Written Answers Nos. 101-120
101. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the amount of the €7 billion in contingencies for spending set out in Budget 2022 which remains unallocated; and if he will make a statement on the matter. [29750/22]
View answerBudget 2022 made provision for up to €7 billion in funding to continue our response to the Covid-19 pandemic, including spending under the National Recovery and Resilience Plan. Just under €3 billion of this was allocated to Departments at the time of the Budget, with a further €96 million in the Revised Estimates for Public Services (REV) 2022, leaving a balance of some €3.9 billion in Contingency Funding.
In February 2022, the Government announced a suite of measures to assist with costs of living pressures. This included the Electricity Credit to domestic account holders, which had an estimated cost of c. €0.4 billion. This required a Supplementary Estimate for the Department of Environment, Climate and Communications, which was brought before the Dáil in March to provide an additional allocation of €271 million with the remaining cost funded through reallocation of existing Vote 29 resources. Following this development, the remaining contingency balance stood at just under €3.7 billion.
While this is the only additional draw down from the contingency funding allocated in Departmental Estimates this year to date, there are significant pressures and commitments on the remaining funding including:
1. Further Covid support measures, including the response to the Omicron wave will require additional funding over that foreseen at the time of Budget 2022. This includes income and employment support schemes in the Department of Social Protection, Department of Health Covid-19 response, the targeted Commercial Rates Waiver for Q1 2022 and Department of Education Covid response measures. These Covid-19 expenditure pressures are evident in the end May expenditure reported in the Fiscal Monitor with gross current expenditure in the Department of Social Protection €315 million ahead of profile and €291 million ahead of profile in the Department of Health.
2. In addition, there will be further Covid-19 related spending requirements during 2022, in particular depending on developments in the trajectory of the virus over the winter period.
3. Additional allocations may be required to fund the other cost of living measures announced in February and April.
4. Costs related to the humanitarian response to the war in Ukraine will also need to be provided and will be significant.
Further allocations from the contingency will be considered later in the year taking account of any offsetting underspends.
104. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the amount that he has sanctioned in expenditure measures to ease cost of living pressures since and including Budget 2022; and if he will make a statement on the matter. [29749/22]
View answerBudget 2022 included a number of measures to support citizens with increased costs of living. These measures amounted to over €1 billion and covered a wide range of areas, including income supports, supports for healthcare, energy, housing, families with children and education.
The economic context has become more challenging in recent months with the conflict in Ukraine compounding supply chain issues. The Government is acutely aware of the pressures facing households, in particular relating to energy bills and especially for those on lower incomes.
In recognition of these prices pressures, a further set of measures was announced in February at a cost of over half a billion euro. This was targeted at providing timely, temporary support to mitigate the impact of increasing cost of living, including:
- An Energy Credit payment automatically applied to the electricity bill of all domestic account holders to assist with rising energy costs.
- In addition to the €5 per week increase in Fuel Allowance payments introduced in Budget 2022, a further two lump sum payments totalling €225, paid in March and in mid-May, will benefit over 370,000 households.
- Budget 2022 announced an increase of €10 in the weekly income threshold for the Working Family Payment. The implementation of this increase was brought forward from April to June.
- A further reduction from €100 to €80 in the monthly payment threshold for the Drugs Payment Scheme. This will reduce medicines and drugs costs for over 70,000 recipients.
- A temporary 20% reduction in Public Service Obligation Public Transport fares until the end of 2022 to reduce the financial burden on commuters returning to the workplace.
- The maximum annual School Transport charge was reduced to €150 per family at primary level and €500 per family at post-primary level for the next academic year.
- A temporary and targeted emergency grant scheme for licensed hauliers provides a payment of €100 per week for licenced heavy goods vehicle for a period of eight weeks.
To provide further support towards mitigating fuel cost increases, the Department of Finance have introduced temporary reductions in the excise duties charged on petrol, diesel and marked gas oil and have reduced the rate of VAT on the supply of gas and electricity.
While the Government cannot absorb the full spectrum of the inflationary shock, we have taken action to provide substantial assistance towards mitigating the impact of rising prices. We have sought to implement measures which strike a balance between delivering targeted support, capable of timely implementation and are temporary in nature to ensure that our public finances remain on sustainable trajectory and avoid actions that could result in further inflation.
I am currently engaged in preparations for the Summer Economic Statement with my colleague the Minister for Finance. This publication will set out the fiscal parameters for Budget 2023 taking account of the challenging economic context. In determining this strategy, I will aim to strike a balance between delivering continued investment in public services, continuing the support for cost-of-living challenges and achieving our fiscal targets.
