Dáil Éireann debate -
Tuesday, 22 Nov 2005

Vol. 610 No. 4

Estimates for Public Services 2006: Motion.

Minister for Finance (Mr. Cowen)

I move:

That Dáil Éireann commends the 2006 Estimates for Public Services (Abridged) published by the Minister for Finance on 17 November 2005.

The 2006 pre-budget Estimates provide for gross expenditure of approximately €48.5 billion. Of this approximately €42.2 billion is current and approximately €6.3 billion is capital. It represents an increase of almost €3 billion over 2005 or an increase 6.6%. It is important to stress that the Estimates provision for 2006 is a reflection of the cumulative investment in improving public services which this Government has undertaken since assuming office in 1997. We have been able to create the resources to finance this investment by sound management of the economy and the public finances. This investment has delivered real improvements in the quality of the public services and is making a real difference in so many areas as the following examples show: a reduction in the pupil-teacher ratio at primary level from 22.3 to 1 to 17 to 1; the creation of 30,000 child care places from a base of zero which we inherited; approximately 30,000 additional frontline staff in the health services; significant real increases in all social welfare payments; one in three income earners out of the tax net this year compared to the one in four figure which we inherited. I could list many more such examples. These are real outputs which are improving the quality of our public services and the quality of life for our citizens.

Clearly we need to continue to invest and ensure that we get outputs commensurate with that investment. This investment must continue to be underpinned by sustainable economic and budgetary policies. The Estimates which I commend to the House today are based on this approach.

Our public finances are extremely sound. We will comfortably achieve our budget targets for 2005. I expect the economy to grow close to its potential rate of 4.5% to 5% over the medium term. While these rates of growth will be lower than in the previous decade they are strong by international standards. We have, by any standards, made remarkable economic and social progress since 1997. We have achieved an average economic growth rate of 7%, more than twice the EU average. Our debt GDP ratio will be approximately 29% at year end, compared with 65% when we took office. With a record high of nearly 2 million in work, approximately 500,000 more are employed compared to when we took office.

The risks ahead include oil prices, interest rates, increased international competition for investment and in product markets. We will continue with prudent fiscal policies to ensure we have the flexibility required to deal with economic shocks, to promote sustainable economic and employment growth and competitiveness and to tackle social inequalities.

This year gross public expenditure is expected to be approximately €45.5 billion. A small underspend on current expenditure of approximately €75 million is expected. Capital spending in 2005 in cash terms will be approximately €6 billion capital, including carryover of approximately €137 million from 2004. This represents 15% more than the equivalent spend in 2004. The multi-annual system for managing capital, which we now operate, with its 10% carryover arrangement facilitates better management of capital programmes and projects. It ensures that significant amounts of money are not lost to the capital budget, and as a result €286 million of capital not spent this year will be available to Departments for spending next year.

Turning now to the 2006 Estimates, approximately €2.7 billion of the overall additional spending provision of €3 billion is allocated to day-to-day public services bringing the total gross provision to €42.2 billion for the year. This is a 6.9% increase on the 2005 forecast outturn. The approach of the Government in framing the 2006 Estimates has been to target the additional resources of approximately €3 billion to improve services in key priority areas, particularly health, education and welfare services. Approximately €1.9 billion or 70% of the additional €2.7 billion is provided for these three priority areas. The Department of Health and Children allocation for current expenditure is more than €12 billion, an increase of €750 million or about 9% on an underlying basis when account is taken of a number of exceptional one-off expenses this year in respect of the establishment of the HSE.

In addition to this €750 million increase, a provisional allocation of €400 million is being made in 2006 towards the cost of repaying charges for long-stay care in former health board funded institutions. Some €250 million is provided for service improvements including: some €100 million for disability and mental health services; €60 million for commissioning of new units; €16 million for primary care services; €13 million for the national treatment purchase fund; €10 million for emergency planning, and €9 million for medical education and training.

The Government is strongly committed to investment in education and the general area of training and upskilling. Reflecting this the Department of Education and Science allocation in 2006 will increase by €530 million or approximately 8% to €7.2 billion. This will help fund the cost of service improvements in a number of key areas, including: a one point reduction in the staffing schedule for primary schools with effect from September 2006 and a further one point reduction in 2007, creating about 200 additional posts in primary schools in 2006 and 2007; the full year cost of some 590 additional resource teachers for pupils with special needs appointed in September 2005; the cost of some 270 new posts under the delivering equality of opportunity programme; measures to ensure that the three for two seating arrangement on school buses is phased out by December 2006 and that all public and private sector buses are equipped with seat belts by September 2007 and an increase of 10.8% in funding for capitation grants, for the maintenance and upkeep of our schools. This allows increased payments significantly above the rate of inflation for all primary and secondary schools.

