I thank the Chair and the members of the select committee for agreeing to consider this Supplementary Estimate for subhead I, Vote 28. It is a relatively rare occurrence for a Supplementary Estimate to be needed on this Vote. However, with the general tightening of allocations to my Department in recent years, it has become more and more difficult to accommodate exceptional items within the general voted moneys.
This Supplementary Estimate is sought now to enable Ireland to meet its obligations towards a number of international organisations, particularly costs emerging as a result of United Nations peacekeeping operations. UN peacekeeping costs are met through the contributions of all UN member states at defined contribution rates, based primarily on economic scale and level of development. These contributions are essential to enable the UN to undertake its peacekeeping operations and provide for reimbursement of some of the costs incurred by countries participating in UN peacekeeping missions, including Ireland when we do so. Members may be aware that a proposal for renewed Irish participation in UNIFIL is under consideration and costs arising from this mission will be recouped from the UN. The UN's capacity to reimburse troop-contributing countries depends entirely on its member states' fulfilling their financial obligations to the organisation in full and on time.
The importance of the UN's role in maintaining international peace and security does not need to be emphasised. At present, approximately 100,000 troops worldwide are serving on 15 current UN peacekeeping missions in a range of conflict-affected regions, from Darfur in Sudan to the eastern DRC, Haiti, Lebanon and Kosovo. The conduct and operation of these peacekeeping missions relies directly on UN member states' fulfilling their financial commitments. Ireland has always taken its obligations arising from UN membership seriously. Accordingly, it has been the practice of all Irish Governments to make our assessed payments to the organisation in full and on time.
Due to the nature of peacekeeping activities, UN peacekeeping costs are difficult to forecast and generally arise on a somewhat irregular basis throughout the year. Determining factors include the timing and nature of the renewal of the mandates for existing UN peacekeeping missions as well as the overall range and scale of peacekeeping operations undertaken by the UN. Member states receive a large number of individual peacekeeping assessments throughout the course of the UN peacekeeping financial year, which runs from 1 July to 30 June. These assessments reflect the costs of the missions being undertaken, to be divided between all members, and are subject to wide variations. In addition, the assessments are denominated in US dollars, which exposes my Department to an unavoidable currency risk. The combination of these three variables - scale of mission, timing of assessment and exchange rate variations, make it very difficult to estimate in advance the total contribution for a calendar year.
In the Estimates for 2010, Dáil Éireann allocated €37.2 million towards subhead I, approximately equal to the out-turn for last year. The 2009 allocation had been €42 million, yielding savings of some €5 million for 2009 which was returned to the Exchequer. In the current year, some of the variables I mentioned have worked against us. The overall number of missions has increased and some, such as the UN mission in Haiti, have expanded considerably. For much of the year the euro rate of exchange with the dollar was unfavourable. The year 2010 has also witnessed the commencement of a new scale of contributions for all members, which has had the effect of increasing the proportion of each mission to be paid by Ireland. The cumulative impact of these developments has been to increase the estimated outturn for Ireland's contribution to peacekeeping operations from €19.6 million to €34.7 million. In turn, the estimated total outturn for subhead I has increased from €37.2 million to €52.4 million. The exact total will not be known until the final payments are made, as even in the past week the euro-dollar exchange rate has shifted significantly.
I have made every effort within my Department to husband our available resources during this past year. As the scale of the increased costs of UN peacekeeping emerged, I attempted to identify savings within the Vote. I have identified €1.3 million in current expenditure that might be directed towards the shortfall. Some €300,000 comes from the administrative subheads and €1million from the funds set aside for the emigrant support programme, subhead C. In assigning this money to meet the peacekeeping operation contributions, I assure the committee that grants to front line organisations were not substantially reduced this year. Savings arose due to reduced investment in community capital projects. I regret this, but in the current climate some difficult choices had to be made. Priority will always be given to front line organisations providing services to the most vulnerable. Last year we also had some exceptional capital items on the emigrant support programme which did not recur this year and that allowed us some leeway.
In addition, I have decided not to proceed at this stage with some necessary capital investments in departmental infrastructure, which I again regret. This has freed up a further €1.5 million towards our UN obligations. In total, I have identified savings of €2.8 million in Vote 28, which with the committee's approval I will make available for subhead I. This still leaves a shortfall of more than €12 million to be found. In discussions with the Minister for Finance, I have accepted that, in the light of the extremely difficult position of the public finances, expenditure under Vote 29, which funds our ODA programme, can be capped at the level necessary to offset the amount of the Supplementary Estimate now required. In other words, we will reduce the ODA side by €12 million. While this means that the net cost to the Exchequer of the Supplementary Estimate is neutral, I regret that it means that total expenditure on ODA by my Department will be reduced. This decision has not been taken lightly, and the Government's commitment to ODA remains strong. Given the likely outturn of GNP for Ireland in 2010, I am confident that the target level of ODA at 0.52% will still be reached.
I have attempted to provide the committee with the background and reasoning behind the current request for a Supplementary Estimate. I have also outlined the measures I propose to take to offset the increased contributions. They are unfortunately not without impact. In other times, it may have been possible to source moneys elsewhere within the system to meet the unexpected developments. However, as I indicated at the outset, the nature of the budget for my Department is now so tight that there is little flexibility to respond to issues such as the one before us.
I thank the committee and am happy to answer any questions members may have.
