From Department of Public Expenditure, NDP Delivery and Reform
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Good afternoon, Chairman and members of the Committee.
I am here this afternoon to present to the Committee a proposal for four Supplementary Estimates, two within the Public Expenditure and Reform vote group and two within the Finance vote group.
On the Public Expenditure and Reform vote group a Net Supplementary Estimate of €1 Thousand (Gross €5m) in respect of Vote 12 – Superannuation and Retired Allowances, and a Supplementary Estimate of €470,000 in respect of Vote 17 – Public Appointments Service (PAS).
On the Finance Vote Group a Supplementary Estimate of €21.2m is required in respect of Vote 7 – Department of Finance and a Supplementary Estimate of €4.104m is required in respect of Vote 9 – the office of the Revenue Commissioners.
Vote 12 - Superannuation and Retired Allowances
Pensions and lump sums paid under the pension schemes for established civil servants make up just under 90% of total gross expenditure on the Superannuation and Retired Allowances Vote, so the main driver of the annual cost is the number of established civil servants who retire in the year.
However, it is particularly difficult to estimate the number of retirements from one year to the next for the following reasons -
The 2019 Gross Estimate for Vote 12 was €609.9 million, which was based on a forecast of 1,700 retirements from the established scheme.
As a general rule, for each person who retires, the once off lump sum paid out is three times the size of the annual pension. Accordingly, increases in retirement levels have a particular effect on Subhead A4 - which provides for the lump sum payments to established civil servants. Subhead A4 is therefore a key driver of expenditure variance on the Vote in any given year.
At end October 2019, €90.4 million has been expended from Subhead A4 compared to the original 2019 full year estimate of €101.6 million. Further expenditure of up to €25.3 million by end year is estimated resulting in an overall projected excess of approximately €14.1 million on the Subhead.
It is now estimated that total gross expenditure on the Vote for 2019 may be in the region of €614.9 million – some €5 million in excess of the Gross Estimate of €609.9 million as voted previously by the Oireachtas.
The Committee should also note that the level of the Gross Supplementary Estimate being sought will be mitigated somewhat by anticipated increased levels of Appropriations-in-Aid.
Appropriations-in-Aid for 2019 were estimated at €238.6 million.
Receipts with respect to the Single Public Service Pension Scheme are ahead of profile year-to-date. Total appropriations in aid are now projected at €243.6 million by year end, €5 million more than originally expected. This excess amount will act to reduce the net effect of the Gross Supplementary Estimate.
Vote 17 – Public Appointments Service
Moving now to the Supplementary Estimate in respect of Vote 17, the Public Appointments Service or PAS The supplementary estimate in respect of the PAS Vote will bring the total 2019 estimate for that Vote to €15.503 million – a 3.1% increase on the original 2019 REV allocation of €15.033 million.
The supplementary estimate reflects the higher than expected levels of recruitment activity to meet the needs of the Civil and Public Service in the light of the strong economic environment, demographic trends, recruitment demand driven by the UK exit from the EU (Brexit), ongoing Public Sector reform, and the continued need to build resource capacity and capability across the Civil and Public Service.
Vote 7 – Department of Finance
The supplementary estimate for Vote 7 is to meet the cost of legal settlements entered into by the State following advice from Senior Counsel. The settlements are in respect of protracted legal proceedings arising from the Air Travel Tax introduced in Budget 2009 and agreements were entered into following mediation with the Hon Justice Paul Gilligan.
Vote 9 – The office of the Revenue Commissioners
The supplementary estimate for Vote 9 is to meet the 2019 costs associated with developing the Brexit infrastructure required as part of our no-deal preparations. The Office of Public Works have been developing the Brexit infrastructure required at Dublin Port, Rosslare Europort and Dublin Airport on an agency basis on behalf of the Revenue Commissioners and have computed the apportioned costs as amounting to €4.104m in 2019.
Conclusion
In conclusion,
On vote 12 - Superannuation and Retired Allowances
I am satisfied that approval of the supplementary estimate of €1 Thousand net will confer the necessary legal authority to meet the pension entitlements of civil servants expected to retire up to the end of 2019.
On vote 17 - Public Appointments Service
I am satisfied that approval of the supplementary estimate of €470,000 will enable the wider public sector prepare for future challenges presented by a growing economy, rising public expectations, demographic trends and the continued need to build resource capacity and capability across the Civil and Public Service.
Vote 7 – Department of Finance
I am satisfied that approval of the supplementary estimate will enable the Department meet its requirements as outlined above.
Vote 9 – Office of the Revenue Commissioners
I am satisfied that approval of the supplementary estimate will enable the Office of the Revenue Commissioners to meet the 2019 costs associated with developing the Brexit infrastructure required as part of our no-deal preparations.
I commend these supplementary estimates to the Committee and I am happy to answer the Committee’s questions on these Votes.
ENDS