Select Committee on Finance, Public Expenditure and Reform, and Taoiseach debate -
Wednesday, 24 Nov 2021

Vote 17 - Public Appointments Service (Supplementary)

Chairman

I remind members of the privilege note. Members are covered if they are in the Houses. If they are joining the meeting remotely then they may not have full privilege.

Today we are dealing with the Supplementary Estimates for Vote 12 - Superannuation and Retired Allowances and Vote 17 - Public Appointments Service, PAS.

I welcome the Minister for Public Expenditure and Reform, Deputy Michael McGrath. We will now commence the examination of the Supplementary Estimates. I invite the Minister to give his opening statement.

Minister for Public Expenditure and Reform (Deputy Michael McGrath)

I thank the Chairman and members of the committee for taking these Supplementary Estimates today.

I will present to the committee a proposal for: a net Supplementary Estimate of €1,000 resulting in a gross Estimate of €34 million in respect of Vote 12 – superannuation and retired allowances; and a Supplementary Estimate of €3.665 million in respect of Vote 17 – PAS.

The Supplementary Estimate in respect of the superannuation Vote will bring the total 2021 Estimate for that Vote to €700.3 million gross and €339.9 million net. The Supplementary Estimate arises mainly due to higher costs than forecast for the year under the pension scheme for established civil servants as a result of a higher than expected number of retirements for 2021. The Supplementary Estimate in respect of the PAS Vote will bring the total gross allocation for the Vote to €20.455 million in 2021.

The additional allocation of €3.665 million sought for Vote 17 includes €800,000 of additional current expenditure to enable PAS to provide additional recruitment services to the HSE; and an increased capital allocation of €2.865 million in 2021 to allow for facilities upgrades, which have been carried out over a quicker timeframe than was originally envisaged. This increased capital expenditure in 2021 will not increase the overall cost of the project, but it will enable works to be concluded over a shorter timeframe. I understand that further detail on this request for Vote 17 has been provided to the committee.

On Vote 12, pensions and lump sums paid under the pension schemes for established civil servants make up 91% of total gross expenditure and, therefore, 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 a number of reasons, including the following: the majority of established civil servants will have a compulsory retirement age of 70; a number of people under age 60 retire each year under cost neutral early retirement or on grounds of ill-health; each year a number of former employees become eligible to claim a preserved pension entitlement; and the average pension benefits of lump sum and pension that will fall to be payable to new retirees in any given year will vary depending on the grades and years of service of that specific cohort of retirees.

The 2021 gross Estimate for Vote 12 was €666.3 million, which was based on a forecast of 1,650 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 2021, €118.6 million has been expended from subhead A4 compared to the original 2021 full-year estimate of €109.8 million. Further expenditure of up to €23.2 million by the end of the year is expected, resulting in an overall projected excess of approximately €32 million on the subhead. It is now estimated that total gross expenditure on the Vote for 2021 may be in the region of €700.3 million, some €34 million in excess of the gross Estimate of €666.3 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 by anticipated increased levels of appropriations-in-aid. Appropriations-in-aid for 2021 were estimated at €326.4 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 €360.4 million by year end, which is €34 million more than originally expected. This excess amount will act to reduce the net effect of the gross Supplementary Estimate.

In conclusion, I am satisfied that approval of the Supplementary Estimate of €1000 net will confer the necessary legal authority to meet the pension entitlements of civil servants expected to retire up to the end of 2021. Approval for the Supplementary Estimate - Vote 17 will also enable the PAS to deliver additional demand-led recruitment services to the HSE and conclude an upgrade of their offices in a shorter timeframe than previously envisaged. I commend the Supplementary Estimates to the committee and I look forward to our discussion.

Deputy Mairéad Farrell

Gabhaim buíochas leis an Aire as teacht os comhair na coiste chun na cúrsaí seo a phlé. It is always good to have the Minister in front of the committee, and I thank him.

On Vote 12, will he indicate how much was paid out in total last year for what is called "golden handshake" payments, and what was the highest single payment? What was the average payment in this regard? Will he confirm which Departments paid out most in this regard?

On Vote 17, what fees have been paid to external interviewers in the past three years? I have a number of other questions but I put those two questions first.

