Dáil Éireann Debate, Thursday - 10 April 2014
6. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which specific reform proposals continue to deliver positively for the Exchequer in line with expectations and targets; if any revision or amendment is necessary; and if he will make a statement on the matter. [16728/14]
View answerThis question relates to the extent to which budgetary projections remain on target. Based on the performance of the past three years, does the Minister believe we will achieve the targets set?
The Government continues to make good progress in achieving its deficit targets and priorities. Since its peak in 2009, gross voted expenditure has been reduced by €10.1 billion, or 16%, from €63.1 billion in 2009 to just under €53 billion in 2014. Staff numbers have been reduced by more than 30,000 since the 2008 peak, even as demands on services increased.
In the context of bringing public expenditure back onto a sustainable path, meaningful reform of the public sector was essential to ensure we could maintain and improve services. In November 2011, we set out our programme of reforms in our first public service reform plan. In January this year, I published a report setting out the progress made under the first plan and published the Government's second public service reform plan, setting out our ambition for the next three years.
As well as enabling services to be maintained in the context of reduced resources and improving services, a number of reforms will continue to deliver cost savings. I will cite a number of examples. The Croke Park agreement delivered €1.8 billion in pay and non-pay savings. The Haddington Road agreement sets out a number of measures to deliver further savings of €1 billion by 2016. We have undertaken a major review of public procurement and are implementing a radical overhaul of our approach, with the new office of public procurement targeting €500 million in savings in the next three years, of which €127 million will be achieved this year.
We are also introducing shared services for a range of back office functions to increase efficiency and integration across public sector organisations. For example, PeoplePoint, the Civil Service human resources and pensions shared service centre, will deliver savings estimated at €12.5 million annually. The use of innovative models of service delivery, greater use of technology and more efficient management of the State's property portfolio will also yield savings. Some of the savings made will be reinvested in front-line services in what I describe as a reform dividend. Public service reform will continue to be an important element of the Government's strategy for economic recovery.
I thank the Minister for his comprehensive reply. Will it be possible, in preparing for the 2015 budget, to weigh up the arguments for reform versus expenditure cuts, with a view to determining which option will be more appropriate as the economic recovery unfolds?
The Deputy asked a good question, which goes to the heart of the creation of my Department. In advance of entering government, the Deputy's party and my party had both reached the conclusion that to make the economic changes required, we needed to have a proactive reform agenda. This could only be driven by a Cabinet Minister who controlled the money, and the Department of Public Expenditure and Reform was established to that end. The Government set out a radical reform agenda, which has been embraced by the public sector. As I set out in the report I made to the Oireachtas in January, we have achieved more progress on reforming the public service in the past three years than had been made in the previous 30 years.
Reform is not a process that is required by a crisis. It should be a permanent feature of government. We should constantly re-examine how we deliver services and whether we can do so in a more proactive manner. One of the most important reforms is reform of the budget. I hope that in calmer times, when we are in an expansion rather than a retrenchment phase, Oireachtas committees will examine options, line by line and in advance of budgets, make recommendations to the Government and be truly part of the budgetary process.
I congratulate the Minister on the performance of his Department, which has made extraordinary achievements, given the position we were in when the Government was formed. When the Government is considering future options, will it be possible to introduce guidelines on the long-term performance of the economy with a view to ensuring we do not revisit the circumstances we experienced a few years ago?
The Deputy is well versed in developments in the European context in the past three years. Ireland has signed up to the Stability and Growth Pact, which has become part of the constitutional architecture of the State. Eurozone countries have mutual oversight of their budgets to ensure the common currency is protected and countries such as Germany, Greece, France and Italy do not engage in profligacy that will have an impact on us and our capacity. Similarly, other eurozone countries have oversight of our budget in a new set of mechanisms known as the six-pack and two-pack. These will ensure the disastrous mistakes that led Ireland to the brink of economic collapse will not be repeated. The Oireachtas must take these developments to heart by allowing much more transparency in the way in which the budgetary process and cycle evolve. We must break the tendency of Governments to spend money in the run-up to general elections and act in a more parsimonious manner immediately thereafter. Real analysis of public expenditure is needed to put taxpayers in the picture.
