from 22.3:1 in 1996-97 to 17:1 in 2003-04 and at second level from 16:1 to 13.6:1 in the same period.
The Government has increased frontline staff in the health service from 76% of total staff in 1997 to 80%. These include 2,000 additional medical and dental personnel, almost 7,000 additional nurses, 620 additional consultant posts, bringing the total to 1,947, as well as nearly 7,000 other health professionals such as speech and language therapists, physiotherapists and social workers. Patient discharges from hospitals in 2004, in-patient and day cases, increased by 4.4% over 2003. In line with international best practice, the emphasis is on day work and these discharges increased by 8% in the same period.
Investment is critical to supporting sustainable economic growth and national competitiveness. The Government has more than trebled Exchequer capital investment from €2 billion in 1997 to almost €6.6 billion, including capital carryover, in 2006. More than 70 national roads projects totalling over 500 km. have been completed since 1997, including 280 km to motorway or dual carriageway standard. Service enhancements include the doubling of the capacity on the DART and the Luas now carries an average of over 65,000 passengers a day. Over 45,000 social housing units have been built, while €8.5 billion will have been invested in our schools, hospitals and other facilities in the health and education areas since we came into office.
Gross public expenditure is expected to be around €45.5 billion in 2005. It is expected that there will be a small underspend on current expenditure of around €75 million. Exchequer capital spending this year will be almost €6 billion, including carryover of €237 million from 2004, an increase of 15%. The multi-annual system for managing capital with its 10% carryover arrangement facilitates better management of capital programmes and projects. It ensures that significant amounts of money are not lost to the capital budget and, as a result, €286 million of capital not spent in 2005 will be available to Departments for spending in 2006.
The 2006 pre-budget Estimates provide for gross expenditure of around €48.5 billion. Of this figure, €42.2 billion is current and €6.3 billion is capital. It represents an increase of almost €3 billion over 2005 or around 6.6%. Some €2.7 billion of the overall additional spending provision of €3 billion in 2006 is allocated to day-to-day public services, bringing the total gross provision to €42.2 billion for the year. This is a 6.9% increase on the 2005 forecast outturn. Nearly €1.9 billion, or 70%, of the additional €2.7 billion is provided for three priority areas, namely, the social welfare allocation for 2006 is €12.4 billion on a pre-budget basis; the Department of Health and Children allocation will be over €12 billion, an increase of €750 million or about 9% on an underlying basis when account is taken of a number of exceptional one-off expenses this year in respect of the establishment of the HSE; and the Department of Education and Science allocation in 2006 will increase by €530 million, or about 8%, to €7.2 billion. I will make additional provision for social welfare payment rates on budget day to build on the substantial improvements in welfare provision already made by this Government since 1997.
In addition to this €750 million increase on health spending, a provisional allocation of €400 million is being made in 2006 towards the cost of repaying charges for long-stay care in former health board funded institutions. Some €250 million is included in the allocation for service improvements including, among other things, disability and mental health services, the commissioning of new units, primary care services, and medical education and training. The increases in disability services are over and above the package announced in the budget last year.
The €530 million increase in current funding for education will allow for service improvements in key areas such as a one point reduction in the staffing schedule for primary schools with effect from September 2006, as well as a further one point reduction in 2007, creating about 200 additional posts in primary schools in both 2006 and 2007. We are also providing for the full year cost of 590 additional resource teachers for pupils with special needs appointed in September 2005.
One in five teachers in our primary schools is dealing specifically with special needs. The cost of 270 new posts is also being provided under the programme for delivering equality of opportunity. The "three for two" arrangement on school buses is being phased out by December 2006. There will be an increase of 10.8% in funding for capitation grants for the maintenance and upkeep of our schools, while there is also an increased provision for third level research and development, in line with strategic needs of the economy.
