Written answers

Tuesday, 17 November 2020

Department of Public Expenditure and Reform

Public Expenditure Policy

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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135. To ask the Minister for Public Expenditure and Reform the analysis his Department has carried out into the expected additional cost implications to the Exchequer as a result of our role in the planned European Peace Facility further to the spending review carried out by his Department on expenditure on overseas peace support missions; and if he will make a statement on the matter. [36703/20]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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The primary purpose of the recent Spending Review on Expenditure on Overseas Peace Support Missions carried out by my Department was to identify the direct and indirect costs of overseas operations by the Defence Forces. While the overall cost of the European Peace Facility was referenced by the paper as a likely source of increased spending in an international defence context, analysis of the cost was not included in the paper's Terms of Reference.

The aim of the European Peace Facility is to provide the European Union with a single off-Budget fund for the period 2021-2027, to run alongside the next Multi-annual Financial Framework (MFF). It will finance all Common Foreign and Security Policy actions having military or defence implications. In this regard, it replaces the current African Peace Facility and the Athena mechanism.

As stated in the Spending Review, the €5 billion ceiling agreed for the European Peace Facility represents a significant increase on previous Common Foreign and Security Policy spending. As with other EU contributions, the scale of Ireland's contribution to the European Peace Facility will be assessed based on a Gross National Income distribution key. However, the key used to calculate Ireland's level of contribution has not yet been decided. In addition, no final agreement has yet been reached at EU level on the funding mechanism, and as yet there has been no Government decision on participation. As such, the question of analysis of the cost is an ongoing matter.

It should be noted that any additional cost implications to the Exchequer due to the European Peace Facility will arise in the normal course as a result of EU membership and participation in EU Common Security and Defence Policy, rather than as a result of participation in any overseas peacekeeping operations.

Photo of Gerald NashGerald Nash (Louth, Labour)
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136. To ask the Minister for Public Expenditure and Reform his plans to introduce new reforms to ensure enhanced monitoring, transparency and effectiveness of public spending in view of the overspend on a series of flagship projects, including the national broadband plan, with a 500% cost overrun, the national children's hospital, with a 94% overrun, and Dublin Port tunnel, with a 160% overrun; if he plans to introduce new reforms before the completion of the current review of the national development plan; and if he will make a statement on the matter. [36581/20]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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In order to ensure that the Programme for Government priorities are achieved and in responding to the unprecedented impact of Covid-19, it is timely now for the Government to bring forward the previously planned review of the National Development Plan and consider the most important challenges facing us including climate action, housing, balanced regional development, healthcare, social welfare policy, transport, education, and the associated resourcing requirements.

As one of the work streams of the review of the National Development Plan, the National Investment Office (NIO) in the Department of Public Expenditure & Reform is currently developing a new governance and assurance process for major projects with an estimated cost of over €100 million.

Delivering greater value for money in the expenditure of public funds is a key element of all public capital investment policy. The majority of capital projects are delivered on budget and on time and there is a high level of professionalism across the sectors.  Following last year’s update of the Public Spending Code and in line with the principle of proportionality, the process for smaller projects in the Public Spending Code has been streamlined and the process for larger projects supports a better consideration of options, risks, costs and deliverability.

However, the update of the Public Spending Code last year combined with lessons learned from domestic projects and international best practice highlighted the need for more structured scrutiny of major public investment projects, particularly in the areas of planned delivery, costing, and risk.  Major public investment projects are considered to be those with an estimated project cost in excess of €100 million. There are over 40 projects in this category in the Exchequer funded element of the National Development Plan.

All the evidence shows that the greatest impact on improving project outcomes comes from careful project preparation and that external reviews from an independent party can be instrumental to enable good project and investment governance. 

The new process is being informed by international practice and consultation with public sector stakeholders. It will involve an independent peer review of major two key stages in the project life-cycle, specifically when the preferred delivery option is chosen and before approval is given to go to tender. The reviews will be conducted by experts in infrastructure delivery and will draw on international expertise where relevant.

The reviews will consider key issues including:

- Robustness of planned delivery;

- Accuracy of cost forecasts;

- Consideration of risk; and

- Appropriateness of procurement strategies.

 External reviews of major projects will mean that Government is making decisions with a full picture of the proposal, its costs, risks, and benefits. The detail of the process and arrangements for implementation will be delivered by Summer 2021 in the context of the wider review of the National Development Plan.

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