105. Deputy Bríd Smith asked the Minister for Public Expenditure and Reform if public sector pay talks will form part of a wider process similar to previous social partnership agreements; and if he will make a statement on the matter. [31247/22]
View answerPublic service pay has been governed by a system of collective agreements since the Croke Park Agreement was negotiated in 2010. These collective agreements have helped to ensure that public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices.
The value of public pay deals to the Government and the taxpayer is ensuring that pay costs are managed in a sustainable and orderly way and in a climate of industrial peace.
The current public service agreement is Building Momentum - A New Public Service Agreement 2021-2022. This Agreement is weighted towards those at lower incomes with headline increases of approximately 5% for the lowest paid public servants. These groups will also benefit more from other measures in the Agreement including the overtime rates and premia payment adjustments.Building Momentum is a two year Agreement, which is due to expire at the end of 2022. As Deputies will be aware, exploratory discussions have taken place between the parties to the Agreement following the triggering of the review clause in Building Momentum by public service unions and associations due to the increasing cost in living. These discussions have now moved to formal phase of discussions which are being facilitated by the Workplace Relations Commissions. As Deputies will appreciate, while these discussions are ongoing it would not be appropriate for me to comment on the detail of those talks which should remain confidential to the parties. However, the inflation and cost of living issues are a feature of those discussions.These are very challenging discussions given the impact high levels of inflation are having on living standards of workers but also because of the uncertainty in the global economic outlook. The aim in these talks will be to strike the right balance and seek to achieve a deal that is fair and affordable to both taxpayers generally and public service employees.An agreement on public service pay could play an important role in underpinning stability, minimising industrial unrest and supporting the continued delivery of reform and quality public services over the period ahead. However, any such agreement would need to reflect the broader economic context and the current fiscal position where significant challenges are emerging.
These discussions will be cognisant of the wider measures already progressed by Government to mitigate the impact of inflation and of the process being undertaken by members of Labour Employer Economic Forum (LEEF) to explore the potential for developing an agreed approach to managing and responding to economic pressures and inflationary challenges in a strategic and sustainable way.
As the Deputy is aware, the Labour Employer Economic Forum (LEEF) was established to bring together representatives of employers and trade unions with Government Ministers to exchange views on economic and employment issues as they affect the Labour Market and which are of mutual concern. The LEEF meets on a quarterly basis, with the most recent plenary meeting having taken place on 13 April 2022.
106. Deputy Willie O'Dea asked the Minister for Public Expenditure and Reform his views on the assessment by the Irish Fiscal Advisory Council that the current unexpected inflation highlights some issues with the design of spending rules; and if he will make a statement on the matter. [30529/22]
View answerThe Fiscal Council in their recent Fiscal Assessment Report, have considered the economic and budgetary projections and in this report have provided a view on spending rules in an inflationary environment. I, along with my colleague the Minister for Finance, will consider this report. The Minister for Finance will provide a formal reply in the coming weeks. Regarding spending rules, our domestic rule is encompassed in the Government's budgetary strategy.
The 2021 Summer Economic Statement set out the Government's medium term budgetary strategy. This strategy aimed to return fiscal policy to a sustainable path while continuing to invest in our public services. It set out a commitment to align core expenditure growth to the trend growth rate of the economy. This seeks to ensure that increases in core expenditure are sustainable both now and into the future.
The medium term expenditure strategy is based on the dual objective of returning fiscal policy to a sustainable path—following the considerable investment since 2020 in Covid supports—and providing continued investment in public services and public infrastructure. In this way, the strategy recognised that sustainability of expenditure relies on a combination of both a sustainable expenditure growth rate and delivery of sustainable public services. Overall the strategy must be responsive to key macroeconomic developments.
Over the coming weeks, I will be engaging with my colleague the Minister for Finance to prepare the Summer Economic Statement. This will set out the budgetary parameters for Budget 2023 taking account of an increasingly challenging and complex economic context.
107. Deputy Michael Moynihan asked the Minister for Public Expenditure and Reform the way he is facilitating remote working in the public sector; and if he will make a statement on the matter. [29639/22]
View answerIn the case of the Civil Service, remote working will be facilitated into the future on a blended basis. In this context, my Department, in collaboration with Civil Service employers, Trade Unions and Staff Associations, has developed a Blended Working Policy Framework for Civil Service Organisations.
The Framework focuses on the longer-term approach to remote working in the Civil Service and will assist in providing a consistent approach across the wider public service. The Framework supports commitments contained in a number of strategies which this Government has launched. These include, the National Remote Working Strategy, Our Rural Future, the Climate Action Plan and the National Planning Framework.
I, along with Minister of State Smyth, published the Framework on 31 March. The Framework provides broad strategic direction to individual organisations in the Civil Service to develop tailored policies on blended working that are appropriate to their business needs and employees. It is anticipated that Departments and Offices will have these policies completed no later than end-Q2 2022.