In the justice area, the provision for current spending on the Garda Vote is being increased by €105 million, or 9%, to €1.3 billion. This will facilitate the implementation of the Government's commitment to expand the force by 2,000 to a new complement of 14,000. The 2006 provision will allow for the employment of 12,920 gardaí, an increase of 700 on 2004, or 2,000 on 1997 levels. Expenditure on child care in the Estimates has increased from €500 million in 1997 to €1.3 billion before the budget. I will make further provision for child care on budget day. The 2006 allocation for the equal opportunities child care programme is more than €100 million. Some €55 million in current spending will be provided for staffing grants to community child care facilities and supports to city and county child care committees, and an additional €47 million will be provided for capital spending. We envisage the creation of 15,000 extra places during this period. The 2006 pre-budget capital allocation will bring the number of extra child care places funded under the programme from none in 1997 to approximately 30,000 by the end of 2006. That child care programme began in the National Development Plan 2000-2006.
Expenditure on the provision of services for people with disabilities will come to approximately €3 billion this year, which constitutes an increase of more than €400 million over the 2004 figures. The 2006 Estimates provide for spending of almost €3.3 billion for disability specific services. This is an increase of €300 million or 10% and, as I have stated, includes €135 million under the special disability package announced in my last budget.
As for overseas development aid, the Government has committed itself to reaching a target of 0.7% of GNP by 2012 as well as an interim target of 0.5% of GNP by 2007. This will involve increasing the present provision of €500 million to €1.5 billion during that time. Next year's Estimates provide for a total commitment of €675 million, or 0.47%, of GNP for overseas development aid in 2006. This represents an increase of €129 million, or 24%, on the allocation this year, which came to €546 million. Ireland's contribution rate at 0.47% of GNP compares favourably with current indicative figures of 0.19% in the United States, an average of 0.3% in the OECD and an average of 0.43% in the EU for 2006.
With regard to capital spending, I will announce a new five year capital envelope from 2006 to 2010 on budget day. This will be consistent with the Government's overall priority commitment to capital investment. It will also incorporate the increased investment on transport within the Transport 21 framework. The total cash spend on investment on a pre-budget basis in 2006 will come to almost €6.6 billion, including the €186 million carryover from 2005 to 2006. This is an increase of almost €600 million, or 10%, over 2005, before any budget day additions.
The Government is committed to achieving value for money from public expenditure for the taxpayer. We have introduced a number of reforms in recent years such as the five year multi-annual capital envelopes, revised capital appraisal guidelines and planned improvements in construction and construction related contracts. Already, we see evidence of significant improvement in the management of capital projects. Of the 23 major roads projects under way under the aegis of the National Roads Authority this year, a total of 19 are either on or below budget and will be delivered on or ahead of schedule. While total project costs for all 23 projects this year was taken to be €1.18 billion, the outturn cost is expected to be €1.17 billion. Hence, that simple statistic gives the lie to the idea that the Government is incapable of managing major projects.
Building on recent reforms, we announced two new initiatives to further improve the approach to securing value for money, namely, an initiative on management of information and communications technology projects and consultancies as well as additional general measures on value for money, which I announced on 20 October this year. Departments have been asked to give effect to the measures which can be implemented immediately and work is under way with regard to updating the necessary guidelines and other required steps to implement all these measures.
With regard to public service pay and numbers, the gross provision for 2006 to fund public service pay and pensions is €16.4 billion, an increase of €1.1 billion, or 7%. It makes full provision for the final phase of Sustaining Progress and includes some €430 million for service improvements and extra numbers. The extra numbers are primarily employed in a front line capacity in health, education and the Garda. The percentage of total Government expenditure in respect of pay and pensions remains under 40%, which was also the position when the Government came to office in 1997.
The suggestion that pay has become a bigger component of total expenditure is not statistically correct. Despite the contrary perception created in some quarters, there has not been an increase in the share of overall current expenditure attributable to pay and pensions. In 1997, this came to approximately 40% of gross current spending and next year, on a pre-budget basis, it will come to almost 39%.
