The gross allocation provided to the Defence Sector in Budget 2020 is €1,039.5 million, comprising of €780.4 million for Defence (Vote 36) and €259.1 million for Army Pensions (Vote 35). This significant level of funding emphasises the importance attached by this Government to ensuring that the Defence Forces are fully resourced to deliver on all the roles assigned to them by Government, both at home and overseas.
The Defence allocation of €780.4 million has increased by €22.3 million on the 2019 provision and provides mainly for Defence Forces pay and allowances, standing and operational costs and capital expenditure in 2020. The allocation for pay and allowances includes provision for the target strength of 9,500 Permanent Defence Force (PDF) personnel and includes all outstanding Public Service Stability Agreement 2018-2020 commitments. It also includes provision for increases in Permanent Defence Forces allowances arising from the Public Service Pay Commission’s (PSPC) report on recruitment and retention issues in the PDF and implementation of the initial measures set out in the Government’s associated implementation plan.
The 2020 capital allocation will rise by €7 million to €113 million. This level of capital funding will allow the Defence Organisation to continue a programme of sustained equipment replacement and infrastructural development across the Army, Air Corps and Naval Service, as identified and prioritised in the Defence White Paper.
The allocation for Vote 35 (Army Pensions) is €259.1 million, an increase of €10 million over 2019. This will ensure that sufficient funding is available within the Army Pensions Vote to meet the retirement benefits of some 12,640 ex-members of the Defence Forces and certain dependants.
The European Defence Fund (EDF) is a financial mechanism designed to enable and accelerate cooperation among Member States to better coordinate, supplement and amplify national investments in defence. Through the co-funded EDF, Member States will be able to achieve greater output and develop defence technology and equipment that may not be feasible on their own, by pooling national resources. The Fund will also foster innovation and allow economies of scale, which will enhance the competitiveness of the EU defence industry. The Fund has two strands or windows, which are complementary - the Research Window and the Capability Window.
From 2018 to 2020, the Commission has allocated €590 million to the European Defence Fund from the EU budget, €90 million to the Research Window and €500 million to the Capability Window under European Defence Industrial Development Programme (EDIDP). Post 2020, it is proposed that the new EU Defence Fund will be financed from the EU budget. The level of funding proposed is €13 billion but this will depend on the outcome of negotiations on the Multiannual Financial Framework 2021-2027 which are currently underway.
It is important to note that Ireland’s contributions towards the EDF and EDIDP are directly through the EU budget and therefore do not impact on the Defence Vote.
PESCO is an EU programme where projects may be funded from EDIDP and the EDF. Additional costs may arise in respect of participation in specific PESCO projects, similar to the case where the Defence Forces participate in EDA Projects. The projects where Ireland has confirmed our participation relate to the ongoing development of Defence Forces capabilities for peace support and crisis management operations. Costs associated with participation on these projects should they arise in the future would be incurred in the normal course and will therefore be met from within the Defence Vote.