I propose to take Questions Nos. 512 and 514 together.
The 2021 Summer Economic Statement set out a different approach to previous years to providing for Existing Levels of Service (ELS) costs within the budgetary parameters each year.
Whereas previously an amount was set aside for demographics in certain departments, the cost of pay deals and the carryover of prior year Budget measures, under the approach adopted in advance of the last Budget a provision of 3% of the core current expenditure base is being made for ELS costs.
This 3% is an overall provision and the breakdown of this is not predetermined in advance of the estimates process each year. The funding requirements by each of the categories covered by the ELS provision and by each Ministerial Vote group will be decided annually as part of the budget process.
A range of factors will be considered when determining the breakdown ELS costs allocated as part of Budget 2023. This includes looking at actual demand in the current year compared to that underpinning the budgetary allocation, the potential impacts of new and existing initiatives on demand and utilisation patterns, impact of demographics on demand, specific price pressures, as well as any capacity constraints that may exist.
The associated costs of the carryover impact of current expenditure measures announced in Budget 2022 will be provided from within the overall 3% ELS provision with the actual carryover cost dependent on how the rollout of Budget 2022 measures has progressed and other factors outlined above. In terms of the demographics requirement, the pre-Budget discussions on cost estimates will be informed by the ongoing work carried out in my Department and others on demographic costs. This includes the paper published by the Irish Government Economic and Evaluation Service, ‘Budgetary Impact of Changing Demographics 2020 – 2030’ as well as ongoing sectoral analysis.
