Vol. 486 No. 1
115 Mr. R. Bruton asked the Minister for Finance if the no policy change spending outlook for 1999 will affect the Government's commitments to provide new or expanded public spending programmes; and the way in which he plans to meet the Government's spending target in 1998. [1211/98]
The "no-policy-change" projections for 1999 and 2000 published with my budget are different in concept from Government plans further to improve public services. The "no-policy-change" projections are of the full year cost of maintaining the existing level of services, post-budget. They do not provide for any new or expanded public services. But neither do they rule out such improvements, provided that total net current spending does not grow faster than the 4 per cent annual average limit set in the Government's programme.
In my budget speech I said that the task of achieving the Government target of containing the growth in net current expenditure to an average annual increase of 4 per cent over its lifetime will be challenging. I said that the projected average annual increase of 3.8 per cent on a "no-policy-change" basis in the period 1998 to 2000 is within the Government target and the increase in 1999 is projected to be 4.8 per cent.
In the light of the actual 1997 outturn, the increase in net current spending in 1998 is now estimated at 2.6 per cent. The lower increase in 1998 also means that the average annual increase in the period 1998-2000 is reduced from the figure of 3.8 per cent indicated in the budget to 3.43 per cent. The 1999 figure is now 4.6 per cent.
The Government fully recognises that, with the projected average increase on a "no-policy-change" basis running close to the 4 per cent programme limit, holding to that limit while at the same time implementing new policy commitments as set out in its Programme will not be easy. It will require choices to be made in allocating resources so that the additional costs of any new or expanded services are met within the average annual limit of 4 per cent.
Decisions on the implementation of commitments in the Government's programme for the provision of new or expanded services will be taken by the Government in the light of a full assessment of the costs involved and how those costs are to be met within the overall expenditure limit. The comprehensive programme of expenditure reviews which are now being carried out as part of a three-year programme under the Strategic Management Initiative should assist in making decisions on priorities within and between spending programmes.
