Speech
Further Revised Estimates: Presentation to Dáil
From Department of Public Expenditure, NDP Delivery and Reform
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From Department of Public Expenditure, NDP Delivery and Reform
Published on
Last updated on
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The Revised Estimates Volumes for the Public Service for 2019 , presented to the House last December, set out the allocation of Government Expenditure by Vote for 2019. In total, there is an amount of €66.6 billion in gross voted expenditure allocated in the REV. The vast majority of this provision relates to day-to-day current expenditure, amounting to €59.3 billion, with a further €7.3 billion allocated to capital expenditure.
The current expenditure allocations in REV 2019 reflect Government priorities. Funding for the key day-to-day public services of Social Protection, Health, and Education combined amounts to almost €47 billion. Indeed, these three sectors together account for almost 79% of total gross voted current expenditure.
€7.3 billion is allocated to capital investment in 2019. This represents an increase of €1.3 billion or over 22% on last year’s capital expenditure outturn. This level of investment will play an important role in delivering public infrastructure across Ireland, particularly in areas such as Social Housing, Education including for schools and higher education, Healthcare, and Transport. Additional funding is being provided for enterprise supports to support economic recovery and promote jobs growth in both the indigenous and foreign owned sectors. Increased funding is also provided to support investment in areas including flood defences and climate change mitigation.
Turing to some of the key sectoral spending areas. The allocation for Health for 2019 is over €17 billion, reflecting our commitment to supporting our health service. This represents an increase of over €1 billion on the amount spent in 2018. Given this level of resourcing we must ensure that increased resources are matched with increased levels of accountability and transparency in expenditure matters.
Housing has also been prioritised for 2019, with an overall allocation to the Vote of the Department of Housing, Planning and Local Government of €4 billion. This represents a significant increase in year-on-year terms, in particular in relation to capital expenditure which has increased by almost 19% compared to the 2018 outturn.
Turing to Education, this years’ allocation amounts to €10.8 billion, an increase of over 5% on the 2018 outturn. Investing in education delivers benefits for individuals, society and the economy. The increased allocation in 2019 will allow for the recruitment of additional teachers and Special Needs Assistants, and enable a more targeted investment in higher and further education to meet the skills and education needs of the labour market.
€20.5 billion has been allocated to the Department of Social Protection. This allocation includes provision for a €5 per week increase in the weekly maximum rates of all social welfare payments, with proportionate increases for qualified adults and those on reduced rates of payment. Jobseekers on age-related reduced rates of payment will benefit from the full €5 increase. These increases will be implemented during the course of next month.
In accordance with the revised Budgetary timetable introduced at European level as part of the “two pack”, the Estimates for 2019 were required to be published before the end of 2018. In the period since the publication of the REV in December, my Department has been engaging with the Department of Health and with other Departments in relation to how the increased costs of the National Children's Hospital project in 2019 will be managed within the overall agreed capital allocation for 2019 of €7.3 billion set out in the REV. This process concluded with the Government deciding last week to reallocate funding from a number of Departments to the Department of Health. Decisions in relation to this reallocation of funding were taken with a view to minimising any disruption to the rollout and delivery of key projects. I am now presenting Further Revised Estimates to reflect an additional allocation of €75 million in the gross capital expenditure amount for the Department of Health. The increase in the net voted Health Estimate is €65 million as the Department of Education and Skills has agreed to pay, in 2019, €10m of an existing €17m commitment to higher education facilities in the National Children’s Hospital. As this funding is to come from within the existing overall amount allocated to the higher education capital subhead, it does not give rise to a Further Revised Estimate for the Education Vote.
The increase in the net voted expenditure amount for Health of €65 million is offset by reductions across a number of Government Departments and includes:
A re-scheduling of €27m arising in relation to the A5 Motorway in Northern Ireland, from the Department of Transport, Tourism and Sport;
A re-scheduling of €10m arising in relation to the National Forensic Science Laboratory in the Department of Justice Vote;
An updating of the scheduled draw-down of €16m from the two Project Ireland 2040 Regeneration Funds, which are being profiled for expenditure throughout the course of both 2019 and 2020 without delays in project planning, design and delivery. This results in an adjustment of €3 million in the Department of Rural and Community Development and €13 million in the Department of Housing, Planning and Local Government;
Re-profiling of payments of €4m under certain programmes of investment in Communications, Climate Action & Environment;
€3m from the re-profiling of investment under the Flood Risk Management Programme of the Office of Public Works to allow for capacity to be built up over the course of the NDP period;
Revision of the schedule of drawdown of funding in the PER and Finance Groups of Votes totalling €3m. This adjustment is reflected in the Department of Public Expenditure & Reform, Public Appointments Service, National Shared Services Office and Office of the Revenue Commissioners; and
€2m through changes to the timing of payments relating to certain capital works by the Department of Culture, Heritage and the Gaeltacht, with full project delivery scheduled across both 2019 and 2020.
These changes outlined in the Further Revised Estimates amount to less than 1% of the original 2019 capital budget presented in December.
Over recent years, Ireland has made much progress in delivering projects on time and within budget. In particular, recent years have seen major progress in improving project delivery in water and wastewater, roads projects and public transport. Reforms are currently being considered which are designed to extend the same levels discipline, professionalism and performance across the public capital programme more broadly. In this regard it is important to note a number of measures which are currently underway to improve the State’s performance in delivering major projects. These measures are specifically focused on avoiding a repeat of sudden increases in costs associated with major capital projects.
New procedures are now being developed in the context of the ongoing review of the Public Spending Code and the new Medium-Term Strategy of the Office of Government Procurement, as part of a suite of actions to maintain the strong momentum in the delivery of Project Ireland 2040. In particular, I would like to draw your attention to revisions on the Public Spending Code and procurement practices to improve our performance in delivering major projects:
The Government will not pre-commit to major bespoke projects until there is clarity on final cost - after tenders have been received and evaluated.
Two stage procurement with parallel working will be avoided in most cases – preliminary works will not commence until there is full approval on the project.
The budgets for large bespoke projects will include a significant premium for risks so that these indicative costings more adequately reflect the holistic total for the entire project over its lifecycle.
Considerations is also been given to carrying out external expert review to rigorously test cost estimates and linking Advisory firm payments to performance.
Over the course of the National Development Plan, there will be a total investment of approximately €116 billion in key State infrastructure projects. To safeguard this investment, it is imperative that the Government puts in place the right structures to mitigate against the risk of capital costs overruns in the future. Adopting these measures will help to ensure a high level of discipline, professionalism and performance in the allocation of Government resources and the provision of capital projects going forward.