Within the productive sector, the Government is giving priority to spending on the key area of research and development. The combined allocation for this purpose in enterprise and third level education in 2006 will be €358.6 million, an increase of 12% on 2005.

The increase in the provision for current spending on the Garda Síochána Vote is €105 million or 9% to €1.3 billion. This will facilitate the implementation of the Government's commitment to expand the force by 2000 to a new complement of 14,000. At the end of 2005 the number of gardaí employed will be 12,250. The 2006 provision will allow for the employment of some 12,920 gardaí in 2006, an increase of 2,000 on 1997 levels.

Expenditure on child care has increased from about €500 million in 1997 to about €2.3 billion this year. In 2006, I will provide more than €100 million for the equal opportunities child care programme — €55 million in current spending for staffing grants to community child care facilities and supports to city and county child care committees and €47 million in capital spending. The capital allocation will bring the number of extra child care places funded under the programme from a nil base in 1997 to approximately 30,000 at the end of 2006. I will make further provision for child care on budget day.

The allocation for social welfare is €12.4 billion on a pre-budget basis. I will make separate provision for increases in social welfare payment rates on budget day. Since 1997 the Government has increased spending on: pensioner incomes from €1.3 billion to almost €3 billion; child benefit from €0.5 billion to almost €2 billion; widows and lone parents from €1 billion to €2 billion; and illness disability and carers schemes from €0.8 billion to more than €2.1 billion.

Expenditure on the provision of services for people with disability will be some €3 billion this year, an increase of more than €400 million on 2004. The 2006 Estimates provide for spending of almost €3.3 billion for disability specific services. This is an increase of more than €300 million or 10% and includes €135 million under the special disability package announced in my last budget.

In September, the Government committed to reaching the target for overseas development aid of 0.7% of GNP by 2012 and an interim target of 0.5% of GNP in 2007. The 2006 Estimates provide for a total commitment of €675 million or 0.47% of GNP for overseas development aid in 2006. This represents an increase of €129 million or 24% on the 2005 allocation of €546 million. Ireland's contribution rate at 0.47% of GNP compares with current indicative figures of 0.19% in the United States, 0.3% average in the OECD and 0.43% average in the EU for 2006.

The pre-budget 2006 Exchequer capital provisions reflect the figures set out in my last budget. Total cash spend on investment on a pre-budget basis will be almost €6.6 billion, inclusive of the £286 million carryover from 2005. This is an increase of almost €600 million or 10% more than 2005. I will announce a new five year capital envelope on budget day. This will be consistent with the Government's overall priority commitment to capital investment and it will incorporate the increased investment on transport under the Transport 21 framework.

I am absolutely determined that the principle that every euro of the taxpayers money must be well spent should apply. We must in particular ensure that best practice is employed in the appraisal and management of ICT and capital programmes and projects. We must also be prepared to learn lessons and address shortcomings which may come to light.

Building on reforms such as the five year multi-annual capital envelopes, revised capital appraisal guidelines and planned improvements in construction and construction related contracts, we recently announced two initiatives to further improve the approach to securing value for money. These were an initiative on management of ICT projects and consultancies and additional measures on value for money that I announced on 20 October 2005. Departments have been asked to give effect to the measures that can be implemented immediately and work is under way on updating the necessary guidelines and other necessary steps to implement all these measures.

The gross provision for 2006 to fund public service pay and pensions is €16.4 billion, an increase of €1.l billion or 7%. It makes full provision for the final phase of Sustaining Progress and includes some €430 million for service improvements and extra numbers. The extra numbers are primarily employed in a frontline capacity in areas of health, education and the Garda Síochána. Despite the contrary perception created in some quarters there has not been an increase in the share of overall current expenditure attributable to pay and pensions. In 1997, this was around 40% of gross current spending and in 2006 on a pre-budget basis it is nearly 39%.

The total numbers employed in the public service in 2005 is just over 290,000. The Government remains committed to controlling public sector numbers as part of its approach to managing public expenditure and securing better value for money, but the policy is not being implemented indiscriminately. We have consistently taken the line that priority must be given to frontline and essential services.

Where necessary the Government has been prepared to increase numbers to meet priority needs. We have held numbers in the civil service, the local authority, defence and non-commercial semi-State sectors at below their 2002 levels but we have allowed increases in staff in the key areas of health, education and gardaí to improve the delivery of important services to the public.

Health and education are labour intensive areas. If we are to have lower pupil-teacher ratios and better treatment in all areas of health the additional frontline staff in these areas are inevitable. In no sense is there a blank cheque approach to sanctioning extra posts in these areas but we will continue to agree targeted enhancements where such is consistent with implementing Government policy.

