I welcome the opportunity to address the Seanad on the Appropriation Bill, 2001. As Senators are aware, the core purpose of the annual Appropriation Bill is to give statutory effect to the departmental Estimates for supply services, both current and capital, including all Supplementary Estimates which were approved by the Dáil since the last Appropriation Act.
This Bill appropriates the net sum of £20,362,692,000 to the various services listed in the Schedule for the year ending 31 December 2001. The amounts in the Bill that relate to the year 2001 are in Irish pounds. In euro the equivalent net sum is €25,855,285,000. The total amount comprises the original net Estimates of £19,692,504,000 as approved by the Dáil prior to the summer recess and net Supplementary Estimates totalling £670,188,000 which have been approved by the Dáil in recent weeks. The Bill also seeks approval for the use of departmental receipts, amounting to £1,802,444,000 as appropriations-in-aid of the services listed in the Schedule. As I have mentioned, the Estimates and Supplementary Estimates which are included in the Schedule to the Appropriation Bill have been approved by the Dáil. This Bill seeks to give formal legal effect to those Estimates and Supplementary Estimates.
The Appropriation Bill also provides an opportunity to review the budgetary and economic position. My ministerial colleague, Deputy Cullen, spoke in this House recently in the context of the changed economic environment in which the recent budget was framed. A slow down from the exceptionally high rates of growth in recent years was perhaps inevitable, given the significant reduction in unemployment and the rise in overall labour force participation. Domestic and international events have meant the rate of slow down has been much more drastic than expected. The signs of economic slow down in the United States were further worsened by the sad events of September 11. Domestically, the impact of restrictions put in place as a result of the threat of foot and mouth disease can be seen, especially in the food, tourism and transport sectors.
While the economic outlook has changed significantly in recent times, we are well placed to take advantage of the recovery when it comes. The Minister for Finance, Deputy McCreevy, said in the Budget Statement that he expects GDP growth to slow significantly next year, to 3.9%. It is worth restating that this performance outstrips that of many of our European partners and reflects the success of the Government in building the capacity of the economy to grow in a sound and sustainable manner. Employment is expected to increase by about 1.5% annually to 2004. While unemployment may average 4.75% next year, this trend should reverse as economic conditions improve. Consumer price inflation is projected to ease in 2002, helped by lower imported inflation, before falling to 2.25% by 2004.
The Government has built up a sound economic foundation during its term in office. The recent budgetary measures announced by the Minister for Finance will contribute to our prosperity and competitiveness and will promote social cohesiveness. The measures in the budget will enable continued economic progress by further developing our infrastructure and public services, by promoting social equity and by continuing to encourage enterprise and investment. The Government is committed to deliver on these objectives in a way that sustains fiscal policy.
I will briefly outline some of the detail of this Bill. Section 1 gives statutory effect to the departmental Estimates for the supply services, current and capital, including all Supplementary Estimates which were approved by the Dáil since the last Appropriation Act. The Dáil approved the original 2001 net Estimates for departmental expenditure, which totalled £19,693,000,000, prior to the summer recess. In late November and early December, the Dáil approved a number of Supplementary Estimates for various Departments, totalling about £670 million. The extra amount brings the total grant for supply services expenditure in 2001 to £20,363,000,000. Section 1(1) appropriates this amount to the various supply services or Departments as listed in the Schedule to this Bill and section 1(2) provides for the application of a total amount of £1,802,000,000 in departmental receipts as appropriations-in-aid of the grants for the supply services listed in the Schedule.
I will outline briefly the main factors which have given rise to additional expenditure and the need for Supplementary Estimates. Three Departments account for £595 million or 90% of the total Supplementary Estimates of £670 million. Net additional funds of £205 million were approved for the Department of the Environment and Local Government. Of this, £55 million was additional current spending on the local government fund. The balance of £150 million was in respect of additional infrastructural spending on road improvement and maintenance and water and sewerage services. The additional allocations were provided to fund accelerated development of the roads network. They will also allow for accelerated progress under the water services investment programmes which cater for a number of major schemes including waste water schemes in Dublin, Cork, Limerick and Galway. This extra funding brings this Department's total net 2001 estimate to £2,470,000,000, or 12% of the total spending approved by the Dáil.