Deputy Michael McGrath

I thank the Deputy for her questions. I do not have the outturn for 2020 with me because we are dealing with the 2021 Supplementary Estimates. I can, however, answer a number of the questions she has put. For example, the average annual Civil Service pension last year came in at just under €24,500. That is up from a figure of €23,000 in 2019. The average Civil Service lump sum payment, in the year to date in 2021 to the end of September, was €73,100. For 2020 it was just under €69,600.

That is just to give the committee an indication of the average. As members knows, the lump sum is typically three times the level of the pension in respect of an individual person. I will obtain for the Deputy the figures for 2020 by way of the outturn. I believe the gross provisional outturn for 2020 is approximately €628.4 million in respect of the superannuation and retired allowances for Vote 12. Did the Deputy have another question?

Deputy Mairéad Farrell

I also have a question about the Commission for Public Service Appointments, the statutory body which sets standards for recruitment in the public service. It is also, in effect, the regulator. Does the Minister believe the regulator should be able to comment on matters relating to the regulation of public service appointments? I ask because of the remuneration of a particular Secretary General, as was recently reported in the media and debated at different committees. I wrote to the commission to ask its views and it told me it was not appropriate for it to comment. To be honest, I thought it was unusual, in some senses, that the regulator could not comment on matters pertaining to the regulation of public service appointments. I would like to hear the Minister's views and comments on that matter. Does he see a stronger role for the committee, in light of the recommendations made in the report that was recently published?

Deputy Michael McGrath

I thank the Deputy. In terms of day-to-day operations, the Public Appointments Service operates independently and the level of interaction I have with it on a day-to-day basis is limited. The Supplementary Estimate, in particular, arose as a result of the additional recruitment of medical and clerical staff, especially in the health area. The majority of the Supplementary Estimate relates to the ongoing works to upgrade and modernise the offices in Chapter House. That includes, for example, the modernisation of interview suites to include increased options for digital services and to allow for social distancing in face-to-face interviews and so on. For any individual recruitment campaign for a particular post, it is a matter for the Public Appointments Service as to whether it wishes to comment. I imagine the service is constrained in its ability to comment on any individual recruitment campaign but that is a matter for itself. I am happy to take any questions arising from the committee's report.

Deputy Mairéad Farrell

I apologise, but my speakers stopped working for almost the entirety of the Minister's reply. I am going to have to listen back to it. I apologise. It is unfortunate that I missed what the Minister said at the start of his reply but I gather from what he said at the end that he is happy to take questions with regard to the report. As he knows, 14 recommendations were included in the report, including the establishment of a formal process of interim and permanent appointments to senior posts and for that process to be followed in all instances. It also recommends the establishment of a body to review the remuneration of senior posts in the Civil Service and public service, and to develop a process for how those appointments are made. The report also stated that the ministerial power to set individuals' salaries should be reviewed, with a view to ensuring transparency and oversight. Can the Minister inform us what action he is going to take with regard to the three recommendations I have mentioned? I hope there will be action relating to those recommendations because it is important they are implemented.

Deputy Michael McGrath

I thank the Deputy. I hope she is hearing me okay. I welcome the report. I am still working my way through it because it is a lengthy report which gives a lot of food for thought. I have looked at the 14 recommendations that were provided by the committee. Those recommendations will be given serious consideration. I have had an initial discussion about the recommendations with my officials. There are some stand-out recommendations, in particular the recommendation to establish a body similar to the review body for positions with a higher remuneration in the public sector. The report suggests that body is established immediately to review the remuneration of senior posts in the Civil Service and public service and develop processes and procedures governing appointments to senior posts on interim and permanent bases. I will give consideration to that.

I will make the point that until July of next year, the pay level for senior posts will be generally governed by the financial emergency measures in the public interest, FEMPI, legislation. The final unwinding of the long tail of FEMPI will occur on 1 July 2022, in accordance with the legislation. Once we get beyond that point, the question arises as to what is the appropriate way in which pay issues can be examined at senior levels. At the moment, as the Deputy knows, and in line with the legislation in place, it is a power that falls to the Minister. We must consider that if we reconstitute a body similar to the one that was stood down in 2009, we may not always like its recommendations. It may come forward with recommendations in respect of pay levels that far exceed what the committee or I, as Minister, might be willing to entertain. We must consider that point.

