Dáil Éireann Debate, Tuesday - 18 April 2023
463. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if 2022 saw a decline in real terms in investment in public services due to high inflations levels; and if he will make a statement on the matter. [17123/23]
View answerThe National Development Plan 2021 – 2030 (NDP) published in October 2021 provides a detailed and positive vision for Ireland over the next 10 years, and delivers total public investment of €165 billion over the period 2021-2030. The NDP also set out the range of actions that are being taken to strengthen delivery, maximise value for money, and ensure to the greatest extent possible that projects are delivered on time, on budget and with the benefits targeted at the outset. In 2023, over €12 billion will be made available from the Exchequer for investment in public capital projects, which will provide more schools, homes, hospitals and other pieces of vital infrastructure.
Gross current expenditure by Departments was €77.8 billion in 2022, representing a year-on-year increase of over €0.2 billion or 0.3% above the same period in 2021, while gross capital expenditure by Departments was €10.9 billion, inclusive of an estimated capital carryover spend of just under €0.8 billion into 2022. This represented a year-on-year increase in capital investment of almost €1 billion or 9.9%.
In the interest of safeguarding public projects that are already under construction and to mitigate the risks of significant losses being sustained by contractors, in May 2022 the then Minister for Public Expenditure and Reform announced details of the “Inflation Co-operation Framework" (the 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 the most recent onset of exceptional inflation and supply chain disruption and operates on an ex gratia basis. Reports from Departments suggest that agreements have been reached on a wide range of projects and, where formal agreement has not yet been reached, parties continue to engage with works progressing.
Costs relating to implementation of the Framework are to be met from within existing capital expenditure ceilings. The levels of capital spending set out in the NDP, at close to 5% of GNI*, are already among the highest in the EU and are close to the limit of the overall capability to deliver in the coming decade. The ceilings detailed in the NDP have to be cognisant of the overall capability of the construction sector to deliver on the NDP and of the appropriate share of National Income being devoted to infrastructure. Similar to any process of Vote management, it will be up to sectors and Accounting Officers to assess whether existing timelines for the implementation of key projects will need to be adjusted on account of the Framework implementation or if there will be a need for prioritisation within their existing five year departmental ceilings.
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.
