I propose to take Questions Nos. 174, 178 and 184 together.
Over the last number of years, a range of reforms has been implemented in order to enhance Ireland’s budgetary framework and ensure that expenditure is managed in an efficient and effective way. The intention of these reforms is to increase transparency around the budgetary process and to facilitate meaningful dialogue around key elements of the Budget and on what is being achieved with public funds.
Central to these reforms is the ‘whole-of-year’ budgetary framework. This refers to an ongoing consideration of budgetary priorities throughout the year, rather than focusing budget discussions only around Budget Day. An important element of this is the publication of a range of documents at key points in the year to enhance engagement on relevant budgetary issues.
Improving and supporting the evaluation capacity within Government Departments has also formed an important part of the reform programme. Supported by the establishment of the Irish Government Economic and Evaluation Service, this has led to the development of a number of additional processes and reports to support the budgetary framework. This includes:
Performance Budgeting - A key objective of the Performance Budgeting Initiative is to shift the focus away from the quantum of spend and towards outputs and impacts. The Public Service Performance Report presents performance information in an accessible manner and aims to facilitate discussion around what is being delivered with public funds and how this impacts the citizen.
Equality Budgeting – Equality budgeting involves providing greater information on the likely impacts of proposed and/or ongoing budgetary measures, which, in turn, enhances the potential to better facilitate the integration of equality concerns into the budgetary process. An OECD "Policy Scan" Report on Equality Budgeting was completed and published in 2019, setting out a number of ambitious objectives to progress this aspect of the budgetary reform agenda, with work being progressed in implementing the recommendations set out in the Report.
Spending Review - This process aims to place evidence at the heart of policy making, by systematically examining existing spending programmes with a view to assessing their efficiency and effectiveness, as well as overall quality in programme design and delivery. This approach can support the targeting and considered allocation of funding in line with policy priorities.
A key objective of these reforms is to support sustainable growth in public expenditure while delivering improvements in public services. Pre-Covid, the average annual growth rate in spending on day-to-day services over the five year period 2015 to 2020 was projected at 4%, with the emphasis over this period being on catch-up growth in capital spending and sustainable growth in current spending targeted at key frontline services. This approach delivered a positive fiscal position as we entered the crisis caused by the pandemic, with a General Government surplus of 0.5% of GDP being recorded in 2019.
Looking forward, the overall Budgetary Strategy for 2021 focuses on prioritising crisis management measures to address the challenges posed by Covid-19 and Brexit while continuing to provide for sustainable increases in day-to-day spending on core expenditure programmes and increased levels of capital investment. My Department will continue to engage with other Departments over the course of the year in respect of the management of expenditure within the agreed expenditure allocations set out in the Revised Estimates for Public Services 2021 published in December last year.
The Programme for Government commits to continuing reform and improvement of the budgetary process, including an enhanced focus across Government on issues of performance and contributing to national well-being. In implementing further reforms, my Department will look to build on the budgetary reforms already in place and the significant work on public service reform already completed. Adopting this approach will support stronger dialogue on key elements of budgetary policy and will help to facilitate the continued development of budgetary decisions, consistent with the maintenance of stable public finances.