Written answers

Thursday, 11 May 2023

Department of Public Expenditure and Reform

Cost of Living Issues

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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129. To ask the Minister for Public Expenditure and Reform the specific measures his Department is taking to ensure better value for money on public expenditure; the steps he is taking to ensure that his Department is not contributing to inflation and the cost-of-living crisis; and if he will make a statement on the matter. [22302/23]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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Public expenditure management and achieving value for money, within agreed Ceilings voted by Dáil Éireann, is a key responsibility of every Department and Minister.

Each Accounting Officer is responsible for:

  • the safeguarding of public funds and property under his or her control with systems of internal control in place;
  • ensuring that Department of Public Expenditure, National Development Plan & Reform sanction for expenditure has been obtained;
  • ensuring that all relevant financial considerations are taken fully into account, and, where necessary, brought to the attention of Ministers in relation to the preparation and implementation of policy proposals.
My Department engages on an ongoing basis with all Departments. It will continue to monitor and develop our budgetary process to facilitate value for money being delivered across Government projects and programmes and ensure expenditure remains sustainable. In implementing further reforms, my Department will look to build on the budgetary reforms already in place and the significant work on public service reform already achieved. These reforms include:
  • The 'whole of year' budgetary framework with publications at key points in the year including the Public Service Performance Report, the Summer Economic Statement, the Mid-Year Expenditure Report, and the Spending Review papers. These publications seek to support enhanced transparency, engagement in relation to budgetary issues and value for money.
  • Improving and supporting the use of evidence informed policy making through the Irish Government Economic and Evaluation Service.
  • Enhancing the focus on performance and national well-being through the performance and well-being frameworks.
Sustainable expenditure, over the medium-term, is delivered through a Medium Term Expenditure Framework (MTEF) which provides for:
  • core expenditure growth rate being set at sustainable levels in line with the trend growth rate of the economy; and
  • ongoing improvements in public services and public infrastructure.
Recent inflationary pressures have required a responsive approach to the expenditure framework. To balance the immediate need to support households and our core public services against the longer term need to ensure sustainable public finances, a short term adjustment to the Expenditure Strategy was required.

Budget 2023 reflects a two pronged approach, as set out in the 2022 Summer Economic Statement (SES):
  • Increasing the core expenditure growth rate above 5 per cent on a temporary basis for 2022 and 2023, supporting our public services; and
  • Using funding outside of the core expenditure base for one-off or short-term measures to help our households, businesses and wider society with aspects of inflation.
This uplift in the growth rate, for 2022 and 2023, to above the long run average of 5 per cent enabled Government to take steps to support public services in a time of elevated prices. This short-term adjustment balances the two criteria underpinning the overall fiscal strategy. On the one hand, it provides additional resources to continue a steady upward trajectory of investment to support citizens through income supports, access to services and building infrastructure capacity. On the other hand, the upward adjustment is below the headline inflation rate to limit the risk of expenditure policy feeding into an inflationary spiral. In tandem with non-core expenditure response, this adjustment provides a balanced response to the challenging economic environment.

Moving forward, the expenditure strategy for Budget 2024 will be considered as part of the 2023 Summer Economic Statement.

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