Dáil Éireann Debate, Tuesday - 22 January 2013
301. Deputy Pearse Doherty asked the Minister for Public Expenditure and Reform further to Parliamentary Question No. 113 of 10 October 2012, if it remains his position that employment and job creation will not be a consideration in the profiling of the capital expenditure budget in 2013. [2779/13]
View answerThe capital allocations for 2013 have been decided by the Government as part of its Budgetary decisions. Following a Government-wide review of the public capital programme, a five year multi-annual envelope for 2012 to 2016 was set in November 2011; this was slightly adjusted in Budget 2013 to address pressures relating to contractual commitments, drawdown of EU funding, replacement of Garda vehicles and to allow for the progression of a new children's detention facility at Oberstown. In deciding on the capital allocations, the Government gave strong consideration to the employment impact of the investment and on the economic and social infrastructure needs.
There will, of course, be direct employment benefits in the delivery of the infrastructure proposed in the Investment Framework and most importantly from the contribution that this capital investment makes to providing the capacity for the economy to grow. In this context, supports to the enterprise sector through agencies such as Enterprise Ireland and the IDA were protected in the review of the Public Capital Programme. The unprecedented level of investment over the past few years delivered through the Enterprise Development Agencies helps to foster sustainable and valuable employment in the exporting sectors of the economy which will be critical to recovery. My Department had a central role in conducting the Capital Review and in developing the multi-annual investment framework.
The Government decides on annual allocations taking account of the overall budgetary position, strategic investment needs and the benefits that will flow from investment, including employment. Each spending Department then considers the expected cash requirements for each of its projects and constructs its profile of how much cash it will need to draw down each month from its allocation for the year. These monthly profiles are published for each Department.
As the Deputy will be aware, capital spending has general characteristics which influence the drawdown pattern. Expenditure on capital projects typically occurs in large tranches at fixed milestones, unlike current expenditure which is generally continuous throughout the year. Obviously, this affects the phasing and profiling of capital expenditure. In addition, public financial rules require that payments are only made on foot of matured liabilities, so payments are made on foot of work that has already been satisfactorily completed. The trend is therefore that the bulk of capital expenditure takes place in the final quarter of the year. For these reasons it is not appropriate for employment and job creation to be factored into the administrative exercise of profiling monthly cash drawdown requirements from annual capital allocations, although these factors are, of course, critical in formulating Government decisions on the capital budgetary allocations in the first place.