In developing their own blended working policies, Civil Service Departments and Offices will have the flexibility to determine matters such as the proportion of time individual employees work remotely versus onsite and those roles that are suitable for blended working.
Access to blended working by civil servants will be dependent on Departments/Offices having the ability to meet the needs of the business. Remote working will not be available to employees on a 100 percent basis, as some physical attendance at workplaces will be required to facilitate face-to-face meetings, training and other key events deemed necessary by the employer. Any requirements an employee may have for flexible working arrangements should be discussed directly with their employer.
108. Deputy Richard Bruton asked the Minister for Public Expenditure and Reform the sustainability measures that he applies to guide public procurement. [31242/22]
View answerGreen Public Procurement Policy is the responsibility of the Minister for Environment, Climate, Communications and Transport. In this context, my colleague, Ossian Smyth T.D., Minister of State with responsibility for Public Procurement Policy, is actively engaged in promoting sustainable public procurement and ensuring that relevant guidance is available to guide public procurement practitioners through the Office of Government Procurement (OGP).
Following the publication of the Climate Action Plan 2019, my Department published Circular 20/2019: Promoting the use of Environmental and Social Considerations in Public Procurement in October 2019. This instructs Departments to consider using green criteria in their procurements, and also requires public bodies to incorporate relevant green procurement measures into their planning and reporting cycles as an appendix within their Annual Report. In addition, the Environmental Protection Agency (EPA) collects reports from Departments annually on progress in relation to Green Public Procurement which will assist in understanding where further guidance is needed or where promotion should focus. The first report was published in April 2022 and indicated that Government departments reported a total spend of €53.765 million on contracts over €25,000, signed in 2020, that included green criteria.
The Strategic Procurement Advisory Group (SPAG), chaired by the OGP, aims to promote and facilitate the incorporation of strategic considerations into public procurement projects. In 2021, the establishment of an Environmental subgroup of the SPAG, co-chaired by the OGP and the Department of the Environment, Climate and Communication’s Circular Economy Unit, has facilitated the implementation of Green Public Procurement (GPP) measures in Ireland. It has assisted coordination and awareness in the lead up to the publication in 2021 by the EPA of Green Public Procurement – Guidance for the Public Sector, accompanied by 10 sets of green criteria. The subgroup has also facilitated the EPA in the coordination of the rollout of training in Green Public Procurement across public bodies. In addition, it makes public bodies aware of the green frameworks developed by the OGP and other central purchasing measures.
As the Deputy is aware, the Programme for Government includes a number of commitments in relation to public procurement, including evaluating and managing the environmental, economic and social impacts of procurement strategies within the State. The OGP and its partner Central Purchasing Bodies (CPBs) have been reviewing all central purchasing arrangements to identify opportunities to include green considerations. Of the 260 central arrangements that are available from the five CPBs, 165 had been updated to include specific green criteria by the end of 2021.
109. Deputy Thomas Gould asked the Minister for Public Expenditure and Reform his views on the leasing of services through service-level agreements; and if he will hold a preference for State-provision of services. [29652/22]
View answerAll Public Bodies are obliged to treat public funds with care and to ensure that the best possible value for money is obtained (including the appropriate consideration of alternative options) whenever public money is being spent or invested.
It is the responsibility of the relevant Government Department to ensure that procedures are in place to ensure compliance with all required procedures within their department/office and within the bodies under the aegis of their department. It is a matter for each Accounting Officer to decide whether processes in place in his/her department/ office/body and associated agencies are appropriate to:
- Ensure compliance with the Public Spending Code, Public Financial Procedures and the relevant circulars;
- Ensure Value for Money and appropriate consideration of alternative options.
These arrangements should take account of the requirement in Section 8.25 of the 2016 Code of Practice for the Governance of State Bodies which requires the Chairperson of each State body to confirm in its Annual Report that the organisation is adhering to the relevant aspects of the Public Spending Code.
In relation to the leasing of services through service level agreements, and the issue of preference for State-provision of services, as the Deputy will be aware, the issue of external service delivery was covered in Building Momentum - the public service agreement for 2021-22. In that agreement, the parties reaffirmed their commitment to the appropriate use of direct labour, where consistent with efficient and effective public service delivery. In addition, the provisions of recent public service agreements relating to external service delivery will continue to apply.
110. Deputy Jennifer Carroll MacNeill asked the Minister for Public Expenditure and Reform the measures that his Department has taken and which have been effective to promote equality in Ireland through equality budgeting; and if he will make a statement on the matter. [31020/22]
View answerBeginning with a pilot programme introduced for the 2018 budgetary cycle, Equality Budgeting is a way of approaching and understanding the budget as a process that embodies long-standing societal choices about how resources are used, rather than simply a neutral process of resource allocation. In practice, this means that Equality Budgeting attempts to provide greater information on how proposed or ongoing budgetary decisions impact on particular groups in society, thereby integrating equality concerns into the budgetary process.
