Budget 2022 made provision for up to €7.5 billion in funding to continue our response to the Covid-19 pandemic and for the Brexit Adjustment Reserve. Following the Revised Estimates in December 2021, €3.9 billion of this funding remained unallocated. This contingency is held in reserve centrally to allow Government flexibility to respond to emerging needs during the year.
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 €400 million. This required a Supplementary Estimate for the Department of Environment, Climate and Communications, given the scale of this amount in relation to the original Estimate for Vote 29. This Supplementary Estimate 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 draw down from the contingency funding allocated in Departmental Estimates in the first six months of 2022, 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 June expenditure reported in the Fiscal Monitor with gross current expenditure in the Department of Social Protection €292 million ahead of profile and €284 million ahead of profile in the Department of Health.
2. Additional allocations may be required to fund the other cost of living measures announced in throughout the first six months of 2022.
3. Costs related to the humanitarian response to the war in Ukraine will also need to be provided. Ultimate costs will depend on the numbers of refugees arriving, the length of stay, labour market participation over time and the accommodation solutions provided. There is considerable uncertainty in relation to these elements and it is too early to say how much will be required from the contingency at this point. To date approximately €186 million has been spent across a number of Departments.
4. An additional Supplementary Estimate of €110 million was presented to the Dáil at the beginning of July for the Department of Environment, Climate and Communications to make funds available to address security of energy supply for winter 2023/24 as set out in the EirGrid, Electricity and Turf (Amendment) Bill 2022.
Further allocations from the contingency will be considered later in the year taking account of any offsetting underspends.
Regarding the Brexit Adjustment Reserve (BAR), Budget 2022 announced around €500 million of the overall BAR allocation will be made available as a first tranche of funding, with the remainder (c.€0.6 billion) available in 2023.
Areas for funding identified under the BAR include: enterprise supports; measures to support fisheries and coastal communities; targeted supports for the agri-food sector; reskilling and retraining; and checks and controls at ports and airports.
To allow Departments to proceed with programmes to be funded under the BAR, some €54 million was allocated as initial funding in the Revised Estimates for Public Services 2022. The details of this initial funding are set out in the table below.
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Department
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-
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€
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DFHERIS
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Skillnet Digital Skills Programme and Erasmus after Brexit initiatives
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€14.5 million
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OPW
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Infrastructure for checks and controls at Rosslare Europort
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€1.8 million
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DAFM
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Initial funding for fisheries and horticulture measures
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€33 million
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DETE
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A variety of schemes, including customs readiness, to support business impacted by Brexit
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€5 million
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Further allocations will be made as the impacts of Brexit are worked through, including by means of supplementary estimates as required. Work continues across Government Departments to examine other measures that can be taken under the BAR.
