Simon Coveney
Question:105 Mr. Coveney asked the Minister for Finance the reason public spending is running so far ahead of budget in the first five months of 2002; and if he will make a statement on the matter. [14408/02]
Written Answers. - Public Spending.
Overall the year-on-year increase in voted expenditure at end-May was 27%, which is in excess of the annual increase provided in the Estimates of 14%. Year-on-year percentage increases during the early part of the year are affected by a variety of factors such as the timing of payments this year, the level of spending in the corresponding period last year and the absolute size of the figures being compared.
Spending to date in 2002 includes a number of such timing factors. For example, social welfare spending to end May is up 33% in comparison with an annual Estimates increase of 25%. However, this includes spending for a full five months of the weekly rate increases in both budget 2001 and budget 2002, whereas spending to May 2001 included only two months of the budget 2001 increases. Furthermore, the child benefit increases in budget 2002 are effective from April 2002 in comparison with the June 2001 payment of the budget 2001 increases. Stripping out the impact of these factors would bring the increase back to 25%, exactly in line with the projected increase for the year as a whole.
The PPF pay increases also have a timing impact. The full cost of the 1% lump sum from 1 April 2002 is included in the end May figures but the year-on-year impact of this will diminish over the year. In the case of health spending, the end May figures include an extra week's payment to the health agencies which was not made until June last year.
For some Departments, for example, Education and Science and Agriculture and Food, the level of spending to end May 2001 was unusually low and therefore the year-on-year percentage increase is higher than it would otherwise have been if spending in the base year – 2001 – had been as expected.
Notwithstanding these timing issues, there are pressures on expenditure in some areas such as demand led schemes in the health area, capital expenditure on national roads and prison officer overtime, for which additional funding will be provided. Departments have been required by Government to take appropriate measures to ensure that expenditures are controlled over the remainder of the year and to make appropriate adjustments to ensure that the final overall outturn for expenditure will come in line with the original plan for the year as whole. This is a normal procedure following a mid-year review of trends to date.