The Department of Health and Children was granted an additional net £197 million. This provides for additional spending in a number of areas, including £60 million for drugs schemes and £10 million for the cost of extending the medical card to those aged over 70. Nearly £35 million relates to additional pay costs for home helps, care assistants, increases due as a result of the Buckley report, agreements on incremental credit and unsociable hours and additional PRSI and pension costs. The expenses arising from the events of September 11 amounted to almost £24 million, including costs associated with the day of mourning, iodine tablets and medication associated with the threat of anthrax. Additional spending on a number of tribunals and inquiries was £14 million and medical indemnity and public liability insurance cost nearly £13 million more than forecast. There was a shortfall in appropriations-in-aid, mainly health contributions, of £17 million and an extra £23 million was spent on other projects. The total net 2001 Estimate for the Department of Health and Children was £4,720,000,000, or 23% of total expenditure approved by the Dáil.
An additional net allocation of £193 million was granted to the Department of Education and Science. Of this, £80 million was needed to cover a shortfall in EU receipts in 2001, £42 million was granted for early payment of capitation grants to schools, £16 million was for additional pay costs in the universities and institutes of technology, £15 million was for additional secretarial, caretaking and child care assistant costs at first and second level and £6 million was for additional pension costs.
There was additional capital spending of £33 million at first and third level which included a site purchase for the development of the Dundalk Institute of Technology and earlier than expected expenditure on first level school projects arising from early project completions. This additional allocation brings the total net 2001 Estimate for the Department to £3,728 million, which represents over 18% of total spending.
The Department of Justice, Equality and Law Reform was appropriated an extra £30 million for the additional costs of prison officer and Garda overtime. The Garda overtime arose from the preventative measures taken to stave off foot and mouth disease. However, this extra allocation is offset by other savings to give an overall saving on the Justice group of Votes.
The other significant Supplementary Estimates were for the Office of Public Works and the Department of Public Enterprise. The supplementary provision for the Office of Public Works was £32 million. This amount funded net additional spending of £16 million for refurbishment work and rental costs on properties for a number of Departments, nearly £7 million for preventative measures to stop the spread of foot and mouth disease and £9 million towards an office development purchase for a proposed one-stop-shop for immigration and citizenship.
The additional allocation for the Department of Public Enterprise was £17 million which concerned, inter alia, additional funding for CIE for public service provision and compensation for Aer Lingus for the post September 11 period when US airspace was closed. Smaller Supplementary Estimates of less than £3 million were taken on the Arts, Heritage, Gaeltacht and the Islands, Foreign Affairs and Taoiseach's groups of Votes.
I will now deal with section 2 of this Bill. Article 17.1.2º of the Constitution requires that the financial resolutions of each year must be enacted into law by the end of that year or by 31 December 2001 in the case of the financial resolutions passed on budget day – 5 December 2001. However, Article 17.1.2º also allows for the end of year deadline to be deferred if an Act to that effect is passed before the end of that year, in this case, before 31 December 2001. This section makes provision for this deferment to be invoked. The provision of this section of the Appropriation Bill will maintain the normal statutory deadlines for passing budget measures into law, namely, 84 days for completion of Second Stage and four months for enactment of the Finance Bill. Identical provisions were included in the Appropriation Acts of 1998 to 2000.
In commending this Bill to this House I would like to state that the level of funding provided by this Government in 2001 built on significant investments made since 1997. Since taking office this Government has increased net voted current spending by nearly £6 billion, or 57%. These funds have been targeted at the key social priorities of health, education and social welfare. We have also provided considerable resources for capital developments. The level of capital expenditure has increased by over £2.4 billion or 164% since we took office in 1997. This is indicative of this Government delivering on its promises to improve priority public services and to invest our resources wisely on behalf of the all the people.