Dáil Éireann Debate, Tuesday - 21 July 2020
18. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the guidelines he has issued to Departments in the context of complying with expenditure guidelines and meeting the various targets this year and for the next five years; and if he will make a statement on the matter. [16860/20]
View answer19. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the degree to which he remains satisfied that public expenditure targets can be met by the end of the year inclusive of revisions; and if he will make a statement on the matter. [16859/20]
View answerI seek to ascertain the extent and nature of the guidelines issued by the Minister to various public bodies throughout the country. This relates to procurement and so on. Incidentally, I congratulate the new Minister and Ministers of State. This is the first occasion I have had to put questions to them directly.
I propose to take Questions Nos. 18 and 19 together.
I thank Deputy Durkan. I apologise on behalf of the Minister, Deputy Michael McGrath, who has had to leave for a Cabinet sub-committee meeting. He asked me to take these questions on his behalf.
Managing expenditure within allocations is the responsibility of every Department and its Minister. Significant additional expenditure has been allocated to a number of Departments over the past number of months. While we find ourselves in an unprecedented situation due to Covid-19, all of the usual measures remain in place in terms of the sanctioning and management of expenditure.
The Revised Estimates Volume, REV, for 2020, which was published in December 2019, set out an overall allocation of €70.4 billion in gross voted expenditure for the year. Taking into account the additional expenditure agreed by the Dáil for Covid-19 measures, the revised Government expenditure ceiling now stands at €79.7 billion. This includes an additional €6.8 billion for the Department of Employment Affairs and Social Protection, nearly €2 billion for the Department of Health and €483 million for the Department of Business, Enterprise and Innovation. In addition, further measures have been announced by the Government in response to the Covid-19 crisis, including the decision to extend the pandemic unemployment payment and the temporary wage subsidy scheme to August. At this stage, it is estimated that, based on decisions to the end of June, the overall increase relative to the allocations set out in REV 2020 arising from Covid-19 is almost €12 billion. In addition, supports are to be announced as part of the July stimulus plan and further spending may be required to support key sectors as the year progresses.
A number of reconfigurations of Departments are in progress. When work on all transfers of functions and related allocations is complete, restated Estimates will be presented to the Dáil reflecting the new departmental structures and their allocations. These Estimates will reflect decisions on additional funding to respond to Covid-19, including that set out in the July stimulus. Over the coming months, it will be important that Departments manage within the allocations set out in these Estimates.
In conjunction with budget 2021, a national economic plan will be published setting out the Government's long-term approach to restoring employment and outlining how we will secure our public finances. As the economy returns to growth and employment is restored, it is important that the deficit be reduced year on year to underpin the sustainability of the finances. To achieve this aim, a sustainable medium-term expenditure framework will be pursued that provides a clear pathway back to a balanced budget. Throughout this process, the Government will prioritise policy actions that protect the most vulnerable and put in place new measures for economic decision making that reflect the welfare and quality of life of those living in Ireland.
I thank the Minister of State for his reply. To what degree does he foresee the Government's ability to monitor the various Departments' demands in the first instance as well as the possible shortfall in available resources in view of the fact that changes in the economy, market and so on may take place in the meantime? Is it possible to identify accurately the kinds of need each Department will have?
It is not possible at the moment to do what Deputy Durkan asks for a variety of reasons that will be outlined by the Minister for Public Expenditure and Reform, Deputy Michael McGrath, as part of the July stimulus initiative. The Department of Finance data for this quarter and forecasts for the remainder of the year and spending will be as accurate as is possible. While we have seen a significant reduction in regard to those claiming one or other of the supports put in place for the pandemic, which is very welcome, our economy continues to be in a very vulnerable situation. The Minister, Deputy McGrath, and the wider Government will have to take this into consideration as they approach the preparations for the budget, discussions around which will begin as soon as the Dáil resumes following the recess.
On the specific elements of the Deputy's question, we will probably be able to get a better picture of the emerging situation once the new Departments have been configured and are able to present their own policy initiatives to the Dáil, together with their legislative platform. Together with the figures produced by the Department of Finance and the Central Statistics Office in particular as to how our economy is likely to progress between now and the end of the year, the data the Deputy is requesting will become clearer at that stage.
I thank the Minister of State. Does he foresee a situation whereby the Government will be able to identify accurately possible overruns in respect of Government contracts at an early date with a view to putting in place measures to correct such overruns if necessary and how does he foresee this interacting with contracts?
There is a twofold element in that regard. The public spending code is one of the mechanisms the Government will have at its disposal in relation to the amount of moneys being spent. The ongoing monitoring within the Department of Public Expenditure and Reform of the individual Votes from this House to each of the Departments gives it an indication as to outturn not only annually but across the year as well. On the Deputy's question of Government being able to foresee anything of the nature of the pandemic it is hoped we are in the process of coming through, the response is "No".
On the capital element of the Deputy's question, in response to an earlier question on public contracts, particularly our built contracts, the Minister, Deputy McGrath, made the point that in the context of the roll-out of the national development plan and identification of the major projects under that plan, each Department and State agency is being required by the Department of Public Expenditure and Reform, on foot of reviews carried out by it, to ensure that outturn is proportionate to budget. As the Deputy rightly stated, there have been a number of incidents in the not-too-distant past that were not satisfactory, to put it mildly. Managing outturn is a challenge and the Government is taking it very seriously.
