I thank the Chairman and members of the committee for the invitation extended to me to appear before the committee to consider the Department's Estimates for 2012.
In 2012, the Department will spend nearly €20.55 billion on a wide range of schemes, services and administration. Its primary goal is to promote the active participation of citizens in Ireland through the provision of employment services and a wide range of income supports. These services and supports have some kind of impact on the life of almost every single person in the State. The scope and scale of this expenditure play a key role in the wider economy and help to partially offset the effect of the downturn. As a result, the role of this committee is very important, and I look forward to constructive engagement with members over the next few hours on the Government's largest area of expenditure. Members will already have received a substantial brief from my Department to assist them in this regard.
Before we get into the fine detail of these expenditure figures, I would like to outline briefly the transformation process that is currently under way in the Department. Since I appeared before the committee last year, the Department of Social Protection has begun a major project which will transform the services of the Department. This involves the development of an enhanced and tailored approach to support those who are unemployed in availing of opportunities and options for returning to work. In the past year, we have completed one of the most significant transfers of functions across the public service in modern times. This has involved the transfer of over 1,700 posts and these transfers have a direct impact on my Department's administrative budget allocation for 2012.
The committee will be aware that on 1 October 2011, community welfare services staff transferred to the Department from the HSE. These staff bring with them a deep understanding of welfare issues in their communities. From 1 January 2012, FÁS community services and employment services also transferred to the Department. Both of these transfers represent a very significant step in the reform of services provided by the Department. They will enable the implementation of the National Employment and Entitlements Service action plan and more recently the Pathways to Work plan which have identified the concept of the one-stop-shop as one of the critical components of the Department's new service approach, the provision of an integrated set of services. These one-stop-shops will mean that people who avail of our services will find them in one location, where feasible. The services will be provided by a mix of staff with a breadth of skills and experience in entitlements, community welfare and employment services.
I fully recognise that these transfers are challenging for both the individuals transferring into the Department as well as the long-standing staff of the Department. Change is always challenging, not only at organisational level but also on a personal level. I wish to thank all concerned for the co-operation and input into the ongoing transformation of the Department to become an organisation with a radically new focus. This will lead to a better and more effective customer experience for the Department's clients. I cannot stress enough that bringing 1,700 new staff into the Department is probably the biggest - or one of the biggest - transfers of staff in the history of Irish public administration.
The planning for the NEES one-stop-shops is in the live trial and development phase. The Department began the first phase of the NEES trial in the office at Kings Inns Street-Parnell Street, Dublin 1, on 1 February 2011. This will be followed by the end of this month by offices in Arklow, Sligo and Tallaght, with a further ten offices coming on stream by the end of the year.
The 2012 Estimates reflect the merger of the Department with the community welfare services in 2011 and the FÁS community employment services in 2012. Whereas in 2010 the Department operated some 50 schemes, there are now 66 schemes administered by the Department. As a consequence, the Estimates show big increases in expenditure as the Department has taken into its charge very large areas of activity.
With regard to the Department's overall expenditure levels, I wish to highlight the following overall expenditure figures.Total spending on social protection is estimated to decrease by €411 million in 2012, bringing overall expenditure to more than €20.547 billion.A total of €8.9 billion, 1 % less than in 2011, will be spent on social insurance schemes and their administration, while close to €11.6 billion, 2.5% less than in 2011, will be spent on social assistance schemes and services.Expenditure on jobseeker's benefit and jobseeker's allowance is estimated at almost €3.6 billion or €344 million less than in 2011. Some statistical information on the live register has been circulated for the information of the members, along with a copy of this statement.
Overall, some 2.9% of all expenditure is accounted for by administration. This level of expenditure reflects the Government's commitment to protect the most vulnerable in our society and recognises the role of welfare expenditure in the wider economy. However, we are in a difficult economic situation reflected by the fact that we are still spending more each year than we take in through revenue. This means that the nation has very challenging targets for deficit reduction.
The programme for Government contains a commitment to open up the budget and Estimates process to wider public and parliamentary scrutiny. A further innovation being introduced into the Estimates process is the concept of performance budgeting where, alongside the usual expenditure information provided by Departments, the Estimates also includes performance information. This will specify the outputs that will be delivered with the funding to be voted under the Estimates, with these outputs linked to the high level goals set out in each Department's strategy statement. The performance budgeting approach will increase the focus on what is being delivered with public funds. The Estimates for my Department are further complicated by the fact that overall expenditure comprises expenditure under both Vote 37 and the Social Insurance Fund.