While the Government remains committed to controlling public sector numbers as part of its approach to managing public expenditure and securing better value for money, the policy is not implemented indiscriminately. Where necessary, the Government has been prepared to increase numbers to meet priority requirements in front line and essential services. The total number employed in the public service in 2005 comes to just over 290,000. We have held numbers in the Civil Service, the local authorities, defence and the non-commercial semi-State sectors below their 2002 levels. However, as I already mentioned and given the service improvements I have outlined, we have allowed increases in front line staff in the key areas of health, education and the Garda. The Opposition calls for more services while simultaneously criticising the Government for employing people to implement and provide such services. I have yet to work out its formula, whereby services will be provided in health and education without the employment of human beings.
We will provide some €3 billion in additional resources, bringing the total 2006 provision for public service spending on a pre-budget basis to €48.5 billion. The Government's fiscal and economic policies have transformed the economy and have led to significant economic and social progress. Naturally, challenges remain which we must meet. We will see further progress when I make additional provision on budget day for social welfare, child care, care of the elderly and capital investment. I commend the Government's pre-budget 2006 Estimates to the Seanad as figures for which any of my colleague in Europe would give his or her eye or teeth.
John Paul Phelan (Fine Gael)
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Which colleague in Europe does the Minister have in mind?
John Paul Phelan (Fine Gael)
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I wondered whether the Minister might have been referring to his predecessor.
I welcome the Minister to the House and am glad of the opportunity to have a discussion on the publication of the Book of Estimates. Contrary to the Minister's statements, his Estimates do not reveal any genuine reform of the process in its entirety. Given that this has been his first full year in this office, I had thought we might witness a new departure from him, as well as genuine visible signs of the Government's new-found commitment to receiving value for money. The Minister mentioned 19 road projects under way at present which are on time and under budget and claimed that this gives the lie to the proposition that the Government cannot produce value for money for taxpayers. The Minister should repeat this claim on their completion. Only then would he be able to give the lie to the widely and correctly held view that the Government wastes scandalous amounts of public money on infrastructural projects and other general spending issues.
During the last number of months, there have been a number of different disclosures, particularly relating to the Department of Health and Children. The Minister is at great pains to emphasise, here and elsewhere, the increases in expenditure within the Department of Health and Children authorised by the Government since 1997. In the intervening period, contrary to the picture which the Government would like to paint, it is clear that the service provided has become worse. A threefold increase in expenditure coinciding with delivery of a worse service clearly indicates an abject failure on the part of the Government, of successive Ministers for Health and Children, including the current Minister for Finance, and his predecessor. In this regard the Minister has nothing to crow about in this House or any other venue.
During the past couple of years, the Government has proclaimed a number of key priorities with respect to the finance portfolio. The Minister referred to the numbers employed in the public service. A guideline was issued to the effect that numbers would be reduced by approximately 5,000. The cumulative increase in the last couple of years is over 14,000. Nobody argues with the need for increased front line staff. I support the Minister's additional funding to increase the number of primary teachers and his call for increased numbers of frontline healthcare workers. However, I cannot stand over further inflating the numbers of non-frontline staff in the public service and I cannot see how the Minister can stand over it. In certain parts of the public service those numbers continue to increase.
While the Government has committed to keeping current expenditure increases in line with nominal GNP, this has not happened over the last couple of years or in this Book of Estimates. On budget day the Minister will announce additional increases and other measures. I take issue with a number of categories of funding. The Minister reaffirmed the Government's broken promise about the 2,000 extra gardaí and contradicted himself. Given the figures that have been announced, the 2,000 gardaí cannot and will not be provided.
Mary O'RourkeJohn Paul Phelan (Fine Gael)
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When the Minister for Justice, Equality and Law Reform, Deputy McDowell, was on national radio last week before the announcement of the Estimates he knew the figures would not allow for the 2,000 extra gardaí to be provided. The Minister says some 12,900 gardaí will be provided by the end of this year.
John Paul Phelan (Fine Gael)
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There is a clear difference between the figures in the Estimates and the commitment made by the Government after the 2002 general election, and no amount of verbiage by the Ministers for Finance or Justice, Equality and Law Reform can change that fact. The figures speak for themselves.
