Éamon Ó Cuív presses minister over €1.2bn capital underspend

The question relates to the underspend of capital across all departments. I want to include in the figure capital allocations deferred to 2023, because I think it is important, once money is provided, that it is spent. What it means, if it is not spent, is that houses are not built, transport and roads are not built, hospitals are not built, so you might give me the details of it and tell me which departments are the ones that are built. Thank you. As the deputy is aware, my department is responsible for the allocation of public funds across each area of government spending and seeking to ensure that expenditures managed by departments are in line with these allocations. Those allocations are laid out in the National Development Plan. To answer the deputy's questions, the fiscal monitor for December 2022 recorded growth capital expenditure of over €10.9 billion, which was €569 million behind the full capital expenditure allocation of almost €11.5 billion, including supplementary estimates. The answer to your question, overall, is that it is €569 million below planned spending. The expenditure figure of €10.9 billion includes a capital carryover into 2023, which was your second question, of €687 million. If we were to exclude that and include the carryover of €789 million from 2023, which was spent in 2022. The gross total spend in 2022 was just over €11 billion. I will see when you are responding back to those overall questions if I have the figures by department as well. Mr. Minister, if I understand rightly, between deferred capital at the end of the year, when you allocated the money in 2021 for 2022 and 2022 for 2023, you knew about the carryovers in each case. Mr. Minister, what you are telling me is, in fact, if I understand rightly, about €1.2 billion under-spend between carryovers and under-spend in the department. I keep thinking of all of the things urgently needed in this country that have not happened. So, I suppose my question is, from the global perspective of your department, what are you going to do to make sure this does not happen again and again and again? It seems to me crazy to be allocating money and not getting it spent. That falls into three possibilities. Allow more projects into the pipeline, because they take longer now than they used. The second one is to look at the public procurement process and the third one is to look at the public spending guidelines to see if you could get the same due diligence with less time and less steps and more parallel steps. Thank you, Deputy Minister. There are options that I am willing to look at. As you know, we do have capital carryovers that are in place every year. But I do take your point that when the need is so big for more homes to be built and for more garden stations to be built and for more investment, of course it is frustrating for deputies to see significant capital under-spends in place in government departments. I think if you look at the figures overall and you have asked me what they were, if I look at them for a number of government departments, the vast majority of them have capital spend drawdown for the year that is between 95 per cent and 100 per cent. There are a number of government departments in which that is not the case. But the reasons for this are very well known because of challenges that are there. For example, housing is at 93 per cent. You can see social protection is at 93 per cent. Those figures are the drawdown of the total capital budget. You can see that the finance group is at 90 per cent and foreign affairs is at 69 per cent. The reason for much of that is the difficulties that have happened now with delivering capital projects in a very inflationary environment. The change is on the challenges that we have had in the aftermath of Covid but I look at the options you have raised because given the level of social need we have, I want to see every cent of our capital budget has been spent in any given year. I remember when carry-overs were introduced. I had serious reservations about it because I felt it was going to become endemic in the system. Because watching the public service system, once you open a thing like that up, they think that is part of what you do. You only spend and you carry over up to 20% or whatever you are allowed to carry over. I think the older heads around here, and I see one of my colleagues smiling because the older heads around here know that is the kind of thing that happens in the system. Now, Minister, I accept the difficulties with planning and delays. My attitude towards that has always been to put more projects on the conveyor belt and put them on earlier. Anticipate that all of these things will happen and then make sure at the end, because, as you know, as Minister of Public Expenders, it is awfully easy to control capital. It is not like current. It is awfully easy to control it and make sure you get the full spend without overspending and not busting the budget. Minister, will you be looking at allowing more into the pipeline, reforming public procurement and reforming the public spending code that just seems to me to have too many linear steps rather than parallel steps in it? I cannot give you an indication that I am going to be giving agreement to more projects coming into the pipeline, because that would be an overall government decision of significance. I am not yet confident that our capital ceilings for the year will allow that to happen, but I am going to look at it. In relation to the other two issues that you have raised there, I do believe there are issues from a public procurement and a public spending code that are relating to some of the underspends that we have there. I would make the point to you, Deputy, and I know you will be aware of this given your huge experience, that in the absence of carryovers, what that meant is that government departments who were not able to spend their capital projects for very, very good reasons sometimes then lost all their funding and were not in a position to carry over and continue with projects year by year. Capital projects carryovers do play a valuable role, but I do accept your more general point that we need to look at why underspends are happening and see what we can do to minimise them. Thank you.