I have a proposal for three Supplementary Estimates in respect of Votes 12, 14 and 17. The first is a net Supplementary Estimate of €79 million in respect of Vote 12, superannuation and retired allowances, the second is a Supplementary Estimate of €220,000 in respect of Vote 14, State Laboratory, and the third is a Supplementary Estimate of €479,000 in respect of Vote 17, Public Appointments Service.
On superannuation and retired allowances, the Supplementary Estimate in respect of the superannuation Vote will bring the total 2022 Estimate for that Vote to €786.6 million gross and €353.4 million net. The Supplementary Estimate arises mainly due to higher costs than forecast for the year under the pension scheme for established civil servants as a result of a higher number of retirements than anticipated for 2022. Expenditure in this regard is dependent on the number and grade mix of those who choose to retire and, because of that, is subject to variability from one year to another and is difficult to predict.
Pensions and lump sums paid under the pension schemes for established civil servants make up 91% of total gross expenditure on the superannuation and retired allowances Vote, so a key driver of the annual cost is the number of established civil servants who retire in the year. However, it is particularly difficult to estimate the number of retirements from one year to the next for the following reasons: the majority of established civil servants will have a compulsory retirement age of 70; in addition, a number of people under age 60 retire each year under cost neutral early retirement or on grounds of ill-health; each year, a number of former employees become eligible to claim a preserved pension entitlement; and the average pension benefits – lump sum and pension - that will fall to be payable to new retirees in any given year will vary depending on the grades and years of service of that specific cohort of retirees.
The 2022 gross Estimate for Vote 12 was €707.6 million, which was based on a forecast of 1,550 retirements from the established scheme. As a general rule, for each person who retires, the once-off lump sum paid out is three times the size of the annual pension. Accordingly, increases in retirement levels have a particular effect on subhead A4, which provides for the lump sum payments to established civil servants. Subhead A4 is, therefore, a key driver of expenditure variance on the Vote in any given year.
At the end of October 2022, €125.9 million had been expended from subhead A4 compared to the original 2022 full-year estimate of €93.8 million. Further expenditure of up to €37.1 million by the end of the year is estimated, resulting in an overall projected excess of approximately €53.9 million on the subhead.
At the end of October 2022, €463.5 million had been expended from subhead A1 compared to the original 2022 full-year estimate of €530.9 million. Further expenditure of up to €90.9 million by the end of the year is estimated, resulting in an overall projected excess of approximately €23.6 million on the subhead.
It is now estimated that total gross expenditure on the Vote for 2022 may be in the region of €786.6 million, some €79 million in excess of the gross Estimate of €707.6 million as voted previously by the Oireachtas. That is the Vote 12.
Vote 17 is for the Public Appointments Service, PAS. The Supplementary Estimate for the Public Appointments Service arises mainly due to the higher level of recruitment and selection costs throughout the year, as well as the impact of back-dated pay increases agreed under Building Momentum. The Supplementary Estimate in respect of the PAS Vote will bring the total gross allocation for the Vote to €20.233 million in 2022. The additional allocation of €479,000 which is sought for Vote 17 includes: €60,000 of additional current expenditure to enable PAS to deliver on commitments made by Government as part of the Building Momentum extension; and €514,000 across non-pay subheads, including recruitment costs and office premises expenses; less €95,000 due to higher appropriations-in-aid.
The additional funding provided as part of the Supplementary Estimate will allow PAS to continue to provide an increased level of service in 2022 over 2021. As of mid-November, PAS has advertised 507 campaigns and assigned 7,529 people to public service posts in 2022, in comparison to 482 campaigns and 7,708 assignments for 2021. It is expected that the final figures for 2022 will, therefore, be in excess of delivery levels in 2021 as supplementary funding will allow PAS to continue to run campaigns throughout December. Some 99% of roles were filled for clients in 2022 to date and 71% of recruitment campaigns were delivered within the agreed timescales to date.
Vote 14 covers the State Laboratory. The Supplementary Estimate for the State Laboratory arises due to higher than anticipated spend on electricity and gas resulting from the new Office of Government Procurement, OGP, contracts for these utilities. The State Laboratory has a higher electricity demand than office buildings due to the requirements of laboratory equipment, many of which are in operation 24 hours a day. The Supplementary Estimate in respect of the State Laboratory Vote will bring the total gross allocation for the Vote to €12.152 million in 2022. The additional allocation of €220,000 which is sought for Vote 17 will be spent on electricity and gas resulting from the new OGP contracts for these utilities.
The additional funding provided as part of the Supplementary Estimate will facilitate the State Laboratory to deliver critical services for clients. These clients are Departments and public bodies and services include: analysis of food and feed to meet EU legislative requirements related to food safety for the Department of Agriculture, Food and the Marine and the Food Safety Authority of Ireland; analysis of post mortem examination samples for alcohol, drugs and other substances for the Coroners Service across all counties; and analysis of fuel oil and alcohol related to excise duties for the Revenue Commissioners.
Approval of the Supplementary Estimates for Votes 12, 14 and 17 will enable PAS and the State Laboratory to deliver additional key services to the end of 2022 and will confer the necessary legal authority to meet the pension entitlements of civil servants who are expected to retire up to the end of 2022. I commend the Supplementary Estimates to the committee and I am happy to answer any questions.