Contrary to the pronouncements by the Minister for Justice, Equality and Law Reform, we have seen a 23% increase in expenditure on overtime and wages for prison officers in the past couple of years. We had a number of debates in the House on that issue and while the Minister has spoken strongly on that point, as on others, his actions are weaker than his words. The Estimates announce an incredible 92% decrease in funding for courthouses although many of these facilities are dilapidated. In Thomastown the District Court will not continue in its current building because those who work there refuse to use it.
Many people who have spoken on the announcement of the Estimates have referred to local authority funding. The Government proposes a 4% or 5% increase in local authority funding. Given wage and other inflation, this is a backward step and will oblige local authorities to increase local charges. Many members on both sides of the House have expressed frustration as we all deal with local authorities daily. We have seen a derisory 1% increase in the disabled persons grant and in other categories of housing assistance. Given the existing backlog in those schemes, a 1% increase is a slap in the face to the people who are in need of those supports.
The Estimates propose an 8% decrease in the amount of funding for the water and sewerage service programme. This runs contrary to comments on the need to increase spending on water and sewage treatment facilities throughout the country. It beggars belief that the Government could announce a €35 million decrease. I am baffled at the proposed decrease in funding for the food safety budget when we hear daily about threats from such issues as avian 'flu and beef imports from South America. It is incredible.
The Minister is at pains to point out the increases he has announced for the Department of Education and Science. I welcome the fact that extra teachers will be provided but to paraphrase the Minister's Cabinet colleague, Deputy Noel Dempsey, it is just a drop in the ocean. Some 73,000 primary school students are in classes of over 30 and 5,000 in classes of over 35. The Minister's 500 extra teachers will not address that backlog, never mind the Government's commitment to bring the ratio of pupils to teachers to the low 20s. While it is a small step in the right direction it goes nowhere near the Government's commitments and I see no reason for the Government to crow about it.
The Estimates allocate €2,000 extra for the National Educational Psychological Service across the country. The Leas-Chathaoirleach is probably sick of hearing me raise this issue, as I do so at every possible opportunity. Only 51% of children in primary education have access to the service and the Government has given them a slap in the face with this announcement, which constitutes a net cut in funding. Less than 50% of primary school students will have access to educational psychological services. That is a disgrace. In my own County Kilkenny, only 17% of primary schools have access to the service. If the Minister is to make extra announcements on budget day and wishes to do something in the area of education, this is one area where he could, with a relatively small amount of money, have a significant impact on the lives of young children and nip in the bud problems that could develop into greater issues in later life.
Contrary to the Minister's announcement on Transport 21, there is relatively no increase in funding for transport proposed in the Book of Estimates as opposed to what was announced for this year. To some extent that gives the lie to the grandiose proposals announced under Transport 21, which constitute a rehash of promises that were broken over the last five or six years.
Another scandalous situation this Government has allowed to develop relates to the hospital service, in particular to accident and emergency services. The Tánaiste and Minister for Health and Children, Deputy Harney, announced her proposals just after she assumed the position, yet the accident and emergency crisis is deteriorating rather than improving. During the lifetime of this Government since 2002, accident and emergency and inpatient bed charges will have doubled if the proposals in the Book of Estimates are approved. That cannot improve access to or provision of health services for those who most need it. The Book of Estimates contains no reference to increased funding for acute hospital beds but I hope this will be announced on budget day.
Contrary to the Minister's remarks on the increase in funding for the health services, it has been clear over the past years that the rate of health inflation is far higher than the average rate throughout the economy, and any increases he has announced in the Estimates will be more than swallowed up by the increases in health costs over the next two years. I am very disappointed at what the Minister has announced. While this is only part one of a two-part process, I hope he will learn some lessons and act on vital areas before the budget is announced.
I briefly wish to mention domestic violence, an issue which was recently debated in the House. The debate produced no agreement but contrary to all the platitudes from the Government, the increase in funding to address violence against women is a paltry 3%. After inflation, that is a decrease in real terms. Given that a relatively small sum would be involved, this might be usefully corrected before the budget.
