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Capital Expenditure Programme

Dáil Éireann Debate, Thursday - 16 June 2022

Thursday, 16 June 2022

Ceisteanna (96)

Willie O'Dea


96. Deputy Willie O'Dea asked the Minister for Public Expenditure and Reform if capital expenditure to date in 2022 is within profile; and if he will make a statement on the matter. [30528/22]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte) (Ceist ar Public)

I wish to query where we are at currently with capital expenditure profiles given that we are nearly halfway through the year. I know the Minister is doing a lot of work to reform capital expenditure systems to make sure money is spent quicker and without the kind of delays we have been seeing. When can we expect to see changes?

As the Deputy will be aware, the drawdown of capital expenditure from the Exchequer is detailed each month and is publicly available in the Fiscal Monitor, which is published on the gov.ie website. All line Departments and agencies submit information on their expenditure levels against profile to my Department, along with an explanation outlining details regarding any variance of underspending or overspending against profile.

The latest capital expenditure figures available to the end of May reveal that the net capital spend, including capital carryover, was €2.7 billion. When the carryover amount is omitted, the net capital spend amounts to just under €2.2 billion, which is €453 million or 17.1% behind the profiled amount of €2.648 billion, with all but two Departments declaring underspends against profile.

Expenditure on capital infrastructure and programmes for the first five months is some €310 million or 16.4% ahead of the same period last year. Capital expenditure by its nature tends to be lumpy, with a particularly high drawdown at year end. It is therefore not unusual for Departments to record an underspend or overspend against profile throughout the year.

The Government has committed to investing €165 billion in capital programmes and projects across a range of investment sectors, as set out in the national development plan published last October. In the current year, almost €12 billion is available to spend on vital infrastructure in areas such as housing, transport, education, enterprise, sport and climate action, and our annual capital investment as a percentage of national income is among the largest in the European Union. We will continue to monitor and report on capital expenditure developments as the year progresses.

Of the €12 billion projected spend, we had only completed €2.2 billion by the end of May. Is the Minister confident we will reach that €12 billion target? I understand and get the pattern of capital expenditure. Of all the Departments, only two are over profile. Is there any Department in particular the Minister or his officials are concerned about that is substantially behind profile? What steps are taken to intervene or work with a Department that, for whatever reason, is behind profile? Given we are halfway through the year, will there be a particularly focused review at this time to identify any particular outliers?

It is fair to point out we had significant underspends in 2020 and 2021, which were largely attributable to Covid and the shutdown in the construction sector that took place for a number of months in each of those years. However, that same reason does not apply in the current year. Every line Department is making the case to my Department that it will spend its capital budget. Having provided resources, we want to see them spent and we want to see the projects delivered across the implementation of the national development plan.

It is too early to come to a firm view on this. We are keeping it under review and there is always the opportunity, where there is an underspend in one Department and where projects are ready to go in other Departments, to transfer that additional funding. That requires a Supplementary Estimate and a process has to be gone through but it is one we have done in the past. I am very much open to it because I want to see the capital budget drawn down and spent and I want to see projects delivered. We need a competitive element between Departments. If some Departments are better at getting things done, they should be rewarded by means of their budgets.

It is coming towards the end of the session. We have four more sitting weeks. Does the Minister foresee any Supplementary Estimates around capital expenditure that may enable some projects to start? For instance, the Department of Education is doing some excellent work on its capital side at present. I commend the Minister, Deputy Foley, on that. However, there is a reluctance in that Department to commit expenditure to some projects ahead of 2023 that are necessary, for instance, e-hubs. I am sure there are many other examples. Are any supplementary capital Estimates planned before this current Dáil session ends?

At this time, we are not planning to transfer funding for capital budgets from one Department to another this side of the recess. We will keep it under constant review. The Deputy identified the Department of Education, which is a Department that is busy with the implementation of a school building programme. Like other Departments, it has experienced inflation in respect of public works contracts and delivering on the infrastructure it has. We expect Departments to stay within budget and to manage their budgets effectively over the course of the year. While there are underspends across a range of Departments at this time, it is certainly the case those Departments are providing reassurance to my officials that they will catch up and spend their budgets over the course of this year, but we will keep it under close review.

Question No. 97 answered with Question No. 94