Vol. 1044 No. 6
1. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to outline the process for determining the appropriate amount of funding under existing service levels, ELS, as a whole and for individual Departments, including where budget deficits exist; and if he will make a statement on the matter. [47037/23]
I would like the Minister to outline the necessary funding to maintain ELS to the assigned Departments, how it is determined and how much is needed for standstill costs, namely, those relating to demographics, inflation and other pressures. This is particularly important following the Government's decision to allocate far less to health to meet standstill costs than what seems was necessary.
I thank the Deputy for her question. The summer economic statement and the mid-year expenditure report published in July outlined an estimated amount of €2.3 billion in respect of the additional costs arising in 2024 to deliver ELS. This amount equated to approximately 3% of the core current expenditure base. This provision took into account the additional amount required for ELS in previous budgets. In recent years, the overall provision in this regard has been in the region of 3% of the expenditure base. Setting out the estimated overall amount required for ELS in the summer economic statement provides greater transparency in respect of the amount that is available for new policy measures well in advance of discussions on budgetary measures.
The ELS provision is a significant element of the budget package and does not represent new policy decisions. However, it is often used to deliver more supports and more services for our population. It includes adjustments in expenditure as the size and demographic composition of our population changes, it allows for the provision of funding for additional benefits to service users for measures rolled out and decisions taken in previous budgets. It also makes provision for the costs of existing public service pay deals. While the summer economic statement set out an overall provision of 3% of the core current expenditure base in respect of ELS, the actual requirement by Department varies, with discussions in relation to the ELS requirements for the following year being a core component of the Estimates process.
ELS are extremely important. Let us be clear, we are talking here about the amount of money a Department needs to continue to provide services at the same level. If a Department is given the correct amount of money, it can stand still. Services will be maintained. If, however, a Department is not given enough money, one of two things will happen- either there will be cuts or the Department will run a deficit.
Budget 2024 provided only €708 million to maintain ELS in the health budget. The Minister and I both know that this is not the standstill cost of health. The head of the HSE, Mr. Bernard Gloster, on Tuesday, confirmed to the Joint Committee on Health that unless he makes cuts there is an in-built deficit in the health budget for 2024. Does the Minister disagree with the head of the HSE? Is it not irresponsible and reckless of the Government to knowingly underfund health for 2024 and to force those involved to run a budget deficit?
I certainly acknowledge that there is a risk of a deficit for 2024. It would not be credible if we were to fail to acknowledge such a risk in light of the recent history of Supplementary Estimates being needed for the Department of Health over many years and those Supplementary Estimates being in the context of either deficits or new policy measures being taken by the Department with, of course, the support of the Government. From a funding point of view, however, I would make the case that the level of funding that we are now investing in the health service, at €22.5 billion, is exceptionally high. To put it in context, in 2016, the equivalent figure stood at €11.8 billion. We have seen a huge increase in funding that is needed for health service in recent years.
The summer economic statement outlined €3.2 billion in what are known as the budget decisions. Essentially, money was set aside to meet ELS and other existing commitments. On budget day, that had been reduced by €500 million. We have been given no explanation as to how this was possible or what was done. This is no way to manage a budget process. The level of transparency is simply not good enough, especially when we see Departments, such as the Department of Health, not being given enough money to meet the standstill costs.
The Minister has an opportunity to bring more clarity to this issue. The money was clearly identified as being needed at that time, in July, to meet existing commitments. What allowed the Minister to reduce the budget decision allocation by €500 million from when the summer economic statement was published in July to the budget day in October and how can we take seriously the information present in the summer economic statements in the future if €500 million can be removed without explanation?
What the Deputy is referring to is the funding that was made available for ELS in the summer economic statement. That is a standard feature of the Estimates process. I would have indicated this when the summer economic statement was published - if not at the recent committee meeting - and certainly on many other occasions.
A standard feature of the Estimates process is that the amount of money that is needed for ELS changes during the Estimates process. Mostly, the ELS figure goes down. I can remember one occasion on which it went up. The reason for that, and how that happens, which I can be very transparent about, is that when I engage with each Department and Minister, the amount of funding they believe is needed for ELS can differ during the Estimates process as we look into what costs will be for the following year and at they new decisions the Ministers involved may want to make. It is very much a standard feature. That figure has moved in either direction over a number of years.
3. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to provide details on the level of engagement between the Office of Government Procurement and the Competition and Consumer Protection Commission, CCPC, in respect of public procurement bid-rigging and if he will make a statement on the matter. [47038/23]
Could the Minister outline the level of engagement between the Office of Government Procurement and the CCPC regarding public procurement bid-rigging? The CCPC is the State body responsible for the enforcement of competition law. One of the areas most at risk from anti-competitive behaviour is public procurement, particularly with regard to large construction contracts that involve significant amounts of money and where only a few companies bid. We need to ensure that public money is being adequately protected and that we get value for money.
