Health, education are winners in election year

At three minutes past 11, just four paragraphs into his Estimates speech, the Minister for Finance finally said it.

At three minutes past 11, just four paragraphs into his Estimates speech, the Minister for Finance finally said it.

"At this juncture, budgetary policy calls for caution and prudence," Mr McCreevy told the briefing. He then went on to outline his spending plans for next year.

Overall Government spending will rise by 8 per cent to more than €27 billion (£21.2 billion) and, as might be expected in an election year, the biggest beneficiaries will be health and education. The increase is made up of a 5 per cent rise in capital spending to €4.976 billion and a 9 per cent increase in current spending to €22.1 billion.

The bulk of the €1.8 billion increase in current spending will be eaten up by pay rises for the State's 260,000 employees. When these commitments have been met there will be some €700 million for other current spending on State services.

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The €242 million increase in capital spending is significantly down on last year's €933 million and will fuel debate about the Government's ability to meet its commitments under the National Development Plan. Mr McCreevy was adamant yesterday that it would, but at the same time quite vague about exactly how this would be achieved. The big winner is health spending, which will account for 24.2 per cent of total Government spending next year. The department has been allocated €6.1 billion, representing an increase of 13 per cent on last year. The destination of the additional funds will become clearer next week, when the Health Minister, Mr Martin, publishes his long-awaited Health Strategy. Many of the programmes to be announced next week are built into the Estimates, according to Mr McCreevy, who used yesterday's press conference to voice his scepticism about the logic of pouring money into the health services without any structural reforms. Much of the increase in health spending, some €170 million, will go on recruiting an additional 2,500 health workers.

Spending on education will also be increased by 13 per cent to €4.5 billion. Some €80 million is committed to hiring new teachers and other staff. There are no extra funds for new primary or secondary schools.

Social, Community & Family Affairs got an 8 per cent increase. Part of the reasoning behind the increase is the acceptance that the number out of work will rise next year as the economy slows. The average number of people signing on for the dole next year is expected to rise from 142,000 to 155,000, according to Mr McCreevy.

All the other main Government Departments got increases of 8 per cent or less. Some, such as Agriculture, Justice Equality & Law Reform and Tourism, Sport & Recreation saw their budget's shrink, mostly for technical or accounting reasons.

Public Enterprise, which is responsible for most of the high profile public transport projects, promised under the National Development Plan, will get only a 4 per cent increase in current expenditure. This includes a 170 per cent increase to €100,000 in the legal provision put aside to fight British Nuclear Fuels plans to open the MOX plant at Sellafield. The annual subvention to CI╔ will be increased by 16 per cent to €233 million, but the allocations for the Dublin Light Rail project (Luas) is unchanged at €127 million.

The Minister For Public Enterprise, Ms O'Rourke, was quick to point out that when her Department's share of the capital spending budget is taken into account, then spending on public transport will increase by 11 per cent overall.

Public Transport and roads will indeed receive the biggest chunk of capital spending, some €1.2 billion out of a total of just under €5 billion. Mr McCreevy hinted at more spending on infrastructure to come in the Budget, and made a point of mentioning the Metro for Dublin, which is not covered in the Estimates.

Foreign Affairs' budget is up 14 per cent to €155 million, but there have been big cuts in some programmes such as the Programme for Peace and Reconciliation, which is slashed by 95 per cent to €156,000. The increase in Overseas Development Aid is substantial, jumping by 55 per cent to €400 million. This equates to 0.45 per cent of GNP but is still some way short of the United Nations' target of 0.7 per cent.