Equality objectives and indicators are published every year in the Revised Estimates Volume and the Public Service Performance Report. The initial focus of Equality Budgeting was on gender, following which the initiative was extended to other dimensions of equality including socio-economic inequality, disability and minority groups.
An Expert Advisory Group was established to guide development of Equality Budgeting policy, and has met regularly since September 2018. The role and objectives of the Group are to provide constructive, critical feedback on the Equality Budgeting initiative and provide expert guidance and informed insights on the future direction and areas of focus for Equality Budgeting, including in light of international experience, lessons from other policy areas and from academia.
In 2019, the OECD published a report on Equality Budgeting in Ireland, providing 12 recommendations on how to drive this initiative forward. Implementation of the report's recommendations is now at an advanced stage. A key recommendation was to develop an equality data strategy, which was completed by the CSO in October 2020. To build on this, work is now underway to draft an equality data strategy. In March 2021, an inter-departmental group was established to facilitate implementation of Equality Budgeting across all Government departments. This group meets regularly and plays a key role in guiding the continued progress of Equality Budgeting. Members are accountable for ensuring that policy makers in their departments are fully aware of, and implementing, Equality Budgeting policy where applicable and bringing all relevant work within their department to the attention of the Equality Budgeting unit.
All Government Departments are now participating in Equality Budgeting. The latest Public Service Performance Report, published on 19th May this year, includes an update on this work.
111. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform the total expenditure in 2021 on the minor flood mitigation works scheme; the financial provision for this scheme in 2022; and if he will make a statement on the matter. [31325/22]
View answerLocal flooding and erosion issues are a matter, in the first instance, for each Local Authority to investigate and address. The OPW operates the Minor Flood Mitigation Works and Coastal Protection Scheme. The scheme was introduced on an administrative basis following the severe flooding in 2009 and applications for funding from local authorities are considered for flood relief and erosion protection measures costing up to €750,000 in each instance. Funding of up to 90% of the cost is available for approved projects. Applications are assessed by the OPW having regard to the specific economic, social and environmental criteria of the scheme, including a cost benefit ratio and having regard to the availability of funding for flood risk management. Full details of this scheme are available on www.gov.ie/opw.This is a demand led scheme and the OPW has never had to refuse or defer an application due to annual budgetary constraints for this scheme. Total expenditure in 2021, under the Minor Flood Mitigation Works and Coastal Protection Scheme was €1.9m. Currently the OPW has made financial provision of €3m in 2022 for this scheme.
112. Deputy Brian Leddin asked the Minister for Public Expenditure and Reform his plans for Sarsfield House in Limerick city given its embodied carbon and potential for repurposing and retrofit; and if he will make a statement on the matter. [31327/22]
View answerIn the context of the Economic and Spatial Plan for Limerick, a range of City Centre Transformational Projects were put in place to enhance and enable the urban regeneration of Limerick City. One of the key objectives for Limerick City & Co Council is to build upon the City Centre’s historic character by fully capturing the rich heritage, protecting and enhancing it where appropriate and complementing it with world class design for any new development. Central to Limerick City & County’s masterplan for the city is the development of the Opera project to bring much needed activity, employment, social facilities and life back into the city centre. Limerick City & Co Council has tasked Limerick 2030 with the development of the Opera project.
In 2014, following on from the publication of the Economic and Spatial Plan for Limerick, the Government decided in principle, to the relocation of the Revenue Commissioners from their existing offices in Sarsfield House to new offices that will form part of the major Opera, urban regeneration scheme being developed in Limerick city centre.
Sarsfield House was constructed in the early 1970’s and comprises of an approximate gross area of 7,900 square meters of office accommodation over six floors. As a building suitable for modern, 21st century working, Sarsfield House does not meet required energy efficiency standards and is, in effect, at end of life. The OPW is very mindful of the continuing requirement to provide suitable accommodation of a sustainable nature to the 800 Revenue Commissioner occupants in Sarsfield House. The condition of the building is such that it does not meet the standards expected from a modern workplace. It is the OPW’s understanding that the property will be utilised by Limerick City & County Council as part of a public amenity area that will aid the regeneration of the inner city and significantly enhance the natural environment of the city. This property footprint will become an essential part of the overall greening of the locality to allow for the development of the public realm and the transition to a more sustainable eco-friendly environment.
The Office of Public Works, and the Revenue Commissioners, continue to work with Limerick City & County Council and Limerick 2030, to give effect to the Government decision and to ensure the new Opera site will provide a modern, energy efficient office building that will meet the long-term requirements of the Revenue Commissioners and other OPW clients in Limerick city centre. Limerick City & County Council and Limerick 2030 have fully committed to ensuring that the Opera building will be constructed to the highest sustainable and environmental standards.
