Expenditure ceilings provide Departments with greater clarity regarding available resources. They also help underpin significant engagement on expenditure priorities throughout the year rebalancing the previous focus on one single budgetary event in October of each year.
The Estimates process and the determination of expenditure ceilings now take place as part of a whole-of-year budgetary cycle. The Summer Economic Statement sets out the broad fiscal position and the National Economic Dialogue facilitates engagement between the Government and stakeholders. The pre-Estimates departmental expenditure position is provided in the Mid-Year Expenditure Report, MYER. This sets the baseline for examination of budgetary priorities by the Government and the Oireachtas. Following detailed consideration, ministerial expenditure ceilings are published in the budget day expenditure report and are informed by a medium-term perspective on known expenditure pressures and developments. For example, the three-year ceilings for 2017-19 are informed by a number of pre-commitments as follows: demographics in the social protection, education and health sectors. IGEES staff in my Department conduct regular analysis of such trends to better inform the expenditure ceilings in the expenditure report. This analysis is available on the IGEES website. Just over €0.4 billion has been provided for these purposes in 2018; the Lansdowne Road agreement - some €0.32 billion is included for the LRA in 2018; scheduled increases in the public capital plan - €0.26 billion is included for capital in 2018; and the ceilings also include an amount of unallocated resources in 2018 and 2019, based on the fiscal projections at budget time last year. These can be utilised to meet the carryover impact of budget 2017 measures or for new expenditure measures. The flexibility provided within the ceilings allows Government to direct available additional resources towards key services at a time of increased demand and to new priorities.
The management of the annual Exchequer funding provision allocated to Departments is governed by the rules detailed in Public Financial Procedures.
As evidenced by the moderate, prudent and sustainable increases in public expenditure over recent years, the introduction of expenditure ceilings, as part of a series of reforms introduced in the Medium-Term Expenditure Framework, MTEF, has been a major innovation in strengthening expenditure control playing a major role in restoring the stability of the public finances.
The pre-Estimates departmental expenditure position is provided in the mid-year expenditure report. It sets out the baseline for the examination of budgetary priorities by the Government and the Oireachtas. Following detailed consideration, these ceilings are published in the budget day expenditure report and then informed by a medium-term perspective on known pressures and developments. For example, the three-year ceilings from 2017 to 2019 are informed by a number of pre-commitments. One such commitment relates to demographics in social protection, education and health. Staff in my Department conduct a regular analysis of these trends to better inform expenditure ceilings. This is all available on our departmental website. For example, in 2018, €400 million has been provided for these purposes. Some €320 million is provided for the Landsdowne Road agreement in 2018. Regarding scheduled increases in the public capital plan, €260 million is included for capital ependiture in 2018.
The ceilings also provide an amount of unallocated resources in 2018 and 2019, based on the fiscal projections at budget time last year. I am satisfied as to their robustness. The fact that overall gross expenditure in the first three months of the year was slightly behind profile, even though it was up significantly, by 5% or 5.5%, versus that in the previous year is evidence of this robustness.
The issue of penalties does not arise because all Departments have to deliver their expenditure ceilings or below them. My Department and I track this on a monthly basis.
Additional information not given on the floor of the House
These ceilings can be utilised to meet the carryover impact of budget 2017 measures or new expenditure measures. The flexibility provided within the ceilings allows the Government to direct available additional resources towards key services at a time of increased demand and towards new priorities.
The management of the annual Exchequer funding provision allocated to Departments is governed by the rules detailed in public financial procedures. As evidenced by the moderate, prudent and sustainable increases in public expenditure in recent years, the introduction of expenditure ceilings as part of a series of reforms introduced in the medium-term expenditure framework has been a major innovation in strengthening expenditure control playing a major role in restoring the stability of the public finances.
