Written answers

Thursday, 17 June 2021

Department of Public Expenditure and Reform

Public Expenditure Policy

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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262. To ask the Minister for Public Expenditure and Reform the extent to which his Department have identified projects least compliant with the principal of achieving good value for money; and if he will make a statement on the matter. [32776/21]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I should first explain that as Minister for Public Expenditure & Reform I am responsible for setting the overall multi-annual capital expenditure ceilings for each Ministerial Vote Group as set out in the National Development Plan and Project Ireland 2040. My Department is also responsible for maintaining the national frameworks within which Departments operate to ensure appropriate accounting for and value for money in public expenditure such as the Public Spending Code. The Public Spending Code sets the value for money requirements and guidance for evaluating, planning and managing capital projects. Management and delivery of investment projects and public services within allocation and the national frameworks is a key responsibility of every Department and Minister.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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263. To ask the Minister for Public Expenditure and Reform the degree to which the public expenditure to date in 2021 is in line with budgetary expectations; and if he will make a statement on the matter. [32777/21]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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264. To ask the Minister for Public Expenditure and Reform if particular Government Departments or their subordinate bodies are shown to be less than compliant with public expenditure and reform guidelines; if so, if corrective steps have been taken; and if he will make a statement on the matter. [32778/21]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 263 and 264 together.

In the period from 2014, prior to the impact of Covid-19, the overall fiscal strategy adopted by the Government greatly improved the monetary position of the State with the deficit at the end of 2014 of €7.1 billion or 3.6% of GDP moving to a surplus of 0.5% of GDP at the end of 2019. The position regarding gross general government debt against GDP also improved over this time period, from 104.4% of GDP at the end of 2014 to 57.4% of GDP at the end of 2019.

Underpinning this fiscal strategy was the policy of sustainable annual increases in public expenditure during this timeframe, with gross voted expenditure increasing by a total of €13.1 billion or 24%, from €54.1 billion in 2014 to €67.2 billion in 2019. Over this period, to allow for the delivery of key infrastructure projects, there was a clear focus on increasing levels of capital investment by the State.

The decisions made in recent budgets have ensured that we had the financial resources to act in response to Covid-19 and to provide substantial supports to mitigate the impacts of the pandemic during 2020 and for 2021, with some €28 billion allocated to date across the two years for support measures.

For 2021, the Revised Estimates for Public Services (REV) outlined an overall Government Expenditure Ceiling of €87.8 billion, which included almost €12 billion in funding to respond to Covid-19. Within this overall expenditure ceiling, €5.4 billion was set aside in reserve to be used as required during the year for temporary, targeted measures to mitigate the impacts of Covid-19.

This reserve was partially allocated as part of Further Revised Estimates agreed by Government in April, with almost €4.3 billion in additional funding provided to the Departments of Social Protection; Enterprise, Trade and Employment; and Rural and Community Development for measures in response to the impact of Covid-19. In addition to this, additional Departmental Estimates will be presented to the Dáil in due course reflecting the various measures set out in the National Economic Recovery Plan.

It is a key responsibility of every Department and Minister to manage expenditure within their respective allocations, particularly given the exceptional level of funding being provided this year, and careful monitoring of spending against profile and of progress on programmes and projects is required. My Department is in regular contact with all other Departments and Offices regarding this.

Based on Departmental Estimates presented to the Dáil to date and as set out in the most recent Fiscal Monitor, total gross voted expenditure to end-May 2021 amounted to nearly €33 billion. While this is nearly €1½ billion ahead on the same period in 2020, the public health restrictions in place this year have impacted on spending plans of departments. Accordingly, gross voted expenditure is running almost €1.4 billion or 4% below profile.

In 2021 the main spending Departments will be reporting to Government quarterly on spending within their areas. This stands alongside a range of reforms implemented in recent years in order to enhance Ireland’s budgetary framework and to ensure efficient and effective management of public expenditure. Looking forward, the Programme for Government commits to continuing reform and improvement of the Budgetary process, building on the budgetary reforms already in place and the significant work on public service reform already completed.

Furthermore, inflationary pressures continue to be dealt with on a year-by-year basis as part of the normal budgetary process. The rationale for this approach is clear, where the non-application of price increases can be used as a mechanism to generate efficiency dividends and promote productivity where State bodies are effectively challenged to maintain the existing levels of service without making specific provision for indexation. As the economy recovers from the impact of the pandemic, this is an area that we will need to keep under review to ensure that value for money is delivered across Government projects and programmes.

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