The Government’s Climate Action Plan requires that all public buildings meet carbon reduction targets by 2030 and accord with all prevailing EU regulatory provisions. The OPW’s existing office accommodation portfolio has a disproportionate amount of buildings dating from the early 1950’s to the early 1990’s. Those aging assets are at, or near, the end of their useful lives. The buildings to be retained in the portfolio, to meet existing and future public service workforce needs, are therefore in need of major investment to significantly reduce their carbon footprint in line with Government and EU climate action requirements.
The National Recovery and Resilience Plan recently published by the Government identifies advancing the green transition as a top priority and allocates significant funding towards decarbonising projects such as the retrofitting of public office accommodation. The OPW is deeply committed to helping advance sustainable solutions that mitigate against climate change, including through the new Public Sector Retrofit Pathfinder Project as well as through a Public Service Innovation Fund project, which will develop guidelines for the deep energy renovation of historic public sector properties. The Office of Public Works is partnered with the Sustainable Energy Authority of Ireland on the pathfinder programme.
The Office of Public Works are completing the final stages of the development of guidance on the Roadmap for the use of lower carbon materials in construction . The document outlines key areas of guidance for lower-carbon building materials in construction supported by examples of best practice in this area. The use of lower carbon building materials in construction will play an important role in reducing our emission by 51% by 2030.
113. Deputy Mick Barry asked the Minister for Public Expenditure and Reform the measures he will take to ensure that developers engaged to construct social and affordable housing will not leave contracts with local authorities due to rising costs in construction; and if he will make a statement on the matter. [22168/22]
View answerThere have been significant and sustained increases in the prices of a broad range of commonly used materials in the construction sector throughout 2021 in the aftermath of the pandemic. Energy prices also showed marked increases in 2021 and have further escalated in response to the Russian invasion of Ukraine. Both materials and energy represent significant input costs for construction projects and inflation is a risk that contractors have been expected to bear under the public works contracts for a defined period.
These inflationary provisions have operated reasonably effectively over the years since their introduction, albeit in times of relative price stability. However, the price movements experienced on construction materials over the past 12 months have arisen suddenly and with no warning. In response to this challenge, I introduced a series of measures to address the risk posed.
- The OGP issued procurement guidance in November 2021 to assist public bodies in managing the challenges they face concluding ‘live’ tenders.
- With reference to future tenders, the OGP published interim amendments to the provisions in the public works contracts on 7 January 2022. Within certain parameters, these amendments reduce the level of risk of extraordinary materials price inflation that contractors have to bear, while also enabling the Exchequer to obtain cost reductions should exceptional price reductions occur during the course of the works. The measures are designed to encourage confidence in the tender process and to mitigate against the over-provision for price inflation in tender prices. However, they do not cater for fuel/energy price increases or supply chain disruption.
While these changes had been expected to bring greater stability to contracting arrangements on projects whose tenders were received after 18 January 2022, there has been sustained feedback from Government Departments and their Agencies that successful delivery of priority projects included in the NDP is jeopardised by further inflationary pressures associated with the war in Ukraine. Departments have reported specific issues with fuel costs and supply chain disruption, including reduced competition for public works contracts and challenges relating to projects underway during 2021.
Through extensive engagement with industry and public sector stakeholders involved in the delivery of the National Development Plan 2021-2030(NDP), it is clear that the delivery of many critical public capital projects is being put at risk due to the rapid increases in material and energy prices in recent times. For contractors who tendered for projects prior to the onset of these inflationary pressures, this issue is particularly acute.
In the interest of safeguarding public projects that are already under construction and to mitigate the risks of significant losses being sustained by contractors, on Tuesday 10 May I announced details of the “Inflation Co-operation Framework" for those parties engaged under a public works contract.
The Framework facilitates both parties to engage with one another for the purpose of addressing the impacts of this most recent onset of exceptional inflation and supply chain disruption and operates on an ex gratia basis. The Framework sets down the approaches and the parameters within which parties to a public works contract may calculate additional costs attributable to material and fuel price fluctuations using price indices published by the Central Statistics Office.
In recognition that neither party is responsible for the global events that have given rise to inflation, it is proposed that the additional inflation costs be apportioned between the parties, with, subject to budgetary constraints, the State bearing up to 70% of the additional inflationary related costs. The Framework applies to payments made from 1 January 2022.
The key provisions of the Inflation Co-operation Framework are:
- It operates from the point at which the parties agree to engage until the project is completed or the parties elect to withdraw by giving notice to the other.