Martin Mansergh (Fianna Fail)
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I warmly welcome the Minister and his officials. It may well be the case that Germany and France need new economic departures. What is required in Ireland is a steady hand on the tiller, which the Minister is providing, allowing us to continue the country's fantastic progress in recent years. The debt to GDP ratio continues to decline. The Minister mentioned employment having increased since 1997 by 500,000, but I believe that by 2007 employment will have increased by 1 million, double the 1987 level. That will also be an enormous achievement. In that context the fact that according to the Estimates, €42 billion will be able to be spent on services, which does not provide the full picture since the budget is to follow, is very impressive by any standards. There is no sign or talk of cutbacks.
Of course, the Minister must operate within a safety margin, and it is very important that he do so. Without such a margin, if there were a sudden deterioration in circumstances, one could find oneself surprisingly quickly knocking up against the 3% EMU limit. Many other EU economies have got into difficulty on that account. One can open one's newspaper any day of the week and see that we are under constant competitive pressures from various sources. Perhaps I might mention two or three that have arisen recently. Our sugar industry is under pressure in Brussels. There is the problem of the Irish Ferries dispute and the displacement of employment. The US is also scrutinising transfer pricing by US multinationals. The net point is that we must stay on our toes.
I warmly welcome the extra spending on education and the details given by the Minister on extra teachers. If he has any spare room in his budget, school buildings are a particularly worthy form of investment. I attended the opening of a Gaelscoil in Tipperary earlier this week, and the quality was fantastic. There is money in the Estimates for infrastructure, and I imagine that there will be some more in the budget itself. That underpins the Transport 21 plan. To provide some perspective from outside the jurisdiction, I will quote from the Belfast Telegraph. An article on the business pages of 21 November by Carlton Baxter complains that there is no real debate on the Northern budget and about the dominance of the public service sector. He writes:
That can't be a healthy situation at a time when our neighbours in the Republic are investing heavily in everything under the sun, especially their infrastructure. Their economy just keeps on growing.
How ironic that at a time when the Dáil is investing in motorways we have a draft budget that cuts the amount of money needed to repair and maintain our roads.
Every year that passes, new projects come on stream. Criticism is made of the fact that a quick expansion in the late 1990s caused some inflationary problems. It was a new problem for us to cope with. However, no planning whatsoever was carried out by the rainbow coalition on infrastructure. One searches their election documents in vain for any serious reference.
With regard to justice, it is clear that we are moving towards the target of 14,000 gardaí.
Martin Mansergh (Fianna Fail)
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Frankly, it is of no import if it happens in September 2007 rather than June 2007. The reality is that it——
John Paul Phelan (Fine Gael)
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They have lied through their teeth for the past four years.
Martin Mansergh (Fianna Fail)
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——will be completed only slightly later than planned.
Martin Mansergh (Fianna Fail)
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It is not a lie. At least the number of gardaí was not reduced, as happened under the rainbow coalition in the mid 1990s.
Martin Mansergh (Fianna Fail)
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The question of courthouses was mentioned. Some very fine work has been carried out on them in such places as Clonmel and Ennis. The Minister will correct me if I am wrong, but I believe that Tullamore was also included.
Martin Mansergh (Fianna Fail)
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Exactly. Another point made is that people can see there is a great deal of extra spending but that the money is being wasted or not producing any results. Health is always picked on as an example. I do not know whether Senators listened to what I thought was a very interesting contribution by the vice-president of the IMO the day after the Estimates. I admit that she was highly critical of the Government that the increase had not been even greater than the percentage allowed for in the Book of Estimates. However, she very forcibly made the point that the extra money that had been provided in recent years was not going to waste but being spent on improved procedures and throughput.
I wish the Opposition would stop constantly knocking our health services and suggesting that it is all a waste of money. They should talk to people in the medical profession. Regarding hospitals, the Estimates have allowed for the vacant wards in Clonmel, County Tipperary, to be staffed and used. A complementary phase in Cashel will also get under way.
