State approves extra budget of €800m for various departments

The Government has approved over €800 million to Government departments in revised and supplementary estimates this year, but has insisted it won’t affect the overall budgetary parameters for 2016.

Under new EU fiscal rules, the practice has been discontinued of allotting additional funds to departments – mostly health and social protection in recent years – which ran out of cash before the end of the financial year.

This week, the Department of Public Expenditure and Reform allotted a total of over €300 million to three major departments in supplementary estimates. This is in addition to over €500 million allotted to the Department of Health in revised estimates earlier this year.

However, a spokeswoman for Minister for Public Expenditure and Reform Paschal Donohoe said the net effect of the new estimates would not alter the public finance target for 2016. She said the money being made available to the three departments came from savings achieved elsewhere or from additional revenue.

The Department of Education is the biggest recipient and is being allowed €136 million, mainly for school building projects. The Department of Social Protection is to get an additional €109 million, which will finance the Christmas bonus for welfare recipients. Much of the bonus has been restored this year.

The Department of Transport, Tourism and Sport is to get an additional €96 million, while the Department of Jobs will be allotted an additional €35 million.

Shifts of expenditure

The spokeswoman said that, in some instances, shifts of expenditure need to occur within departments. While the overall allocation remains the same, money is transferred from one area to another. “It may be appropriate to bring this to the Dáil’s attention,” she said.

"The Expenditure Report 2017 included additional funds for 2016 to deal with flooding, education and Christmas bonus."

The department, she said, still anticipates that the actual expenditure in 2016 will be in line with the €56.15 billion figure which has been set out.

This will be partly achieved by savings which, on past experience, can be up to 0.5 per cent of overall spending.

The spokesman also said there was potential for upside to revenue projections (including from PRSI). “Supplementary estimates can only be permitted where they can be accommodated within the requirements of the fiscal rules in terms of the projected structural budget balance and application of the expenditure benchmark.

“The allocations being set are expected to achieve compliance with Ireland’s obligations under the Stability and Growth Pact,” she said.