- Given that further inflationary pressures have been building since the beginning of 2022, it provides for the back-payment of a proportion of inflation related costs (on materials and energy) to 1 January 2022 on those contracts which pre-date the introduction of the interim amendments (contracts with a revision date earlier than 7 January 2022).
- The inflation analysis is undertaken using relevant indices published by the Central Statistics Office.
- Going forward, for the duration of the framework, additional inflation costs (for materials and energy) are to be calculated in a similar manner.
- For more recent contracts (i.e. those that commenced under the amended forms of contract), the framework permits the recovery of costs arising from fluctuations in energy prices.
- And finally, for all contracts currently in progress, where it can be shown that a supply chain disruption that has arisen since 01 January 2022 that has led to a delay in completing the project, contractors will not be held liable to pay liquidated damages for the late delivery of the project.
The use of the framework is voluntary, but participation by the parties is strongly encouraged. It represents a pragmatic and proportionate response to the current challenges caused by inflation that are not within either party’s control.
Guidance, workbook templates and forms of agreement have been published by the Office of Government Procurement and are available on the Capital Works Management Framework website: https://constructionprocurement.gov.ie/. There is a new dedicated page ‘Details of Inflation/ Supply Chain Delay Co-operation Framework ’, which can be accessed directly from the link in the top banner on the website.
The measures available under the Framework strike an important balance between the additional costs incurred by the State to support Contractors engaged on public projects and the State’s ability to deliver the NDP including housing delivery, whilst providing value for money for the taxpayer.
The OGP will be further amending the conditions of the public works contracts so that these measures are incorporated into the contractual framework on a permanent basis.
These amendments will ensure a clear apportionment of the risk associated with inflation to enable contractors to price that risk and ensure that we retain a reasonable degree of budgetary certainty without seeing a reduction in those participating in tenders and over-provision for inflation by those that submit tenders.
114. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the total underspend on capital spending to date in 2022; and if he will make a statement on the matter. [31015/22]
View answerAs the Deputy will be aware, the drawdown of capital expenditure from the Exchequer is detailed each month and is publicly available in the Fiscal Monitor, which is published on the gov.ie website. All line Departments and agencies submit information on their expenditure levels against profile to my Department, along with an explanation outlining details regarding any variance of under or over spending against profile.
The latest capital expenditure figures available to end-May reveal that the net capital spend, including capital carryover, was €2,710 million. When the carryover amount is omitted, the net capital spend amounts to €2,195 million, which is €453 million or 17.1% behind the profiled amount of €2,648 million, with all but two Departments declaring underspends against profile. Expenditure on capital infrastructure and programmes for the first five months is some €310 million or 16.4% ahead of the same period last year.
Capital expenditure by its nature tends to be lumpy, with a particularly high drawdown at year-end. It is therefore not unusual for Departments to record an under or over spend against profile throughout the year.
The Government has committed to investing €165 billion in capital programmes and projects across a range of investment sectors, as set out in the National Development Plan 2021 - 2030 published last October. In 2022, almost €12 billion is available to spend on vital infrastructure in areas such as housing, transport, education, enterprise, sport and climate action and our annual capital investment as a percentage of national income is among the largest in the EU.
We will continue to monitor and report on capital expenditure developments as the year progresses.
115. Deputy Niamh Smyth asked the Minister for Public Expenditure and Reform his approach to calls for pay increases to match rises in the cost of living; the way that he will calculate the affordability of such calls; and if he will make a statement on the matter. [29519/22]
View answer120. Deputy John Lahart asked the Minister for Public Expenditure and Reform the timeframe for the completion of a new public sector pay agreement; and if he will make a statement on the matter. [30137/22]
View answer121. Deputy John Paul Phelan asked the Minister for Public Expenditure and Reform if his Department still plans for public sector workers to receive a 1% increase in October 2022 under the Building Momentum pay agreement; and if he will make a statement on the matter. [31082/22]
View answer129. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform if the new public sector pay agreement will ensure that all public sector workers get a pay rise in line with inflation; and if he will make a statement on the matter. [31314/22]
View answerI propose to take Questions Nos. 115, 120, 121 and 129 together.
Public service pay has been governed by a system of collective agreements since the Croke Park Agreement was negotiated in 2010. These collective agreements have helped to ensure that public pay is managed in a sustainable, affordable and orderly manner. These agreements have also enabled significant reform of public services and changes to work practices.
The current public service agreement is Building Momentum - A New Public Service Agreement 2021-2022. This Agreement is weighted towards those at lower incomes with headline increases of approximately 5% for the lowest paid public servants. These groups will also benefit more from other measures in the Agreement including the overtime rates and premia payment adjustments.
Building Momentum is a two year Agreement, which is due to expire at the end of 2022.
