Written answers

Thursday, 23 September 2021

Department of Public Expenditure and Reform

Capital Expenditure Programme

Photo of John McGuinnessJohn McGuinness (Carlow-Kilkenny, Fianna Fail)
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21. To ask the Minister for Public Expenditure and Reform the plans he has in place to review the oversight and governance of major spending projects; and if he will make a statement on the matter. [45656/21]

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.

The Public Spending Code is not static and was updated in 2019 following an extensive consultation process. This update has strengthened the guidance to better align with the realities of project delivery and with a particular focus on improved appraisal, cost estimation and management. In line with the principle of proportionality, the requirements for smaller projects have been streamlined and the requirements for larger projects support a better consideration of options, risks, costs and deliverability.

The updated Public Spending Code brings a renewed focus to:

- Robust options appraisal to support identification of the most efficient and effective option to achieve the identified objective;

- Gaining a more developed view of costs, risks and timeframes before committing to proceed with a project;

- Tighter governance of key decision points during project preparation and delivery;

- Ongoing updating of the business case for a project as it proceeds through design and planning phases; and

- Continued scrutiny of affordability throughout the process.

As part of the ongoing reform of the Public Spending Code and as one of the work streams of the review of the National Development Plan, my Department is developing a strengthened external assurance process for major projects with an estimated cost of over €100 million. This will involve an independent review of major projects at 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 independent experts in infrastructure delivery. The application of external review process will be the responsibility of approving authorities, the spending Departments in the main, and their Accounting Officers in order to rigorously assess business cases that have been issued to them from their Sponsoring Agencies. The responsibility will be on approving authorities to tender for the external review from a framework of experts and to ensure the feedback from the review is reflected in any updated business case.

The reviews will consider key issues including:

- Robustness of planned delivery;

- Accuracy of cost forecasts;

- Consideration of risk; and

- Appropriateness of procurement strategies.

In addition, a Major Projects Advisory Group is being established to support my Department's role within the overall project assurance process. The Group will support my Department in assimilating the outputs from the external reviews, informed by the perspective of those who have successfully delivered major public infrastructure in Ireland.

The detail of the process and arrangements for implementation will be delivered in Q4 2021.

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