Dáil Éireann Debate, Tuesday - 18 April 2023
448. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if he will outline the causes of the underspend in cumulative net capital expenditure of €1.6 billion or 19.4% behind profile of €8.3 billion; if he can provide updated figures on both cumulative net capital expenditure and profile; and if he will make a statement on the matter. [17108/23]
View answerAs the Deputy is aware, my Department is responsible for the allocation of public funds across each area of Government spending and seeks to ensure that expenditure is managed by Departments in line with these allocations. The responsibility for the management and delivery of investment projects, within the allocations agreed under the National Development Plan 2021 – 2030 (NDP), rests with the individual sponsoring Department in each case.
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 figures being queried by the Deputy would appear to relate to the end-November 2022 capital expenditure position. The Fiscal Monitor for March 2023 recorded net cumulative capital expenditure to end-March of €1,177 million, which was €336 million behind the profiled figure of €1,513 million.
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 - this can be clearly demonstrated when the end-November 2022 figures queried by the Deputy are compared against the end-year figures. The Fiscal Monitor for December 2022 recorded net capital expenditure of just under €10.9 billion, which was €572 million behind the full 2022 net capital expenditure allocation of €11.4 billion, including supplementary estimates.
There can be any number of reasons for projects to diverge from the profiles submitted at the beginning of the year, such as delays in planning, delays caused by the rising level of costs, supply chain disruptions, fuel costs and skilled labour shortages. These factors may contribute to completion delays and therefore create a variance between the profiled drawdown of expenditure and the submission of invoices by contractors.
As such, capital carryover is in place to assist Departments with the management of their capital spend across years to alleviate pressures and delays caused by timing issues and the impact of unexpected occurrences. This procedure is also designed to promote value-for-money in the use of capital funding, in particular by mitigating any incentive on the part of public bodies or Departments to spend any remaining capital allocation at end-year in an accelerated manner rather than surrender it to the Exchequer.
The Government has committed to investing €165 billion in capital programmes and projects across a range of investment sectors, as set out in the NDP 2021-30 published in October 2021. Over €12 billion is available to spend on vital infrastructure this year, including capital carryover from 2022. This will ensure investment continues to be made in areas such as housing, transport, education, enterprise, sport and climate action.
My Department will continue to monitor and report on capital expenditure developments as the year progresses.