As Minister, I am accountable. I have attended before the committee in respect of the matter that was the subject of the report. I am before the committee again today. It is important that we have that level of accountability. We would need to consider carefully exactly what the terms of reference and the role for such a body would be. Would that role be to make recommendations and it would then fall to the Minister to make a decision on individual pay levels? That requires careful consideration. I am giving a commitment to the committee that I will consider the report and I am happy to engage with the committee on that particular recommendation and the others, which I am happy to answer questions about.

The Deputy referred to three recommendations. To which three, in particular, was she referring?

Deputy Mairéad Farrell

The first was establishment of a formal process of appointments to interim and permanent senior posts and that the process would be followed in all instances. The second was the establishment of a body to review the remuneration of senior posts in the Civil Service and public service and to develop the process of appointments. The third was the review of the ministerial power to set individual salaries. It was those three in particular on which I focused.

Deputy Michael McGrath

We have the Top-Level Appointments Committee, TLAC. I know this committee commented on the role of TLAC in its report. I have informed the Government that I intend to review the role and composition of TLAC. If the committee has any detailed proposals or suggestions for the role of TLAC, I would be more than happy to engage. Until recently, TLAC had 13 members. A lot of work is going through the committee at the moment and there are many vacancies across senior levels in the Civil Service for which recruitment processes are under way. We must bear in mind that membership of TLAC is a part-time role. Following consultation with the Chairman, we have increased the membership from 13 to 16. I acknowledge the need for a wider review. It has, generally, served us well. I believe TLAC has been operating for almost 40 years at this stage and it has played a crucial role in supporting the appointment of senior posts, from assistant Secretary General level up over that period of time. In general, the role has been performed well but it is now timely to conduct a review. I am studying the report this committee published last week. I am also consulting my officials and will consider any proposals the committee wishes to make in that regard.

Deputy Mairéad Farrell

Is there time for me to ask one more quick question?

Chairman

The Deputy can ask the question before we move to Deputy Doherty.

Deputy Mairéad Farrell

There have been recent reports about overtime that was paid to top HSE officials. Between April and September 2020, overtime increased by approximately 760% compared with 2019. In contrast, total overtime for HSE staff increased by only 14% over that period. Is the Minister concerned about that?

Deputy Michael McGrath

I thank the Deputy. Management of the payroll bill is an issue for the Accounting Officer in charge of the HSE Vote.

It is not something that I have day-to-day involvement in. The Estimates we are discussing today relate to the Public Appointments Service, PAS, and do not involve direct payments to employees outside of its own body. Of course, the issue of pensions relates to the Vote on superannuation and retired allowances. I am happy to come back to the committee or to help it obtain any information it needs, but I do not have a detailed briefing on the breakdown of overtime payments to employees across the HSE.

Deputy Pearse Doherty

Cuirim fáilte roimh an Aire chuig an choiste leis an Estimate seo a phlé. I wish to begin by asking the Minister about the Estimates in terms of the pensions and lump sums. He may be aware that it is now no longer permitted for his Department to publish details of the pensions that former Ministers are receiving. Does he believe that this is something that needs to be rectified in the legislation? I am conscious that he also oversees the freedom of information legislation. Surely, when money is paid out of the public purse to people in positions such as those which the Minister now occupies himself, the public has a right to know about the pension provision? Perhaps the Minister can explain to us what has changed, because this information was previously always readily available.

Deputy Michael McGrath

I am aware of the issue. My understanding is that the change arises from a ruling by the Information Commissioner following a freedom of information process that ultimately made its way to his desk for a decision. It is a decision that was made by him and one that we have to comply with and be consistent with. I should make the point that we are doing a review of the freedom of information Acts. We have commenced an initial scoping exercise, on which there has been very strong engagement. We have received around 300 submissions already. It will be a comprehensive review that will run well into next year and will ultimately shape proposals that I will bring to Government and hopefully, to the committee. I know that members of the committee and other Opposition parties are interested in bringing forward proposals in this area. That particular issue will be examined as part of the review. However, my understanding is that currently, we have a ruling from the Information Commissioner and we are essentially bound by it. If we are to revert to publishing information at the level of the individual, it raises the question of where to draw the line. Do we publish the pension information of retired senior civil servants and retired members of An Garda Síochána or the health service, or is it just politicians that we are interested in? That is a question that we need to answer if we are seeking to address the issue in legislation.