The 2012 Estimates have been reorganised on a sub-programme basis to enable a more informed examination of expenditure. An unpublished table has also been made available to the committee to enable examination of expenditure by sub-programme across the Vote and the Social Insurance Fund.
The sub-programmes are as follows: 1, administration; 2, pensions; 3, working age income supports; 4, working age employment supports; 5, illness, disability and carers; 6, children; 7, supplementary payments,agencies and miscellaneous services.
I will now provide a brief overview of each of these areas of expenditure. Administration accounts for 2.9% or nearly €600 million of expenditure. The Estimates provide for 6,744 full time-equivalent positions. The data on administration expenditure takes account of the full integration of HSE and FÁS staff into the Department and to which I referred. This is the reason for the big increase in expenditure. Expenditure on pensions will amount to nearly €6.25 billion, an increase of some €140 million on 2011 or just under 30.4% of overall expenditure. This increase reflects the demographic challenges we are already facing and which are likely to accelerate, year on year. The country has more older people coming to pension age and those people are living longer, thankfully. However, the consequence is an additional requirement for spending in this area. Expenditure on working age income supports, including jobseeker's allowance and one parent family payment, accounts for 27.8% of overall expenditure, or €5.7 billion. Expenditure on working age employment supports, including community employment, JobBridge, TÚS and various employment supports, amount to over €983 million or nearly 5% of the Department's expenditure. This represents an increase of €122 million or 14.1% over 2011 and it is a clear indication of my priorities in this area. Expenditure provision for illness, disability and carers will amount to over €3.4 billion or 16.7% of expenditure in 2012. These supports include carer's allowance and benefit, domiciliary care allowance and disability allowance, among others. In total, payments to carers amount to over €780 million. Expenditure on children and families will account for just under 11.7% of expenditure or nearly €2.4 billion, of which €2.078 billion will be expended on child benefit and €199.5 million expended on family income supplement. Expenditure supplementary payments, agencies and miscellaneous services, accounts for €1.16 million or 5.7% of expenditure. This expenditure includes free travel which will cost an estimated €77 million in 2012 and the household benefits package which will account for over €335 million. Those schemes account for great deal of the expenditure in this area.
I will now deal with sources of funding. The Exchequer makes the most significant contribution to social welfare expenditure in terms of resources as it funds all assistance-based schemes and child benefit. However, employees, employers, and the self-employed, also make a significant and valued contribution to the social welfare system through the operation of the Social Insurance Fund. This year, the income of the Social Insurance Fund will be in excess of €7.087 billion but expenditure will be almost €8.9 billion. This deficit of just €1.8 billion will be financed by the Exchequer out of general taxation resources.
An actuarial review of the social insurance fund is currently nearing completion and will be laid before the Houses next month. This will better inform consideration of the expenditure pressure facing the fund in the years ahead and, by definition, the financing implications. It will look at our population statistics, demographics and the extra costs of people living longer, more social welfare claimants and so on.
The performance budgeting section of the Estimates outlines the key outputs achieved in 2011, as well as the output targets for 2012. The context and impact indicators illustrate the scale of our activities.
We operate 66 separate schemes and 12 services and the needs and requirements of individual claimants can vary dramatically, as Deputies from all sides of the House are aware. The following figures give some indication of the scale of business. In 2011, the Department processed more than 1 million weekly paid claims and made over 87.5 million payment transactions. Over 6.8 million telephone calls were received in headquarter sections. Over 982,000 control reviews were conducted by the Department in 2011. In 2012, an average of just over 1.4 million people will receive a social welfare payment each week. When qualified adults and qualified children are included, a total of more than 2 million people will benefit from weekly payments. In addition to this, child benefit payments will reach over 600,000 families, with nearly 1.12 million children, every month.
I hope my opening statement has given Members a good overview of the Department's planned expenditure and activities in 2012. The schemes and services operated by the Department benefit everyone in society, either directly or indirectly, and are the key platform for the delivery of social protection in our country. I look forward to discussing the Estimates with the select sub-committee.