Dáil Éireann Debate, Thursday - 2 May 2024
146. Deputy Bernard J. Durkan asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the extent to which his Department monitors inflation in the construction sector, with particular reference to the impact on the delivery and cost of major capital health projects; and if he will make a statement on the matter. [20137/24]
View answerAs Minister for Public Expenditure, NDP Delivery and Reform, I am responsible for setting the overall capital allocations across Departments and for monitoring monthly expenditure at Departmental level. The responsibility for the management and delivery of individual investment projects or sectoral policy strategies, within the allocations agreed under the National Development Plan (NDP), rests with the individual sponsoring Department in each case, including the Department of Health.
My Department monitors overall inflationary impacts which may input on the overall delivery of the National Development Plan. The recent delivery challenges experienced across many Departments, as a result of significant inflation, resulted in a number of changes and supports for project delivery in the Capital Works Management Framework (CWMF) across 2022 and 2023.
In order to safeguard the delivery of key NDP projects, in January 2022, my Department introduced measures to address inflation for new contracts and tenders. Furthermore, in May 2022, a new set of measures to apportion additional inflation costs between the parties to public works contracts were introduced. These interim arrangements were then made permanent in July 2023 which allow for more appropriate risk sharing in the delivery of public works contracts. In addition to these measures, my Department also publishes the Build report annually which assesses the overall trends in construction costs, employment and output, amongst other issues.
The proportion of funding allocated to new projects or to address construction inflation is a matter for the individual Minister and Department in each sector. The delivery of projects has been challenged over recent years by the continued impact of construction inflation on projects. However, it is a matter for individual Departments to prioritise projects for delivery within their overall agreed capital ceilings. The Minister for Health is responsible for deciding on the priority programmes and projects that will be delivered under his remit within the NDP and for setting out the timelines for delivery.