As the Deputies will be aware, exploratory discussions have taken place between the parties to the Agreement following the triggering of the review clause in Building Momentum by public service unions and associations due to the increasing cost in living. These discussions have now moved to formal phase of discussions which are being facilitated by the Workplace Relations Commissions.
As the Deputies will appreciate, while these discussions are ongoing it would not be appropriate for me to comment on the detail of those talks which should remain confidential to the parties. However, inflation and cost of living issues to which the Deputies have referred will feature in those discussions.
These are very challenging discussions given the impact high levels of inflation are having on living standards of workers but also because of the uncertainty in the global economic outlook. The aim in these talks will be to strike the right balance and seek to achieve a deal that is fair and affordable to both taxpayers generally and public service employees.
An agreement on public service pay could play an important role in underpinning stability, minimising industrial unrest and supporting the continued delivery of reform and quality public services over the period ahead. However, any such agreement would need to reflect the broader economic context and the current fiscal position where significant challenges are emerging.
116. Deputy Marc Ó Cathasaigh asked the Minister for Public Expenditure and Reform the way that his Department intends to integrate the Wellbeing Framework into the budgetary process and the budgetary cycle; and if he will make a statement on the matter. [31305/22]
View answerIn Programme for Government – Our Shared Future, the Government set out a commitment to developing a set of well-being indices to create a well-rounded, holistic view of how Irish society is fairing. In June 2022, the Government published Understanding Life in Ireland: The Well-being Framework. This report builds on the initial report, First Report on a Well-being Framework for Ireland , that was published in July 2021 by taking account of the contributions to a public consultation and further research.
The overarching vision of the Well-being Framework for Ireland is “enabling all our people to live fulfilled lives now and into the future”. In addition to publishing details of the Well-being Framework and an associated dashboard hosted by the Central Statistics Office, the Government is also committed to ensuring that the well-being framework is utilised in a systematic way across government policy making in evaluating programmes and reporting progress as well as in setting budgetary priorities (as an important complement to existing economic measurement tools).
In order to progress the use of Well-being Framework as part of the policy process, and develop a knowledge base around well-being as a policy objective, the Department of Public Expenditure & Reform has sought to pilot an approach to utilising the Well-being Framework to locate well-being within existing public policy. The approach under consideration builds on the performance budgeting initiative by placing an explicit focus on stated policy goals and evidence of progress. In order to develop this approach, Departments have been invited to consider how they might utilise the Well-being Framework as part of the Spending Review process. As noted in the Expenditure Report 2022 , the Well-being Public Policy Unit in the Department of Public Expenditure & Reform is available to support Departments in carrying out this work.
Furthermore, as noted in the Expenditure Report 2022, and subsequently in Understanding Life in Ireland: The Well-being Framework , the next phase of the Department of Public Expenditure & Reform's work in this area is to develop an approach to associating public expenditure with the various dimensions of the Well-being Framework. The intention is to develop over time a way of setting out budgetary decisions on the basis of well-being dimensions; an approach that would complement the existing Vote Group approach to presenting such decisions.
117. Deputy Seán Haughey asked the Minister for Public Expenditure and Reform if he will report on the level of public expenditure in the first five months of 2022; the comparison to the same period in 2021; and if he will make a statement on the matter. [29644/22]
View answer134. Deputy Paul McAuliffe asked the Minister for Public Expenditure and Reform if public expenditure was within profile during the first five months of 2022; and if he will make a statement on the matter. [29747/22]
View answer141. Deputy Éamon Ó Cuív asked the Minister for Public Expenditure and Reform the underspend against profile of gross voted expenditure at the end of May 2022; the percentage involved; the steps he intends taking to rectify this; and if he will make a statement on the matter. [30332/22]
View answerI propose to take Questions Nos. 117, 134 and 141 together.
For the first five months of 2022, total gross voted expenditure was €31.8 billion. This was just slightly over the profiled spend with a variance of €114 million or 0.4%. This compares with just under €33 billion in overall gross voted expenditure at the end of May 2021, a reduction of €1.2 billion or 3.5% year on year. In net terms, total net voted expenditure to end-May 2022 amounted to €25.8 billion, which was €313 million or 1.2% below the amount profiled to be spent and €0.8 billion or 3.1% below the same period in 2021.
For current expenditure, gross voted spending was €29.6 billion at end May 2022 against €31.1 billion for the same period in 2021 – a reduction of €1.5 billion or 4.8%. Among the main changes was spending in Social Protection being €3.4 billion lower than in 2021, reflecting lower Covid-19 related spend than in 2021, while there was higher year on year current spending of just over €1 billion in the Department of Health.
Current spending was €571 million or 2.0% ahead of profile. Vote Groups with higher than profiled spend included Social Protection which was €315m or 3.3% ahead or profile, and Health which was €291 million or 3.4% above profile. Higher than expected spending in both Vote Groups was largely due to increased Covid-19 spending as a result of the Omicron wave against the amount allocated for Covid-19 schemes in their Estimates.