Deputy Pearse Doherty

I am conscious of the Information Commissioner's ruling. The approach was always that information in relation to the Garda, nurses or teachers was not published. However, I think there is an additional responsibility on those of us who are in public life and are in the privileged position of being elected to office. I am not sure if the Minister shares that view. I would be eager to hear the Minister's personal opinions on that. Does he believe that that information that was made public in the past should be made public in the future, through this review?

Deputy Michael McGrath

I have an open mind on it. It is not something that I have given a great deal of thought to because we have that ruling from the Information Commissioner. It is not a decision point for me at this moment in time. It is an issue that we should consider in the context of the legislation. In his comments, the Deputy drew a distinction between elected officials and unelected officials. We have to consider whether that is an appropriate line to draw in terms of a distinction between people who were formerly elected. For example, we have to consider if we would include former judges in that. I take it that the Deputy would say "No" to that, but "Yes" to including politicians in that. We have to consider whether or not it is appropriate to have a system that is solely applicable to politicians rather than to other persons who served at senior levels across the Civil Service and public service. That does require some thought. We want a situation where we continue to attract people into politics and to apply for senior roles in the civil and public service. It requires some thought, but I am happy to give it thought and to engage on it as part of the review of the freedom of information legislation.

Deputy Pearse Doherty

On Vote 17 on the PAS, additional resources obviously are going into the area. In relation to the appointment of medical professionals, there is a serious issue in respect of the recruitment of medical professionals, including for consultant and other posts. Has the Minister engaged with the PAS on the process, the length of time it takes and the delays? I have engaged with local hospital managers and senior management staff within the hospitals and my colleague, Deputy Cullinane, has visited most of the hospitals across the State in the past two weeks. From my engagement and the information relayed to me by Deputy Cullinane, I have learned that the current recruitment process is not fit for purpose, particularly for regional and rural hospitals. For example, when recruiting a consultant for a post in Letterkenny, the PAS could offer the position to a person who is located in Dublin and has no intention of relocating to Letterkenny. The PAS has to go through the process of sending the offer, it being considered and rejected, then must look at the list of candidates again and offer the post to another candidate, and so on. The PAS might get to the fourth candidate on the list, who is somebody from the region who has an interest in the region. It is not just about that person moving to the region and taking up a position; it is also possibly about a partner, a husband or wife, who would need to relocate his or her job, and so on.

There are no regional panels here. If there were regional panels in relation to the suitability for appointments, it could fast-track the process, instead of the PAS going through a process that is not fit for purpose and offering positions to professionals who have no intention of taking them up in the first place. I ask the Minister to comment on that and on the need for a localised campaign. The centralisation of recruitment in the health service is important in terms of costs and quality. Indeed, in the review that has been done on the PAS, concerns have been raised and recommendations made in terms of ensuring that it recruits the proper staff. However, we can see the benefits where hospitals have been able to engage in their own localised recruitment process. I think we can all accept that there is an emergency in terms of staffing of our hospitals, not least now with Covid-19. Surely, this needs to be looked at in a way that is about more than just giving resources to PAS, but actually looking at how we are recruiting, why there are no localised panels and allowing our hospitals, within certain parameters, to organise localised recruitment initiatives. My understanding from the regions is that the ones that are bearing most fruits are those introduced to recruit nurses, in particular, as well as other professionals at higher levels.

Deputy Michael McGrath

Undoubtedly, it has been a challenge to recruit the number of staff that we have provided the budget for. Having said that, a lot of progress has been made. Last year, over 6,300 additional staff were recruited, which included over 1,700 nurses and midwives. This year, so far, just under 4,500 additional staff have been recruited. Therefore, between last year and this year, approximately 11,000 have been recruited. In such a relatively short period of time, it is the most significant level of recruitment that the HSE has ever embarked upon. The figures look challenging but from the information that the HSE is conveying to us, I understand that it expects that the figure of 4,500, which is quite possibly the position to the end of September, will rise to close to 7,400 by the end of the year. There will be a budget to continue with that recruitment next year. The key point the Deputy made is about the system and the pace at which recruitment is taking place.