Many references were made to underpin criticism of Government spending in the Comptroller and Auditor General's report. He was around in 1995, 1996 and 1997, and he will still be here in ten years, regardless of what Government is in power. Does anyone seriously believe that, one day, if the right sort of Government comes along, we will close down his office? Of course we will not do so. He is doing his job, which is to scrutinise and criticise Government expenditure over a vast area. The fact is that he found things to criticise last year and the previous one, as he will next year and thereafter. Obviously, people will have to take the lessons on board. However, let us not imagine that, when the Opposition was in Government, the Comptroller and Auditor General did not make highly critical comments on projects evidencing overspending, lax controls and so on.
While there is much political criticism of the Estimates, we are hearing from the Opposition in private that it is a great time to be in Government. Much of the criticism involves spokespersons going through the motions. Bringing forward the introduction of draft Estimates to September would not serve any useful purpose because one would have a less clear idea of the outturn for the current year. I share the traditional attitude of Charles Haughey, expressed when he was in Opposition, to the respective roles of the Opposition and Government, namely, it is the role of the Government to govern and make decisions and the role of the Opposition to scrutinise and criticise rather than act as a co-decision maker. The same applies to Government backbenchers, which, for this purpose, we are also. Our job is to make——
John Paul Phelan (Fine Gael)
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The Senator is in Opposition. There are many of them.
Martin Mansergh (Fianna Fail)
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——constructive suggestions for consideration by the Government on foot of all the advice available to it. In a general sense, the Dáil can accept or reject the budget.
The Irish Congress of Trade Unions has a point on strengthening the labour inspectorate but I imagine this will be addressed in social partnership negotiations. I am glad the Fine Gael spokesperson did not overemphasise the issue of public service numbers because gardaí, teachers and health workers are all needed. Recruitment restrictions were introduced in 2002 or 2003, when it appeared that we might be facing difficulties, but the economic outlook has brightened considerably in the meantime. Of course one must have regard to sustainability in the longer term but, in general, the number of public servants is not excessive. For example, the number of public servants employed in Northern Ireland is approximately 10% higher than it is here and therefore it is not correct to argue our public service is overburdened.
The Fine Gael spokesperson in the Dáil referred to the need for much greater prioritisation, thus strongly implying that initiatives should be dropped or put on the backburner. In this regard I presume he meant rather more than electronic voting. I would like him to become much more specific before the next general election in regard to the Government programmes he would like to see dropped or cut back, no doubt to make room for others. In the approach to elections, the public listens to the promises of various parties but is not told what will be displaced to fulfil those promises. They are not told the unstated plans to drop certain initiatives. Perhaps decentralisation——
John Paul Phelan (Fine Gael)
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The public was certainly not told that before the last general election. It was not told about any cutbacks.
Paddy BurkeJohn Paul Phelan (Fine Gael)
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No cutbacks. The Senator lives in cloud cuckooland.
Martin Mansergh (Fianna Fail)
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I warmly welcome the Estimates——
John Paul Phelan (Fine Gael)
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I am glad the Senator brought that up.
Martin Mansergh (Fianna Fail)
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——which are a sign of the resounding health of the economy and the excellent way in which it has been managed for many years, particularly in the capable hands of the present Minister for Finance, Deputy Cowen.
12:00 pm
Derek McDowell (Labour)
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During the almost five years in which I had the pleasure of shadowing the former Minister for Finance, Charles McCreevy, I developed a real hatred of the word "prudence", which is most beloved of our friends in Merrion Street. Rarely did Mr. McCreevy make a speech that was not littered with references to "prudence" and "prudent". One develops an understanding fairly quickly as to what "prudence" means in finance-speak. It essentially means one does as little as possible with the taxation and welfare systems. One provides enough money for increasing public sector pay and, if one has a few euro left over, one provides for some capital infrastructure improvements. Ideally, one does nothing else. "Prudence" is basically a code for saying one will not spend the few bob one can afford to spend to improve public services, and for congratulating oneself on not doing so.
When Mr. McCreevy made his speeches, littered as they were with the word "prudent", he never took them to heart. He had no intention of being prudent because he had notions and schemes concerning what he wanted to do within the Department of Finance. In fairness to him, he succeeded in implementing many of them. Many of them were bitterly opposed by my party.