In relation to gross capital expenditure, end May spend of €2.2 billion was €316 million or 16.6% ahead on the same period in 2021. Capital spending in the Department of Environment, Climate and Communications was €0.4 billion or over six times higher than the same period in 2021, reflecting payment of the Electricity Credit to domestic account holders, with other year on year increases in Agriculture (€35m or 40%), Education (€44m or almost 18%) and eleven other Vote Groups.
Capital expenditure at end May was €457 million or 17.1% below profile. Capital spending was higher than profile in Agriculture and Education. However in the majority of Departments capital spending to end May was less than had been expected when profiles were prepared. Capital spending tends to be weighted toward the end of the year, and my Department will continue to closely monitor spend against profile.
118. Deputy Emer Higgins asked the Minister for Public Expenditure and Reform his views on the expenditure measures that have been effective in funding public services; the guidance that his Department has provided to enhance productivity in the construction sector; and if he will make a statement on the matter. [31030/22]
View answerMy Department is committed to delivering initiatives that enhance productivity in the construction sector. The Construction Sector Group (CSG) and the Construction Sector Subgroup are committed to delivering initiatives that enhance productivity, through seven priority actions.
In November 2021, I announced funding of €2.5 million over 5 years for the Build Digital Project (BDP). The BDP will transform the Irish construction and built environment sectors by enabling all stakeholders to develop, maintain, and continuously improve their capabilities through digital adoption to support delivery of PI2040. Overall, the project will enable parallel positive impacts for organisations across productivity, sustainability, procurement, and standards adoption.
Of the seven actions, work is ongoing on the national rollout of eplanning applications by the Local Government Management Agency. The option to submit planning applications digitally is now available in Galway and Tipperary. Other counties are currently being progressed in three waves, with the aim to finish this project by early 2023.
Other actions include the establishment of the Construction Technology Centre (CTC) which will support technological transformation in the construction sector. This will be established in early 2023. Additionally, work is also progressing on Modern Methods of Construction (MMC). The adoption of MMC will be vital in driving innovation in the wider construction sector, contributing towards the achievement of the Government’s ambitious capital investment plans.
Collaboration and continued engagement with industry representatives through the CSG is resulting in positive developments in terms of enhancing the efficiency and effectiveness of the construction sector, which will in turn enable the delivery of the Government's ambitions under the NDP.
Finally, a range of budgetary reforms have been put in place in recent years, to drive spending efficiency and effectiveness and the Programme for Government commits to continuing reform and improvement of the budgetary process. This work includes the ‘whole-of-year’ budgetary framework, the Spending Review process, Performance Budgeting and Equality Budgeting and the development of the Wellbeing Framework for Ireland.
119. Deputy Jennifer Carroll MacNeill asked the Minister for Public Expenditure and Reform the level of recent engagement that his Department has had with the Department of Justice to provide further options and recommendations on future directions for equality budgeting in Ireland; and if he will make a statement on the matter. [31021/22]
View answerEquality Budgeting is an approach to providing greater information on how proposed or ongoing budgetary decisions impact on particular groups in society. Equality Budgeting seeks to approach the budget as a process that embodies long-standing societal choices about how resources are used, rather than simply a neutral process of resource allocation.
Significant work has been undertaken to develop the initiative and Equality Budgeting has been expanded across multiple dimensions of equality including gender, socio-economic, disability and minority groups.
In 2019, the OECD was requested by my Department, and the Department of Justice and Equality, to conduct a scan of Equality Budgeting in Ireland. The published report supported the approach taken, and provided twelve recommendations on how to drive this initiative forward. Implementation of the report's recommendations is well advanced.
A key recommendation was the establishment of an inter-departmental network of Equality Budgeting contact points which was established last year. The group includes a senior member of staff from each department with a broad knowledge of the policy work undertaken by that department and its relevance to advancing Equality Budgeting.
Members are accountable for ensuring that policy makers in their departments are fully aware of, and implementing, Equality Budgeting policy and bringing all relevant work within their department to the attention of the Equality Budgeting unit, to ensure that strategic direction of Equality Budgeting is fully informed.
This group is playing a key role in guiding the continued progress of Equality Budgeting. Meeting agendas and minutes are published on the Equality Budgeting page of Gov.ie.
At the most recent meeting the Department of Justice gave an update on a skills and needs analysis carried out, regarding further implementation of Equality Budgeting.
In parallel to the Inter-Departmental group, bilateral engagement is a key driver of this policy and my Department maintains strong engagement with officials in the Department of Justice to increase capacity, drive implementation of this policy and share relevant knowledge.