All I can say to the Deputy is that this is an issue we have discussed at the Cabinet committee on health. We have provided the funding and we want to see the staff recruited to improve the quality of the healthcare we are providing to our people. It is a combination of the work of the PAS and the HSE’s internal HR system and the operation of that. We have asked that information would be brought back to the Cabinet committee on health and I would be happy to share whatever information I get once we receive it. The Deputy has made a particular suggestion about localised panels to increase the prospect of somebody being offered a job actually taking it up, which is a fair point, and to allow as much discretion at the local hospital level as possible. We will take those two points and convey them to the HSE. I want to repeat the point that the HSE has recruited about 11,000 people between last year and this year so far, which is a significant increase in the overall staff resources it has. It will be doing more before the end of the year and into next year but there is a need to see if we can make the system more efficient. Localised panels and more local recruitment at hospital level offer some potential and we will take that on board.

Deputy Pearse Doherty

From memory the timeframe to recruit a consultant is in the region of two years. We are recruiting people and that is great and we are competing internationally as others are also trying to recruit but the timeframe is all wrong. The Minister needs to get under the bonnet of this, look at the steps that are being taken and strip away or shorten some of the time within this. We have had scenarios where hospitals have told us they have applied for maternity cover for a particular speciality at an early stage, they have since been granted the cover and they are delighted about that but the baby is born and is one-year old and the person who gave birth is back in the position. That is what is happening in our hospitals. When we ask our hospital management and staff to indicate at an early and advanced stage that they may be taking maternity leave, which they have no obligation to do, we must streamline that process. If it is taking that long then there is a serious problem.

We may be talking about the length of time it takes to recruit but if that is a speech and language therapist, that means there are dozens of children, whether they have autism or other speech impediments, who are not getting a service in cases. It means that their educational ability and attainment are curtailed because they have dropped out of a service that they needed during that period or because there is a delay in the service. It is life lasting and it has a serious impact on the development of a child. It could be a case of life or death in other specialties which cannot be carried out or in which there is a delay because the position is not filled.

The issue is the time it takes to fill a consultant post. The average time it takes to fill a consultant’s post is 513 days. I recognise that some posts are filled in a shorter period of time but some also take longer. We have evidence to suggest that positions are being offered to people who have no interest in coming to more regional hospitals. A localised pull would help to curtail some of that but there are also a number of other suggestions. Giving more money to the PAS is one thing if it needs it but the process needs to be looked at. If it is still going to take the guts of two years to employ somebody then that is a problem. It should never take that long.

I am sure the Minister will hear this if he is engaging with hospitals and they say that where they are able to do a localised recruitment campaign, they are able to attract the nurses in. Letterkenny University Hospital is a case in point. Dozens of additional nurses will be going into the hospital through a localised recruitment campaign and they will be in place in January. There is a new ward lying empty in Letterkenny University Hospital because there are no staff to work in it. That is the problem with the PAS system and the centralisation of recruitment. We have capital investment in a hospital that is not staffed, that is lying empty and that can accommodate dozens of patients yet the staff to maintain that ward are not there and will not be there until the new year. That ward is only open to hold the beds when there are 30 or 40 people in the accident and emergency department. I am sure that is not unique to Letterkenny University Hospital but is replicated elsewhere.

Deputy Michael McGrath

I take the point that the system can be and needs to be improved. We should also acknowledge that in many instances the PAS is finding it difficult to get the candidates. The average figure that the Deputy quotes of over 500 days is not solely down to the system. I acknowledge that there is a need to streamline and improve the system and that is an area of work that the HSE is focused on because I know it has been discussed at the highest level at the Cabinet committee. There is also an international challenge in attracting candidates into different disciplines within healthcare. It is not always the case that there are willing candidates but the system is not quick enough or able to assimilate them. To put the figures in context, at the end of September we had about 130,600 whole-time equivalents in the health service and sanction is in place to increase that to over 141,000. This is a dramatic scale-up in recruitment across the HSE because we recognise that we have to improve the permanent capacity of the healthcare system. We have hired about 11,000 new staff across last year and this year and there is more to go. We will continue to put the resources into this and we will focus on the system to see if there is a way in which we can improve it, while also acknowledging that there is a general problem in attracting candidates to certain posts across the system.