The Government has continued to successfully manage the public finances and the economy. Our fiscal policies have generated increased prosperity and the necessary resources to fund real improvements in public services and to address social needs. We are providing an extra €3 billion on a pre-budget basis bringing the total 2006 provision for the public service spending to €48.5 billion. We will make additional provision for spending on budget day for social welfare, child care, care of the elderly and investment.

I commend the motion to the House.

Mr. Bruton

I join Deputies Rabbitte and Kenny in describing this process as hopelessly inadequate as a means to scrutinise value for money in public spending. This must change and although the former Minister for Finance, Mr. McCreevy, promised change, along with Deputy Cowen and the Taoiseach, we find ourselves in the same rut, examining meaningless Estimates. It is similar to asking a consumer to buy from a mail order catalogue and removing product specification, prices and the manufacturer's guarantee. No consumer would purchase on that basis but we are asked to sign up to €50 billion on behalf of taxpayers. It is ridiculous, unacceptable and must change.

The Minister is asking for an act of faith that he and his colleagues will deliver value for money. With the greatest of respect to him, there is evidence that he is not delivering value for money that people have a right to expect. To come into the House with Estimates that do not give us any foundation for making proper decisions about the allocation of moneys is unacceptable. For example, there is not a single mention of the level of performance last year. Is that not the first thing for which the Minister should ask? If we are being asked to sign up to a figure of €50 billion in spending, we must ask how we got on last year with the €46 billion that we spent. All the catalogue the Minister has produced tells us is the size of the bill that had to be funded last year. He cannot even reconcile the size of the bill to which we had to sign up with the individual items. He is still quoting estimates. There is no reconciliation. However, that is only a minor issue. The truth is that not even a two-bit company would sign up to and accept from an accountant the figures we are expected to accept and we represent 2 million taxpayers. That is the reality.

It is worth examining what happened last year when we went through the very same charade and Ministers went out with their glossy brochures announcing all of the wonderful things that would happen in 2005. I have chosen ten porkies delivered by the Minister's colleagues this time last year in the Estimates process. We were told that an extra 230,000 would have a medical card or a doctor only card. The reality is that at most there will be an extra 3,000 or 4,000 with cards. It was due to happen last April but there will only be 3,000 or 4,000, not 230,000.

We were told there would be a major initiative in accident and emergency departments that would reduce waiting times. One year on there are 85 more patients on trolleys on a regular basis.

We were to have three new acute medical units, one of which was to be located in Beaumont Hospital in my constituency. That acute medical unit did not materialise, even though the money was voted for its development.

The Minister for Justice, Equality and Law Reform announced that we would have an extra 1,100 gardaí. The truth, as revealed by the Minister's own Estimates, is that less than half that number has been delivered. The Minister also promised to implement the Children Act through new allocations to the probation and welfare service. That has not happened.

We were to have an integrated ticketing system in Dublin as announced by the Minister for Transport, Deputy Cullen. That has not happened. We were also to have a central railway station in Dublin, which certainly has not happened. We were to have an extra 367 km of new roads, for which €245 million would be provided by way of PPPs. There is no evidence that this has happened. As far as I can see, the PPPs have not materialised, although it is almost impossible to find out what is happening in that regard.

The Minister for Finance said this time last year that the Government was still committed to reducing public service numbers by 5,000. The truth, as evidenced by his own figures, is that he has increased public service numbers by 15,000. His target was to reduce the number by 5,000. He has not met his own target.

Last year we were to have an extra 13,000 social and affordable homes. The mid-year figures which are all the Minister can come up with indicate that 3,300 such homes had been built by that stage. This means that we are not even one quarter of the way towards reaching the target. It is not acceptable that the Minister has come back to the House this year, having delivered that number of commitments which have not materialised, and expects us to again accept, on faith, the announcements Ministers are making left, right and centre.

What the Minister needs is a real process of scrutiny. I have examined the Department of Justice, Equality and Law Reform with this in mind. In the past four years the total spend in that Department is up 43%. Against this, let us look at what is happening on the ground. As we know, crime levels were almost static over those four years. However, what has deteriorated rapidly is the number of detections. The detection rate is down dramatically with regard to serious crime, serious assaults, non-headline crimes and so on. It is down on every front. The risk of suffering an assault on the streets is rising. We have also seen problems with regard to the seizure of illicit drugs. The amount being discovered is falling, even though there is clear evidence on the streets that the drug abuse epidemic is more severe than ever and the trade more violent and threatening to communities. Is it not reasonable to ask the Minister for Justice, Equality and Law Reform who wants us to vote through an extra €184 million for his Department why he has not delivered to date? Why are there no performance indicators attached to his Estimates to indicate we are getting something worthwhile for the money spent?

