merrion street

The review of current expenditure will consider the totality of day-to-day Departmental expenditure over a three year period

The Minister for Public Expenditure and Reform, Paschal Donohoe, TD, has informed the Government of the new approach that will be taken to review current Departmental expenditure in advance of Budget 2018.

In light of the fact that the economic and fiscal context has changed significantly in recent years, and since the last Comprehensive Review of Expenditure was undertaken in 2014, Minister Donohoe is undertaking a review which will inform negotiations for Budget 2018.

Minister Donohoe said: ‘Due to the stabilising of the public finances by Government we have moved from a budgetary cycle where cuts had to be made to one where moderate and sustainable expenditure growth is now planned over the medium-term. However, there are increasing and competing public service demands emerging which means that public expenditure policy must prioritise additional spending between numerous demands. The spending review process supports this’.

“On Budget Day, on 11th October of last year, I announced my intention to undertake a review of Government day-to-day spending so that we can ensure the best value for money for the taxpayer. The design of the approach I am taking reflects this and also reflects lessons set out in the paper Spending Reviews in Ireland: Lessons for the future, which was published by my Department on the same day.

“Budget time now sees much of the public focus fall on the additional amount to be spent that year; the so-called fiscal space. However, we cannot overlook the importance of considering the totality of Government spending when examining budget priorities. In total, €53.5 billion has been made available for day-to-day, or current, spending by Departments this year. This is a substantial amount of money to deliver the vital services we all need and depend upon. With the many competing priorities and demands for resources that present each year, the need to continue to pursue efficiency and effectiveness in public spending is crucial.

“The purpose of reviews such as this is to broaden the Government's toolkit within the budgetary process by creating fiscal space for funding new policies from within existing Department budgets through a systematic review of the existing cost base. This year’s spending review will examine a significant portion of the expenditure base for each Department, with the remaining current expenditure to be examined over a three-year horizon.

“The approach* I am now undertaking in reviewing Departmental expenditure has been designed to systematically examine day-to-day public spending and ensure that policy objectives are being delivered in an efficient manner that will deliver best value for the taxpayer and ensure best use is being made of funding in each area.”

*This approach is in keeping with other recent reforms, notably the expanded Irish Government Economic and Evaluation Service (IGEES) and Action 22 of the Civil Service Renewal Plan which highlights the need to strengthen policy making skills.