I suspect the current Minister for Finance, Deputy Cowen, may actually intend to do as little as possible. He may now be giving us a steady-as-you-go message. The Estimates we are discussing support that notion. The overall spending increase is predicted to be 7%. Given that growth for this year is likely to be in the order of 4.5% and inflation in the order of 2.5% or 3%, the spending increase seems to be part of a steady-as-you-go system under which no more will be spent next year than this year. This is also revealed in the detail of the individual Estimates, some of which my colleagues have mentioned.
The Estimates reveal that the Minister has no notion or vision as to what he wants to do with public services. It is true that the public finances are quite healthy, perhaps healthier than most of us imagined they would be two years ago, yet there is no vision regarding what should be done with them. We knew what Mr. McCreevy wanted to do when he had extra money — he wanted to give it away in tax breaks. He did so all the time. Given that Mr. McCreevy is safely over in Brussels, the Government in its current manifestation says it does not want to go down this road but wants to improve public services. However, there is no alternative vision and we get no sense from the Government of what exactly it wants to do with public services, including the health service. In so far as we do have grand plans, they have no credibility.
This is a problem not only for the Government but for all who want to see serious and sustained improvements in public services. I have said this many times in the House. It becomes more difficult for those of us who want to see sustained improvements to argue for them if the general impression of the public is that spending thereon is a waste of money and that it has been misled or lied to consistently over the years. The examples are many and I will not elaborate on them because I and other Senators have done so on previous occasions.
It is now clear that the 2001 health strategy was entirely bogus and that there was never any serious intent or commitment to delivering it. Senator Mansergh mentioned the comments of the vice president of the Irish Medical Organisation some days ago. He did not mention that she also stated the commitment made in 2001 to bring 3,000 extra beds into the health system within ten years has so far resulted in no extra beds at all. The net number of inpatient beds in our hospitals is now lower than it was in 2001. Given that such an important linchpin of the 2001 strategy has clearly proven to be bogus, it is very difficult to invest any credibility in the plan at all.
The same is true of the national spatial strategy. When it was put under any measure of pressure, especially on foot of the decentralisation plans some months after it was published, it was proven not to be worth the paper it was written on. We can hardly be surprised that people have invested no credibility in the Transport 21 plan recently announced by the Government given that virtually all its individual elements had been announced more than once over the past ten years or so. We have a problem in that the Government has no vision for the public services. It will take any alternative Government some time to deal with this.
Let me consider some of the individual Estimates. I was struck by the headline increase of 10% in health spending, which on the face of it appears to be quite generous. However, the health Estimate is symptomatic of the underlying problems associated with so many of the other Estimates. In the first instance, at least half of the increase will go towards increases in pay or personnel. Only €250 million to €400 million, depending on how one counts it, will actually be spent on improving services.
I give due credit to the Minister for Finance, Deputy Cowen, as much as to the Minister for Health and Children, Deputy Harney, for following through on the commitment made in last year's budget to increase the number of residential places for disability and mental health. It is clear that when the Minister for Finance has an interest in and commitment to an area, as he clearly developed during his time as Minister for Health and Children if he did not have it beforehand, there is follow through. That is clear in the health Estimates.
However, nowhere else is there follow through. On many occasions we have examined the 2002 commitments of this Government with regard to ending waiting lists, providing medical cards and so forth. It has broken those promises. We do not need to go back to 2002. Consider what happened last year when the current Minister, Deputy Harney, took office. The central feature of her health budget last year was the €70 million additional allocation to accident and emergency services. We were told that the problem with accident and emergency services would be solved before the end of March, if memory serves. We were then told it would be solved before Easter and then that it would be early summer. It has not yet been solved.
Not only has it not been solved, it appears to have been forgotten. There is no specific commitment of money in this year's Estimates for accident and emergency services. We are told that the improvements undertaken last year are continuing. That is another way of saying that most of them have not been delivered, which will not be a surprise to anybody since the problem is as bad now as it was then.