As a division of the Department of Public Expenditure, National Development Plan Delivery and Reform, the Office of Government Procurement, OGP, is responsible for national procurement policy, the national eTenders platform and for sourcing common goods and services. The OGP engages with stakeholders on an ongoing basis and has engaged with the Competition and Consumer Protection Commission, CCPC, which is the statutory body responsible for promoting compliance with and enforcing competition and consumer protection law in Ireland, on a range of issues.
The OGP's public procurement guidelines for goods and services advise that where a contracting authority suspects bid-rigging or collusive tendering, such activities represent serious infringements of competition law and should be brought to the attention of the CCPC. The OGP's guidelines also refer to the OECD guidelines for fighting bid-rigging in public procurement.
In the interests of time, I will briefly itemise the engagement that has occurred on this topic. The CCPC and OGP met a number of times in 2022 to discuss the availability and suitability of public procurement data for processing through bid-rigging screening tools. The OGP runs a series of procurement officers’ forums to engage with a wide client base on a number of key topics relevant to procurement practitioners. The CCPC sits on both the SME advisory group, which is chaired by Minister of State, Deputy Ossian Smyth, and its communications subgroup, which is chaired by the OGP. The OGP runs a series of community of best practice forums where public procurement buyers come together to exchange best practices and share experiences. CCPC employees have attended these events, most notably in Waterford, Cork and Sligo.
In July 2022, six Spanish construction firms were fined €200 million by the Spanish regulator for colluding on bids for public construction contracts. The Spanish state has banned these companies from participating in the public procurement process. Five of those Spanish companies have won public construction contracts in Ireland. What they did was essentially was agree who would win in advance of the bid, in other words, "It's your turn next". Three bids would be submitted and then two would later pull out leaving one bidder remaining. The Government of the day would have to choose between starting the process over and going with the only remaining bid. Is the Minister aware of these developments in Spain and the operation of these companies here in Ireland? If he is, what measures has he taken to ensure that the practice for which they were fined in Spain is not happening here? Is the CCPC adequately set up to investigate collusion of this nature and protect public money?
Regarding the powers that are available to the CCPC, in 2022, the Competition Act 2002 was amended in 2022. The Competition (Amendment) Act 2022 transposed Directive (EU) 2019/1 of the European Union to create a specific new criminal offence of bid-rigging. That Act identified several practices that would be deemed to be criminal behaviour, some of which the Deputy just described. The reason that change was made was to ensure the CCPC would have sufficient enforcement powers to combat bid-rigging effectively.
We do all we can to give the CCPC and similar bodies the resources they need to implement laws like this. It goes without saying that if the Deputy has any founded concern regarding any bidding processes not being conducted appropriately, I am sure she will raise that directly with the CCPC because she may have very legitimate concerns that merit scrutiny or investigation by the CCPC.
I have. I will not read out the names here today. I will raise it with the CCPC because I have been looking at some patterns involving contracts that have been awarded here that warrant further investigation and explanation. I will not identify the companies, even though I have the details here. I cannot see how companies that were involved in bid-rigging in Spain and were fined for doing so would then come here and the same concerns would not arise. There have been a number of very well-known projects where a number of the bidders would have worked together in the past and you find that coming up to the time when the contract is going to be awarded or the decision is going to be made, suddenly two of them pull out leaving only one bidder. This is a serious matter and we need to reassure the public that everything is transparent and we are really getting value for money in these projects.
At this point, and the Deputy has acknowledged this by the information she is both sharing and not sharing here today, it is important to afford due process. If the Deputy has concerns she believes are worthy of investigation, it is important that the relevant bodies are contacted and the information is shared with them. I will simply assure the House that my view is that our procurement practices are conducted in compliance with the law. The OGP, both directly and indirectly, seeks to create an environment in which tendering and procurement processes are carried out in a way that is consistent with best practice to deliver good value for the taxpayer.
There have been several occasions on which the number of companies participating in bidding processes is far lower than we would have wanted or expected, but my strong view is that much of that is due to legitimate and understandable economic circumstances as opposed to anything else. It is the right of the Deputy to raise this matter here today and raise it elsewhere if she feels it is worthy of scrutiny. I can simply offer assurance to the House regarding the conduct of our procurement practices for all but, of course, any serious matter does need to be investigated.
