Written answers

Wednesday, 25 January 2006

8:00 pm

Photo of Finian McGrathFinian McGrath (Dublin North Central, Independent)
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Question 527: To ask the Minister for Finance the reason €700 million given to different Departments in budget 2005 was not spent when other needy groups are short of funds. [1387/06]

Photo of Brian CowenBrian Cowen (Laois-Offaly, Fianna Fail)
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The end December Exchequer returns indicated that, on an Exchequer issues basis, spending in 2005 totalled €35.467 million or €2.920 million more than 2004, an increase of 9%. This was some €705 million less than provided in the Revised Estimates Volume, REV, 2005 and comprised €564 million current and €141 million capital, excluding capital carryover then estimated at €345.7 million and which is available for spending in 2006 subject to the terms of an order to be made under section 91 of the Finance Act 2004. These are preliminary outturn figures and an updated provisional outturn will be published in the Revised Estimates Volume 2006.

My Department was advised late on Tuesday evening, 17 January 2006 by the Department of Health and Children that the Health Service Executive had advised it on that day that there may be some alterations to its estimated outturn and consequently its capital carryover figure of €56.4 million included in the Appropriation Act 2005. The Act provided that, in respect of the HSE, a sum of €56.4 million could be made available for spending in 2006 in respect of capital not disbursed in 2005.

My Department has been advised by the Department of Health and Children that, on the basis of the preliminary outturn figures for 2005 from the HSE, the capital savings anticipated by the HSE in December may have been used to meet similar sized costs under the current expenditure heading. The Department of Health and Children is awaiting final verification of the outturn from the HSE. The implications of this development for the 2006 capital budget for the HSE will be reviewed in the context of the 2006 Revised Estimates Volume. I am determined to ensure that it will not have an adverse impact on the plans for the HSE's capital spending in 2006. As matters stand, the 2006 capital allocation for the HSE is €558 million, an increase of 10% on the provisional 2005 outturn.

The legal instrument that gives effect to the carrying over of funds from 2005 to 2006 and determines the actual amounts to be carried forward is a ministerial order. Under the relevant legislation — section 91 of the Finance Act 2004 — the order must be made before the end of March and the draft order will be put formally before the House for approval by resolution. The Revised Estimates Volume will also include details of the carryover under each Vote and I will accordingly advise the House in due course in compliance with the legal requirements.

The overall savings of some €705 million referred to earlier occurred across almost all Votes and the preliminary explanations from Departments indicate that savings on current issues were attributable to a combination of factors primarily higher than expected appropriations-in-aid, a reduction on the forecast live register levels and lower than expected demand on certain demand led schemes. The reasons for the capital underspend are primarily timing delays in relation to certain projects, lower demand for some demand led schemes and buoyancy in own source income of certain State bodies.

Notwithstanding these savings, overall spending in 2005 based on the Exchequer returns increased by about 9% over 2004. I have also made provision in my recent budget for further substantial increases in spending in 2006. Within the overall increase in gross voted spending of 11% announced on budget day, I have allocated very significant increases in expenditure particularly for the priority areas of health, education and social welfare. This includes a social welfare budget day package of approximately €1.1 billion and a five year child care programme costing over €300 million in the first year and with a cumulative cost of €2.65 billion.

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