Pearse Doherty (Donegal, Sinn Fein)
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224. To ask the Minister for Public Expenditure and Reform his understanding of the format and function of an expenditure reserve, that is, if this is simply unallocated spending included in the base; if not, if it is placed in a separate fund and so on; and if he will make a statement on the matter. [28144/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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As outlined in the Summer Economic Statement (SES), the Budget 2020 framework involves a budgetary package of €2.8 billion for next year. Current expenditure pre-commitments relating to demographics, the Public Service Stability Agreement, and the carryover of Budget 2019 measures amount to €1.2 billion with €0.7 billion for additional investment on capital programmes as set out in the NDP. As set out in the SES, as part of the Budget 2020 estimates process, consideration will be given to the funding of additional costs in relation to the National Children’s Hospital and the National Broadband Plan reflecting the most up-to-date position relating to capital spending at the time. Given these potential additional costs, the SES includes an expenditure reserve of up to €0.2 billion for 2020 to accommodate funding requirements for the National Broadband Plan and the National Children’s Hospital. This expenditure reserve represents the potential additional funding that may need to be met for these projects next year from within the overall budgetary package of €2.8 billion. Consequently, after taking account of the expenditure pre-commitments of €1.9 billion and the expenditure reserve of up to €0.2 billion this leaves €0.7 billion to be specifically allocated as part of Budget 2020. To the extent that the full reserve of €0.2 billion is not required, the amount not utilised from this reserve would increase, from €0.7 billion, the amount available to be specifically allocated as part of the Budget 2020 process.

Pearse Doherty (Donegal, Sinn Fein)
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225. To ask the Minister for Public Expenditure and Reform the reason annex 1 on page 38 of the summer economic statement lists €1.1 billion in pre-committed capital spending and is listed elsewhere as €0.7 billion. [28145/19]

Pearse Doherty (Donegal, Sinn Fein)
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226. To ask the Minister for Public Expenditure and Reform the portion of the €1.1 billion that is smoothed; and the impact or size of this spending before it was smoothed as per annex 1 on page 38 of the summer economic statement in pre-committed capital spending. [28146/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 225 and 226 together.

Table 6 of the Summer Economic Statement sets out a budgetary package of €2.8 billion and outlines pre-committed expenditure of €1.9 billion. Inclusive in this pre-committed expenditure is an increase in capital expenditure of €0.7 billion as set out in the National Development Plan. Further to this, there is an expenditure reserve of up to €0.2 billion to be established in 2020 to accommodate funding requirements for the National Broadband Plan and National Children’s Hospital. This expenditure reserve relates to capital expenditure and consequently, this would result in an overall nominal increase in capital expenditure of up to €0.9 billion. After taking account of the expenditure pre-commitments and the expenditure reserve, this leaves €0.7 billion of unallocated funding available in 2020.

Table 7 and Annex 1 of the Summer Economic Statement set out indicative estimates of ‘fiscal space’ out to 2024. The amount of €1.1 billion shown in respect of capital/NDP expenditure in Annex 1 takes into account the smoothing over a four-year period in accordance with the Expenditure Benchmark methodology. Consequently, as this calculation reflects the significant increases in Gross Fixed Capital Formation since 2016, the capital expenditure impact on the fiscal space calculation exceeds the nominal increase in capital expenditure outlined above.