Dáil Éireann Debate, Wednesday - 23 January 2013
11. Deputy Charlie McConalogue asked the Minister for Public Expenditure and Reform the discussions he has had with Troika officials in respect of ensuring that departmental spending overruns are minimised; and if he will make a statement on the matter. [2816/13]
Amharc ar fhreagraFor each of the nine quarters since the EU/IMF Programme of Financial Support commenced in late 2010, the Government has successfully met all of the targets. In the expenditure area, discussions with Troika officials have been proceeding satisfactorily with a focus upon the continued attainment of spending targets and the steps necessary to address particular areas of pressure. It may be helpful to present a summary overview of the type of issues and considerations that are relevant in this overall area at present.
The end-year underlying Departmental expenditure position, adjusting for PRSI receipts, has been kept on target, with only a 0.4% deviation from target. The majority of Departments were broadly on profile by end-December. There were net overspends in the areas of Social Protection and Health. The Social Protection overspend was mainly due to lower than expected PRSI receipts in 2012 and increased expenditure on unemployment related schemes. These pressures arise from a weaker than anticipated economic environment which has been factored into the latest forecasts underpinning Budget 2013.
As regards health, the key factors contributing to the 2012 expenditure overrun include: hospital activity levels in excess of service plan targets, lower than projected income from private health insurance companies, and medical card and drug scheme expenditures increased at a higher rate than previously anticipated. The Department of Public Expenditure & Reform will continue to work with the Department of Health in ensuring that health spending is managed within the agreed ceiling for 2013.
This Government's approach to addressing the management of expenditure over the medium-term has been clearly set out in the Comprehensive Expenditure Report 2012-2014 (CER) published by the Minister for Public Expenditure & Reform on 5 December 2011. The CER introduced fixed multi-annual expenditure ceilings for all Departments in line with commitments made under the Troika programme of support. The intention of this reform measure is to improve the focus on medium-term, structural and strategic planning of expenditure within each area and to prevent spending overruns where possible. Under this measure, multi-annual current expenditure ceilings are fixed for each Department in order to make clear, in advance, the resources available for each area and the level of savings required.
The ceilings were set out on an administrative basis in 2012 and the Expenditure Report 2013 published by the Minister on 5 December 2012 accounted for minor technical adjustments to these ceilings due to a number of social and economic developments over the past year. The ceilings will be put on a statutory footing in the coming months. This will ensure that the reform becomes a permanent structural feature of Ireland’s budgetary framework.
