Willie O'Dea
Ceist:108. Deputy Willie O'Dea asked the Minister for Public Expenditure and Reform if capital expenditure is within profile for the year to date; and if he will make a statement on the matter. [56447/22]
Amharc ar fhreagraTuesday, 15 November 2022
Ceisteanna (108)
Freagraí scríofa
As the Deputy is aware, my Department is responsible for the allocation of public funds across each area of Government spending and to ensure that expenditure is managed by Departments in line with these allocations. The responsibility for the management and delivery of investment projects, within the allocations agreed under the National Development Plan 2021 – 2030 (NDP), rests with the individual sponsoring Department in each case.
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 under or over spending against profile.
The Fiscal Monitor for October 2022, published on 2 November, recorded gross capital expenditure of almost €5.5 billion to end-October, which is €1.3 billion or 24.5% behind profiled spend of €6.8 billion. The expenditure figure of €5.5 billion does not include capital carryover from 2021 spent in 2022. The amount of capital carryover spent to end-October amounted to almost €750 million, giving an overall capital spend of just over €6.2 billion for this period. In year-on-year terms, gross capital expenditure is over €400 million higher, excluding capital carryover.
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 under or over spend against profile throughout the year. There can be any number of reasons for projects to diverge from the profiles submitted at the beginning of the year, such as delays in planning, delays caused by the rising level of costs, supply chain disruptions, fuel costs and skilled labour shortages. These factors may contribute to completion delays and therefore create a variance between the profiled drawdown of expenditure and the submission of invoices by contractors.
As such, capital carryover is in place to assist Departments with the management of their capital spend across years to alleviate pressures and delays caused by timing issues and the impact of unexpected occurrences. This procedure is also designed to promote value-for-money in the use of capital funding, in particular by mitigating any incentive on the part of public bodies or Departments to spend any remaining capital allocation at end-year in an accelerated manner rather than surrender it to the Exchequer.
We will continue to monitor and report on capital expenditure developments as the year progresses.