Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

All Irish public bodies are obliged to treat public funds with care, and to ensure that the best possible value for money is obtained whenever public money is being spent or invested.

My Department publishes the Public Financial Procedures manual, which is a comprehensive and practical guide to public financial management. Public Financial Procedures provide the framework of accountability, responsibility and control of all public expenditure. The framework encompasses the duty and responsibility that extends to all stages in the planning, management and delivery of programmes and services to secure value for money in the use of public resources.

The Public Spending Code is the set of rules and procedures that ensure that these standards in respect of value for money for public expenditure are upheld across the Irish public service.

In addition to the rules, procedures, frameworks and guidance issued by my Department to support value for money, my Department takes a leadership role in relation to driving analysis and evidence-informed policy-making across Government Departments. Evaluations of Government expenditure are a vital component of the public expenditure management framework, and are central to ensuring and demonstrating the appropriate use of public money.

The current formal process facilitating official evaluations of Government expenditure is called the Spending Review. Since 2017 a total of 177 formal Spending Review papers have been published, with more Departments routinely assessing key policies and programmes as part of the spending review processes.

The identification and selection of topics, project scoping, analysis, and drafting are all conducted at Department level, with each Department responsible for areas and policy questions that fall within their own remit, and for managing the execution of the analysis and the follow-up policy reforms, where relevant.

My Department has a number of responsibilities in supporting the Spending Review process. These include at the highest level: managing the strategic direction of the overall process, coordinating the Spending Review oversight group, liaising with the analysts participating in the process, tracking the progress of evaluations across Departments, and organising quality assurance groups and publication.

In addition to this my Department directly participates in the process by undertaking research and evaluations of public expenditure. These evaluations consider a wide breadth of issues of strategic importance to my Department.

Finally, my Department indirectly contributes to the evaluation landscape through the leadership of the Irish Governmental Economic and Evaluation Service. Established in 2012, IGEES is a cross-government network of policy-analysts, which is headed by the IGEES Central Unit in my Department. This unit’s remit is to develop the capacity for evidence-informed policy-making across the civil service, including enhancing the ability of Departments to undertake quality evaluations.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 165, 167 and 172 together.

The Government's approach to public expenditure policy is set out in the Medium Term Expenditure Strategy (MTES) published in the Summer Economic Statement in 2021. The objectives of the strategy are twofold, to ensure that the level of core expenditure growth is sustainable over the long-term and that investment in expenditure protects and delivers improvements to public services. The framework under which the MTES is implemented must be responsive to the economic landscape and is reviewed throughout the year as part of the whole of year budget process.

A strong public service that delivers core public services and prudent investment in our public infrastructure contributes positively to the economy as Government has done over the past decade. The careful management of our economy and the public finances in recent years has allowed the Government to;

• Provide increased resources for core public services as demand for services grows, investing in a better quality of life for Irish people,
• Deliver record investment in essential infrastructural projects through the National Development Plan; supporting employment, economic development and regional growth,
• Put in place considerable supports for households and business to help them overcome the Covid pandemic, and most recently the price pressures arising from global inflationary pressures.

The Government did this while also ensuring the public finances remained in a sustainable position without impinging on our economic prospects and economic growth. Budget 2024, which delivered an overall expenditure package in services and infrastructure of €12.3 billion, continues the trend of this sustainable investment in society.

In terms of the reform and management of public finances and liaising with Departments there are a number of budgetary process in place, in line with international best practice, that broaden the approach to appraising, implementing and reviewing policies. These include;

• the annual Spending Review process,
• Wellbeing and Equality Initiatives,
• Performance Budgeting and
• Green Budgeting.

These are in addition to the ongoing and regular expenditure management of agreed Departmental ceilings which are the individual responsibility of each Department and Minister. My Department engages on an ongoing basis with all Departments to ensure budgetary targets continue to be met and that expenditure is managed within overall fiscal parameters. Drawdowns of funds are monitored against published expenditure profiles and there is regular reporting to Government on these.

Additionally, I would also advise that my department engages regularly in international fora such as OCED working groups and committees to share knowledge and discuss best practice around budgetary reform and ensuring value for money for the taxpayer. In terms of enhancing the efficiency and effectiveness of policy delivery, improving and supporting the evaluation capacity within Departments is an important part of the reform programme. Supported by the Irish Government Economic and Evaluation Service (IGEES), this has led to the development of a number of additional processes and reports to support the budgetary process, such as the annual Spending Review. The IGEES network also supports civil service wide opportunities for collaboration and discussion of best practice in policy evaluation and evidence based policy making.

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of infrastructure this Government has committed to €165 billion in capital investment through the National Development Plan (NDP) published in 2021. As a percentage of national income, annual capital investment is now among the largest in the EU. In 2024, almost €13 billion will fund vital infrastructure in areas such as social housing, transport, education, enterprise, sport and climate action. Achieving value for money and reducing cost and schedule overruns is a vital part of NDP delivery.

In terms of prudent management of capital projects, in March this year, I secured Government approval for six priority actions which:

• Brought significant reductions in the administrative burden in delivering major capital projects, through streamlining the Public Spending Code (to become the Infrastructure Guidelines);

• Saw the Minister for Public Expenditure, NDP Delivery and Reform take a direct role in overseeing delivery of the NDP through chairing the Project Ireland 2040 Delivery Board;

• Asked for capacity reviews of departments and agencies with significant delivery programmes to be carried out, where appropriate, to ensure that adequate resources for project delivery are in place;

• Saw additional reforms to the Capital Works Management Framework, which sets out the contracts used for public capital projects;

• Saw direct reporting to Government on NDP delivery on a quarterly basis throughout 2023 and 2024 and

•An independent evaluation of NDP priorities and capacity.

This package represents a fresh approach to securing delivery as part of my Department’s enhanced remit around the NDP.

In summary, there is a focus now on supporting and streamlining the delivery of NDP projects in a timely manner, while ensuring value for money for the taxpayer. These reforms will boost the delivery of the critical infrastructure needed to support a growing economy and to secure higher living standards for those living here.

With regard to social housing, this is a vital part of the Housing for All plan which has the aim of ensuring that everyone in the State has access to a home to purchase or rent at an affordable price. Budget 2024 allocated €4.1 billion in total to Housing for All. This funding will support the provision of an additional 28,000 households overall; meeting the social housing needs of an additional 21,830 households and supporting a further 6,400 to buy or rent at an affordable price. This shows the Government's commitment to prioritising housing as a cornerstone of its expenditure policy.

With regard to core current expenditure and the ongoing social and economic needs of the country, Budget 2024 raised the ceiling for core current expenditure to almost €79 billion for the coming year. This is an increase of 5.9 percent on 2023 and once again reflects the Government's clear vision for the continuous improvement and delivery of better public services.

The Government's expenditure policy and framework is set out in the Medium Term Expenditure Strategy (MTES), in the Summer Economic Statement 2021, and this articulates the prudent management within which current expenditure is managed. Being conscious of the pressures on households and business from inflation, that will remain with us until the end of the year and into early 2024, the Government had to balance the short term requirements of society with the medium term sustainability of the finances.

That is why Budget 2024 also included a package of temporary expenditure Cost of Living measures costing €2.3 billion that will benefit the most vulnerable households more. Making such measures temporary in nature means they are not built into the core and therefore do not roll into commitments in the following years.

The adoption of this dual policy approach to expenditure ensures sustainability into the medium term while also responding to emerging needs.