I propose to take Questions Nos. 174 to 177, inclusive, 179 and 181 together.
Managing expenditure within allocations is a key responsibility of every Department and Minister. A number of measures are in place to ensure that our expenditure and budgetary targets are being achieved on an ongoing basis. There is regular reporting to Government on expenditure levels and expenditure profiles are published for each month. The drawdown of funds from the Exchequer is monitored throughout the year and reported on against profile on a monthly basis in the Fiscal Monitor.
As set out in the most recent Fiscal Monitor, total gross voted expenditure at end-August 2019 was €42,015 million. This is €262 million, or 0.6% below profile. Gross voted current expenditure of €38,653 million, is €132 million, or 0.3% below profile. Of the 17 Ministerial Vote groups, 14 are on or below profile on current expenditure for end-August. Gross voted capital expenditure of €3,362 million, is €130 million, or 3.7% below profile and up €683 million, or 25.5% on the same period last year. The end-September Fiscal monitor will be published later this week.
Due to the scale of Government expenditure, over €66 billion in aggregate for 2019, and the cash basis of Government accounting, the need for Supplementary Estimates can arise for a number of reasons. This includes in-year policy decisions, timing issues, overspends in particular areas and the need to respond to emerging events where Departments do not have scope to deliver offsetting savings.
Looking at policy decisions that would require a Supplementary Estimate, this would include the decision in relation to this year’s Social Welfare Christmas Bonus. Turning to areas where there are potential pressures that would give rise to overspends, as outlined in the Mid-Year Expenditure Report, there are particular challenges in the area of Health taking into account the year-on-year increase and the expenditure profile for the last quarter of the year, and also in Justice arising from pressures in relation to Asylum Seekers Accommodation.
In addition, the continued uncertainty in relation to the timing of the UK’s exit from the European Union has required that the impacted Departments and Offices incur expenditure to ensure that we are in a position to respond to the emerging position. To the extent that offsetting underspends are not available this would necessitate certain Supplementary Estimates.
At this stage in the year, it is too early to definitively state what the requirement for Supplementary Estimates will be at year-end. The White Paper to be published this Friday will set out the aggregate forecast expenditure outturn for the year taking into account an assessment of potential Supplementary Estimate requirements. Expenditure Report 2020, which will be published on Budget Day, will set out an initial assessment on a Vote Group basis of any necessary additional expenditure for 2019.
Turning to the question of particularly sensitive areas that may require additional resources in the coming year, in light of the current position in relation to the UK's exit from the EU, Budget 2020 will be based on the assumption of a no-deal Brexit. Underlying this decision is the need to ensure the Government has the necessary resources at its disposal to meet the impact of the Brexit challenge, whilst preserving the longer-term sustainability of the public finances. This strategy involves a ‘twin-track’ approach of providing funding for key public services and also supporting the sectors and regions most exposed to Brexit related disruption.
Maintaining sustainable expenditure policy is an important element of meeting our EU obligations in relation to the Stability and Growth Pact and fiscal policy more generally. This includes ensuring that we are achieving the greatest possible impact with public expenditure and delivering high quality public services in an efficient and effective manner. A range of reforms have been put in place over the last number of years with the aim of focusing attention on achieving value for money. For example, the Performance Budgeting initiative seeks to shift focus away from simply looking at the quantum of spend towards examining what is being delivered through public expenditure.
My Department has also just come to the end of year three of this phase of the Spending Review process. The Spending Review aims to place evidence at the centre of policy development, through the examination of existing policies and programmes to assess their efficiency and effectiveness. This systematic examination of existing expenditure can support the re-allocation of funding to meet expenditure priorities. A number of papers resulting from the review process were published over the summer, with the remainder due to be published alongside the Expenditure Report on Budget Day.
Over the last number of years, maintaining sustainable expenditure policy has also been crucial in restoring our economy following the economic crisis. Following a period of consolidation, the last number of years have seen moderate, sustainable expenditure growth on an annual basis. The Government has prioritised spending that mitigates risk, enhances the resilience of the economy and raises our growth capacity whilst making incremental and sustainable improvements in public services. The steady growth in expenditure in recent years reflects the significant effort made by this Government to moderate the level of expenditure increases and to secure a sustainable long-term path to growth.