Deputy Pearse Doherty

The other way to help to attract people to positions, whether it is nurses or other healthcare professionals, is to send a clear signal that they are valued. In that context, where is the bonus for front-line workers? It has been five months since the Taoiseach made an address in New York to say that the Government would bring forward a bonus for front-line workers. It is two months since he said that it would be finalised shortly. The Minister has said to the Committee on Budgetary Oversight that this needs to be dealt with well before the end of the year and next week we will be into December. These nurses are in the middle of a fight against Covid in their hospitals again and they are understaffed and looking at Christmas and wondering what leave, if any, they will get. They are going through another year with no bonus and the Government has not announced a bonus. How long does it take for the Minister and his colleagues to figure out that our front-line workers should be recognised with a bonus? The Government has had five months since the Taoiseach publicly made that commitment. How long more will it take? This rests on the Minister’s desk and it is him who is ultimately responsible for this. Can the Minister inform the committee when a decision will be arrived at on a bonus? Has a decision been arrived at or has the Government just dropped the issue? What will the bonus be? What will it cost? Front-line workers in our hospitals are fighting the pandemic every day and we ask them to turn up and put themselves in the bearna baol for the rest of the community. Surely to God the Government should have made this decision well in advance of coming into this Christmas period.

Deputy Michael McGrath

I assure the Deputy that we value and recognise the extraordinary role of out front-line healthcare workers. We are continuing to work on this issue because we need to get it right. If we do not get it right it could result in unnecessary divisions being opened up and we should seek to avoid that. There are a number of elements to it, as the Deputy knows, and many of them have been publicly discussed on a number of occasions. We need to find an appropriate way to remember and commemorate the fact that well over 5,000 people have lost their lives to Covid-19 so far. As the Deputy knows, the issue of a public holiday has been under consideration and there is the question of the timing of that. It would have an impact on employers and we need to make sure that adequate notice is given as well.

The Deputy also asked about who should get a recognition payment, how much it should be and when it should be paid.

We are considering these issues and it is being actively worked on, not just by me but by a number of colleagues across Government. We are really conscious that at this very point in time, those front-line workers are once again working in incredibly difficult positions. Our focus is to help them, and to provide as many resources as we possibly can and do all we can as a Government to stem the tide of this pandemic and get on top of the situation again. There will be an appropriate moment soon when we can confirm how we are going to address all the issues I touched on.

I assure the Deputy and all the front-line workers in our healthcare system that this has not been forgotten about. It is very much a live issue. Government has been focused on the immediate response that is needed with regard to booster campaigns and adding capacity as best we can across the system. This issue will be dealt with shortly, however.

Deputy Pearse Doherty

With respect, the Minister used the words "shortly" and "soon". The Taoiseach used the same words two months ago. The Minister said this will be decided well before the end of the year. There are three weeks of sittings left in the Dáil. When is this going to be decided on? Can the Minister outline the work that he is doing? He has asked all the questions that others are asking but he is the Minister. What does he need to do to get to a point when he can announce the bonus for front-line workers? Will this be announced in the next week, or two or three weeks, or is "soon" still a number of months away?

Deputy Michael McGrath

No, it is not a number of months away. What I will not do is give half an answer. We will give the full answer when we are ready and when we have all this fully worked through. It is being actively worked on right across Government and a number of Departments are directly contributing to this work. It does not sit within any single Department. As the Deputy indicated, I have said publicly that it should be dealt with well before the year end. Today is 24 November. We have a number of weeks to go. This is actively being worked on. It will be done shortly and it is a priority for Government. I am not going to give bits of an answer to different elements of it. When we confirm the position, it will be the complete and final position. It remains a work in progress, therefore, and we are almost there.

Chairman

I thank the Minister and Deputy Doherty. Before we go into the formal acceptance of the Estimates and so on, I wish to draw the Minister's attention to report No. 42 from 2007 of the review body on higher remuneration in the public service and non-payment to health service senior managers, serving and retired. That report was provided to Government but there has been little or no action on it. The individuals concerned, many of whom are retired now, have written numerous times to senior officials and, indeed, some Ministers, to get some sort of action with regard to the implementation of the recommendation. That was in 2007. It has continued since then. There was a Labour Court ruling on it in 2011. All these individuals are still campaigning on the solution that was found through the Labour Court process, which was recommended by the review body on higher remuneration. When are these individual likely to get paid, given that the Minister is bringing forward Estimates now that will bring us to the end of 2021? They do not seem to be included in this either.

Deputy Michael McGrath

I thank the Chairman. He will have to forgive me for not being familiar with report No. 42 of 2007 from the review body. I believe it relates to orthodontics. Is that correct?

Chairman

No, it relates to managers within the HSE or health service or whatever it was at that time in 2007. It affects payment to health service senior managers, serving and retired. The recommendation was made and, as I said, it went through the Labour Court hearing. It was upheld and both sides seem to have accepted it.