We could conduct the same scrutiny process in the Department of Health and Children. The Minister for Health and Children has received a 54% increase in her budget since the last general election. The number of in-patient admissions is only up by 0.8%, a tiny increase. There has been a dramatic reduction in the proportion with medical cards. We are told the Minister's key health strategy is to improve access to primary care and keep people out of hospital. That is not happening. Primary care centres have not been delivered. Basic eligibility has not been improved.

Where has the Department's money gone? We have seen the medication bill go through the roof. It has gone up by 50% in just three years. Why should we accept, on faith, that it should rise so rapidly at a time when we are giving fewer people access to primary care? There is something seriously wrong with the contracts designed for delivering medication to the health system. The dogs on the streets know this but nothing is being done because we vote through money, year after year, without serious scrutiny. There is no opportunity for proper scrutiny before decisions are made. That is not acceptable.

Accident and emergency departments are another source of concern. Some will swear there has been an enormous increase in the number going to accident and emergency departments, which is exerting major pressure on hospital services, but that is not the case. The number attending accident and emergency departments in the past four years has risen by 2.8%, only a few thousand per year. However, the people concerned are facing ever-worsening conditions.

Let us look at what is happening in the hospital system. The Minister for Finance has said he is releasing money to frontline services. The truth, as the Minister's figures show, is that in the past four years the number of nurses in voluntary hospitals has declined. We now have fewer nurses in our voluntary hospitals today. Despite the fact that the Minister for Health and Children has recruited an extra 5,500 into the health service, we have fewer nurses working in acute hospitals than four years ago. What is the logic of this? Why should we vote for this again? Why should we vote for more people in back office activity in the health service than in front office activity? That is what has happened in the past four years; frontline services have reduced, proportionately, although not by much, admittedly. The whole thrust of what we were told was happening was that resources were being released to frontline services, but when we look at the numbers, we see the opposite is happening.

There is something wrong and it is in this House that the process of reform must be generated. If we just let the whole process roll on, year in, year out, as we have been doing, we will not see change in the way decisions are made. It is crucial that we start to make those necessary changes. Why has the Minister for Health and Children been entitled to say to every taxpayer that she wants €2,500 more from every family in the country to run the health service when families cannot see extra value to the tune of even €2, not to mention €2,500? There must be criteria against which we make these decisions. There must be performance tests. Ministers and their agencies must come up to the line, announce their targets for the year and be judged at the end of it on them. Instead of this, we have phoney targets being announced by Ministers every year that have no credibility with the public or this House, but we have not reformed the system in order that we can bring serious pressure to bear and actually effect change.

With regard to overall macro-management, the Minister has had extraordinary good fortune to be in government at a time when there has been enormously increased revenue. He has set out certain broad criteria and I presume he still subscribes to the principles that inspired his Government. He said he would keep growth in current spending in line with growth in GNP. This was the golden rule that his predecessor, former Deputy McCreevy, advocated and was supposed to characterise public spending and policy. The rule makes sense because it means the Government does not have to increase the tax take as a proportion of GNP. However, that is not what has happened. Since 2001 the proportion of current spending as a proportion of GNP has gone up from 25% to 30% and it is up again this year. There is something seriously wrong when the Minister is looking for that extra proportion, a bigger slice of the cake, while not delivering on the ground. There is something seriously wrong with the way we are allocating our money.

The Minister set himself the target of investing 5% of GNP in public investment programmes. That is not being delivered. It has not been delivered for any year since 2002 and the cumulative shortfall from the Government's target by the end of 2006 will be €2.5 billion of investment. I do not believe the Minister is unwilling to spend the money. The problem is we have not geared up the public service to create the capacity to bring bankable projects to the starting line. We do not have a strong pipeline of good projects other than in roads and education, which for all its weaknesses has a pipeline of sorts.

The objectionable feature of Transport 21 is the projects were announced in 2000. I do not mind the Minister seeking plaudits in Dublin Castle for relaunching them but the fact that in the five years since then not a single foot of progress has been made on any of them is offensive. The pre-planning process has not even started, which is unacceptable. We cannot get value from our infrastructure because we have not made the effort to bring ideas and projects through. Maybe there are not sufficient members of staff in the public service or maybe the Minister did not bother to motivate them. Maybe in the hiatus created by three or four different Ministers they lost sight of the ball.

