Conor Lenihan
Question:32 Mr. C. Lenihan asked the Minister for Finance whether higher legislative controls are needed to keep public spending in line with his stated policy objectives. [19552/97]
Written Answers. - Government Expenditure.
Conor Lenihan
Question:84 Mr. C. Lenihan asked the Minister for Finance if his attention has been drawn to two recent statements by economists on formal mechanisms to bring public spending under control. [19551/97]
Conor Lenihan
Question:153 Mr. C. Lenihan asked the Minister for Finance the plans, if any, he has to introduce value-for-money assessments of domestic spending as is the policy in relation to EU Structural Funds. [19553/97]
Conor Lenihan
Question:154 Mr. C. Lenihan asked the Minister for Finance if he has satisfied himself with the current mechanisms available to keep the level of public spending under control. [19554/97]
Conor Lenihan
Question:155 Mr. C. Lenihan asked the Minister for Finance if his attention has been drawn to New Zealand's Fiscal Responsibility Act, 1994; and if he will introduce similar legislation into domestic Irish law. [19555/97]
I intend to reply to Questions Nos. 32, 84, 153, 154 and 155 together.
This Government is committed to sound management of the public finances. In our programme we have identified key priorities to include (1) to run a current budget surplus; (2) to eliminate Exchequer borrowing over the next two to three years, if present conditions continue, and (3) to limit net current spending growth to 4 per cent and to reduce overall Government spending as a share of national output.
The Government's commitment to keep public expenditure under control is clearly demonstrated by the publication of the 1998 Estimates last week which involved a 1.8 per cent increase in net current expenditure, well below the Government 4 per cent limit.
In my statement on the publication of the Estimates, I indicated the Government is determined that whatever happens during 1998 by way of unavoidable additional costs, the 1998 outturn will be below the 4 per cent limit set out in its programme. One of my priorities will be to ensure that adequate administrative mechanisms for managing and controlling public spending are in place to ensure that the limits on spending set out in our programme are adhered to, not just in 1998 but for the life of this Government.
Setting a specific limit on public spending growth is a very effective tool for managing and controlling public expenditure. However, if the political will exists, as it does in the case of this Government, to ensure adherence to these limits, the need for higher legislative controls along the lines of the New Zealand Fiscal Responsibility Act, 1994 is not so pressing. This is not to say that the process of public expenditure management should not be subject to continuous rigorous appraisal. Any means of further developing and strengthening the process will always be considered by the Government. Any studies of the issue will, I assure you, be very carefully considered.
In this regard the Government's programme indicates that placing "Substantial emphasis on quality and effectiveness in public expenditure programmes" will be a key policy priority.
In settling the 1998 Estimates, the Government gave detailed consideration to the expenditure allocations. Ensuring that programmes are run as efficiently and as effectively as possible formed a major part of that consideration.
However, it is also important that an emphasis on quality and effectiveness is built into the whole expenditure process if the commitment in the Government's programme is to be achieved.
Accordingly, in July, the Taoiseach announced the Government had agreed a schedule of expenditure reviews to be carried out over the next 12 months as part of a three-year programme of such reviews. Continuing review of public expenditure programmes is a central part of the public sector reforms being introduced under the strategic management initiative.
The aims of these programme reviews are: (a) to provide a systematic analysis of what is actually being achieved by expenditure in each programme; (b) to provide a basis on which more informed decisions can be made on priorities within and between spending programmes; and (c) to ensure that the public get good value for money. The reviews are to be carried out jointly by individual Departments and the Department of Finance.
As well as the public expenditure reviews which I have just outlined, arrangements are also in place for conducting value-for-money assessments of domestic spending.
The Comptroller and Auditor General, under the provisions of section 9 of Comptroller and Auditor General (Amendment) Act, 1993, is empowered to carry out specific examinations as he considers it appropriate in relation to economy and efficiency in the use of public moneys. The effectiveness of certain management systems — the systems, procedures and practices used by a Department to evaluate the effectiveness of its operations — may also be examined by the Comptroller and Auditor General. These examinations are what are known as value for money examinations, and the Comptroller and Auditor General has completed and published 18 reports of such studies to date which have provided an extremely useful examination of a wide range of expenditure programmes.
Section 19 of the Comptroller and Auditor General (Amendment) Act, 1993 also places a responsibility on accounting officers of Government Departments and offices to exercise economy and efficiency in the use of resources so that value for money is obtained. Accounting officers are answerable before the Committee of Public Accounts for the use of resources under their control.
I am satisfied that the existing arrangements for managing and controlling public expenditure are adequate. However, as I have outlined, developments are taking place in this regard under the strategic management initiative which will improve and strengthen the process of expenditure control.