Since then, what I find very disturbing about the whole thing is that senior officials do not even bother to respond and Ministers over that period did not bother to respond. Surely, former employees of the State should be at least extended the courtesy of a reply to explain why an accepted report is not being acted on and why they are not being paid. I met them again recently and it stuck in their craw, as they say down the country, that one Secretary General's pay was increased by €80,000 on a nod yet those who served in the service were denied it; not to that extent of an increase but they were denied what was recommended.

I understand why the Minister would not have this information with him and I did not advise him either that this matter was going to be raised. Therefore, I accept what he is saying. I ask in the context of fair play and good manners, however, that the Department should at least reach out to them. I ask if the Minister to please undertake that.

Deputy Michael McGrath

I am happy to undertake to follow up and investigate this and make sure there is, at a minimum, communication with the people concerned. If there was a Labour Court hearing, it is the practice of the State, where the State is a party to a Labour Court hearing and a recommendation is made, to honour and implement that recommendation. I will, therefore, take that away. We have noted report No. 42 of 2007. I will investigate that and come back to the Chairman directly.

Chairman

I thank the Minister very much. Did Deputy Durkan wish to come in?

Deputy Bernard J. Durkan

I have two questions for the Minister. With regard to the overall performance on the Estimates and given the challenges of Covid-19 and many other issues, has the Minister identified any challenges to the public spending targets so far this year insofar as he can see into the future? The European Commission and others have commented on inflation and the possible impact on budgets, for instance. Does the Minister see that as a particular problem? Is it manageable?

Deputy Michael McGrath

I thank Deputy Durkan very much for his question regarding the public finance position within the current year. As the Deputy knows, on budget day we published our updated budgetary forecasts and also our updated macroeconomic forecasts for the next number of years. It is fair to say that we have witnessed a strong rebound in the Irish economy in recent months. That has resulted in very strong revenues across a number of different tax heads, in particular VAT and income tax and, of course, corporation tax receipts continue to be particularly strong. In addition, we have had some underspends in the system but it remains to be seen precisely what the year-end position will be in that regard.

In overall terms, the expenditure that we forecast on budget day for 2021 was of the order if €89.25 billion. We anticipate that we will come in below that figure; not by an enormous amount but by perhaps €3 million to €4 million. It depends how Departments complete their programmes between now and the end of the year, particularly on the capital side. The forecast deficit for this year is significantly reduced from budget day, however. I believe we estimated it would be of the order of €13 billion versus the figure of approximately €20 billion that was estimated earlier in the year. Similarly, for next year, there is a significant improvement in the forecast position. We are, therefore, working on the basis that the recovery of the economy will continue. If one looks at the forecasts in terms of growth, both modified domestic demand and GNI*, we are forecasting steady and sustained growth over the next number of years, which will result next year, for example, that we will only be borrowing for the public capital investment programme and not even for all of it. Some of it will be resourced by Revenue for collecting.

We estimate that we will be back to having a balanced budget position by 2024. Certainly, we are in a better position than we thought we would be several months ago, but we also acknowledge that there is a high degree of uncertainty. We are all witnessing that, including with the continuing challenge being posed by Covid-19 and the impact that inevitably has on the Irish economy. We remain optimistic regarding inflation. It is posing many challenges, not least for the people we represent and for businesses. Costs and household bills are increasing for the public, and that is a real challenge. The overall forecast is that inflation will peak this quarter and then begin to moderate. As the committee will be aware, we forecast on budget day that the average inflation rate across next year will be just over 2%, at 2.2%. The European Central Bank, ECB, believes that the underlying inflation position remains stable, and that it will moderate. It is confident that the rate of inflation will stay within what the committee members will know is the bank's overall objective of containing inflation to no more than 2% in future.

Overall, then, there are many challenges. From representatives of businesses, I am hearing about staff shortages, increasing costs, global supply challenges and rising energy bills. Those are the main issues that will present challenges for us in the short term. We are, however, seeing a strong recovery. Therefore, we are optimistic, but we must also acknowledge that there is a high degree of uncertainty. In addition, we also have the issue of Brexit to deal with. The threat we have heard in that regard from the UK Government concerning the triggering of Article 16 is another potential downside risk for the Irish economy, depending on how that plays out in the weeks and months ahead.