Last year, the Minister also gave a commitment to provide 30,000 additional normal medical cards and up to 200,000 doctor-only cards. We are aware of the problems that have bedevilled the doctor-only cards. As a result, virtually none has been issued. One would not have thought that the same problems should apply to the 30,000 additional medical cards which were promised last year. However, the additional figure is closer to 2,000 since last year. What has gone wrong? Where is the planning?
It is no surprise that when people look at the detail of commitments made, even as recently as in last year's budget, they no longer take them seriously. What people get is the Estimates, a fine document that nobody can understand. That is hardly a surprise given that it contains large figures which do not mean anything to anybody. They also get detailed press releases from Departments. They cannot understand the Book of Estimates and they know from experience that the press releases do not have substance within a short time. This is leading to cynicism, which is becoming a problem.
There is a difficulty with capital funding. Senator Mansergh mentioned the article in the Belfast Telegraph last week. We are spending far less than we can reasonably afford to spend on infrastructure. It is true that in the late 1990s there was a capacity problem in the construction industry. It was difficult to get motorways built at reasonable cost because, frankly, Irish contractors were not up to the job. There were also a limited number of competitors in the market and it was difficult to get tenders at reasonable prices. That is no longer the case. The construction industry has changed dramatically in the past three or four years. There is significant additional capacity in the system and we have more experience. There is no reason not to spend a great deal more money more quickly and still expect to complete the project reasonably, within budget and to get good value for money.
In that context, the fact that we did not spend €285 million of the capital expenditure provision for this year is remarkable and requires a reasonable explanation. Neither did we spend €236 million of the 2004 allocation for which there was no explanation. It appears that the carryover facility which Departments now enjoy is leading to a system where they carryover their maximum allocation every year. It is becoming institutionalised within the system. It was never intended to be that way or to allow for such significant underspend. One could say that otherwise the Departments would just spend the money on things that had not been worked out properly and the money would be wasted. It has to be welcomed that they are not wasting the funding. Nonetheless, it is remarkable.
Even in Departments that are regularly crying out for money, such as the Department of Transport and the Department of Health and Children, there is a significant capital underspend. It is approximately €56 million in the Department of Health and Children this year and approximately €100 million in the Department of Transport. We are entitled to a decent explanation for this. For years we were told that things could not be done because we could not afford it. Now, the money has been allocated to the Departments which claim to need it but they cannot spend it. That requires an explanation from the Government and from the Departments concerned but that explanation has not been forthcoming.
The policy on the Garda is remarkable. This is an extraordinary situation where there is a significant increase in the funding provided by the Department of Finance for the Garda Síochána yet there is no agreement between the two Departments and Ministers as to what it will achieve and how quickly it will achieve it. The Minister is well aware that there is great public sensitivity about the issue of crime. Virtually everybody who examines this issue agrees there is a need for additional gardaí on the streets. The Government has been aware of this for some time and promised to provide 2,000 extra gardaí. We do not yet have them and it is clear they will not be provided by the time of the next election. If Senator Mansergh believes that does not matter, he is in for a rude awakening in a couple of years.
The least we deserve is clarity on this matter. We need to know that the Minister for Justice, Equality and Law Reform is not trying to pull the wool over our eyes. If it is the case, as is suggested, that he had not factored in the number of gardaí who are retiring, it is difficult to believe that could have been done accidentally. It is clear the Minister is playing games.
There is also a clear commitment with regard to education. There were few enough commitments in 2002 but one was that most, if not all, children under nine years of age would be in classes of under 20 pupils by the next election. At present, there are 100,000 children in classes of over 30 pupils. Notwithstanding the employment of 200 extra teachers this year and 300 next year, the Government will not come close to meeting its stated target on the pupil-teacher ratio. We must confront the fact that while the overall averages might look good, there are serious blackspots, particularly in Kildare, Meath and parts of west Dublin where a large number of classes have more than 30 children, and in some cases more than 33 or 34. In many cases that is the norm. That is unacceptable.
I heard Deputy Andrews from Dún Laoghaire speaking in the Dáil debate last evening. He said it must be terrible for Opposition spokespersons at this time of the year when the Government announces all its grand plans. I have news for the Deputy. It is not terrible because we just do not believe the Government, nor does the public.