People expect the Minister for Finance to deliver projects for their money and can see the yawning gap in our infrastructures but something is wrong when ideas are not advanced for five years. He boasts that roads programme projects due to be completed by 2006 will now be completed in 2010, without a blush from the Minister for Transport, who does not see how the public might be dissatisfied. He thinks he deserves plaudits for being four years late. Who was the Minister trying to fool this time last year when he said he was still committed to a 5,000 reduction in public service numbers? It did not happen in year one, year two or year three so we are 15,000 up rather than 5,000 down. Why persist in telling us things which are plainly not Government policy? They are designed to go down well with some commentators but are not Government policy and, in that regard, we are being sold a pup.

This is a constrained and effectively meaningless debate. The Minister plans to announce in the budget a new approach in this House. We have received input from the Committee of Public Accounts and Deputy Rabbitte's work and I have carried out my own research. It is not adequate to say there will be better evaluation. That is an in-house process, not an exercise in public scrutiny. If the Government wants better evaluation I suggest the plans be published. A manager of a project should demonstrate progress before receiving another tranche of money. If the Minister for Health and Children says in this House there will be three medical units she should come back shamefaced to explain why they have not been put in place, or why medical cards are not in place, even though the money was voted. The money is spent but there are no results. We need that sort of debate in this House. It might be embarrassing for Ministers but it would filter down and give rise to a different dynamic.

Ms Burton

The fates seem to conspire to undo this Government. Every time Ministers have a dramatic announcement to make and billions to wave around they are met with yawns of boredom by a cynical public that has heard it all before. Last week was no different when the Book of Estimates was published. Barely a day's wonder and along comes Roy Keane to knock it off the news. Which would one prefer to read about, Roy's rows or Brian's billions? There is no contest in terms of news value. We are witnessing a bonfire of Fianna Fáil vanities and, for occasional diversion, a small sideshow from a junior partner that cannot decide just yet whether it wants to contest the election with the Government or the Opposition. It is the curse of Janus, the Roman god with a double-faced head, each looking in opposite directions.

The Book of Estimates is a chronicle of wasted chances and hardly a line is original. It is another dose of promises made time and again, for more gardaí, more teachers, more medical cards, all announced so often before and with ever increasing fanfares but as worthy of credibility as an Al Capone declaration of innocence.

The American journalist Walter Litman wrote that a credibility gap is a result of a deliberate policy of artificial manipulation of official news. This Government has overdosed on this type of artificial manipulation of news by announcing the same thing so often and packaging it as something new. All we have, however, are promises made and forgotten. For example, Fianna Fáil said in the general election campaign it would cut class sizes for all children under nine years of age to 20 or less. I will put a simple question to the Minister for Finance, Deputy Cowen and the Minister for Education and Science, Deputy Hanafin. Are we any closer to that target after last week's Estimates for the Department of Education and Science and the indicative falls in class size numbers? In Blanchardstown many classes are close to 40, the largest number of super-sized classes in the country. There is not the remotest chance that all children under nine will be in classes of 20 by the next election. It was a cynical promise, which they were aware of when they made it but, true to form, they made it and broke it. True to form they also think they can resurrect it and present it as something new and bold when it is nothing more than an old promise reheated and rehashed under a new shiny label.

In the overblown health strategy, waiting lists would be gone by 2004 and there would be 200,000 full medical cards. The result has been an appalling vista that on its own merits electoral defeat. Countless billions have been spent with little to show. As for the promised billions for Transport 21, Ministers might not know but last week saw unprecedented delays on the M50, with traffic jams stretching every morning, afternoon and evening from the toll bridge to Santry in one direction and back to Templeogue in the other. The M50 is beginning to resemble one of Dante's circles of hell, yet the permanent civil service, in the person of the Secretary General of the Department of Transport, told the Committee of Public Accounts just a week ago it would be years before electronic tolling or other improvements to the gridlock will come about. In the meantime this week's misery will get worse when the upgrade to the road starts next year and an estimated 7,900 lorries hit the M50 and the toll bridge every day. Needless to remark, Transport 21, for all its billions of taxpayers money to spend has nothing to say about the toll bridge in its five little pages with a miserable map which even had Dublin's topography wrong.

The public spending Estimates for 2006 prove beyond doubt that this is a tax and spend Government. It would not be so bad if taxpayers got value for money but often they do not. The Government has been in power for eight and a half years and has done little of significance to ensure the efficiency and effectiveness of big spending Departments like the Department of Health and Children, the Department of Education and Science and the Department of Social and Family Affairs. As a result people are frequently subjected to wholly inadequate levels of public service. At least in Angola or elsewhere in Africa people might be treated with human decency, in contrast to a three-day wait on a trolley.

Debate adjourned.