4. Deputy Róisín Shortall asked the Minister for Public Expenditure, National Development Plan Delivery and Reform his response to a media report (details supplied), the engagements he has had with the Minister for Health and the chief executive officer of the HSE since budget 2024 was announced on 10 October last; his views on whether the health service budget for 2024 is sufficient to meet patient need and progress Sláintecare reforms; and if he will make a statement on the matter. [47189/23]
Does the Minister accept that the deficit in this year's health funding was identified in the early months of this year by a number of people in the HSE and the Department? We have seen that those concerns about the risk were very well founded. Does the Minister accept the fact that there was a problem with the allocation made this year and that this will have a clear knock-on effect in 2024?
The operation of the health service budget for 2024 is, as is the case with every departmental budget, a matter for the Minister for Health and his Department. It is the responsibility of that Department to decide how it allocates funding of €22.5 billion to respond to the many legitimate demands and needs our health service faces at the moment. It is important to note that since 2019, this Government has prioritised very significant and unprecedented investment in the health service. As a result, Ireland continues to spend more of its national income on health than the majority of European countries.
This investment has delivered an increase in staff of over 22,000, which will bring the total numbers employed in the health service to approximately 143,745 by the end of this year with, as I have noted, funding of €22.5 billion.
Overall, a strong level of funding is in place for our health service. Funding has increased by €7.4 billion from 2019 to 2024. With regard to Sláintecare, which is referenced in the written question the Deputy put to me, my understanding from the Minister for Health is that the programme board is making good progress towards the next implementation framework. I also understand that the board and the Sláintecare programme management office are working together to identify further measures that can be taken from 2024 to 2027. My officials will engage with the Department of Health on future Estimates processes to consider the phases of reform under Sláintecare.
With regard to budget preparations, there was extensive engagement with the Department of Health in determining the budget 2024 allocation. I have had continuous contact with the Minister, Deputy Donnelly, in the run-up to the budget and in its aftermath. The Deputy asked me whether I have had engagement with the HSE's chief executive. I have not had such engagement since the budget was announced.
The Minister says that control of the budget is a matter for the Minister for Health, which is true, but the issue is the size of the allocation which is, in effect, determined by the Department of Public Expenditure, National Development Plan Delivery and Reform. It is the quantum of the allocation that we are talking about and it is the Department of Public Expenditure, National Development Plan Delivery and Reform which decides that. Just in the past week, Mr. Bernard Gloster made it very clear that two significant elements of increased spending within the Department refer to areas over which nobody has any control. The first is inflation, including inflation in the cost of cleaning, energy and food. For example, the new contract for energy represents an increase of 85% on last year. The second element is unforeseen demand because of delays during the Covid years. Does the Minister accept those two reasons for increased spending and that nobody had any control over those elements?
The question the Deputy put in written format is a little different from the questions she is putting to me now. I want to answer them all in the interests of transparency for the Dáil. I will first deal with the questions the Deputy has just put to me. Do I accept that it is very difficult for our hospitals and the HSE to influence the level of demand for health services in the short term? Yes, I do. Across the medium term, it is possible to influence that level of demand through measures we take to improve the health of our country, through the use of medicines and through decisions on where our patients are treated. Do I accept that the impact of inflation on the delivery of services cannot be controlled? It is possible to have a degree of control over that through decisions made in respect of procurement and how we manage the impact of rising costs. All other Government Departments are experiencing the impact of inflation in the decisions they have to make and in the funding of their services. While the challenge of inflation has some particular health dimensions, it is also something that all elements of our public service face at the moment.
Over the past couple of years, a major reform programme, Sláintecare, has been under way in the Department of Health. That involves a movement to a new, lower cost model of care. We have heard from the chief executive of the HSE, the Minister for Health and the Secretary General of the Department of Health that there is real progress being made. We would all agree that progress is being made on moving to that new model of care, which is a lower cost model. That does not happen without incurring a cost. You do not click your fingers and then, next week, there is a new model of care.
Absolutely.
There is an element of parallel models while you are moving to the new one. However, there was clearly momentum with the progress being made. That is now going to be slowed down. Can the Minister stand over this badly needed reform of the health service being slowed down as a result of the allocation from his Department, because that is what all of the senior people in health claim is happening?
We will continue to find ways to make progress on Sláintecare.
Did the Minister used the term "find ways"?
It is important to acknowledge that progress on Sláintecare falls under four different pillars, namely. affordability, accessibility, better outcomes for patients and reforming our health service. With regard to affordability, I thank the Deputy for acknowledging the progress that has been made in respect of inpatient hospital charges, the expansion of free GP care, what we have done in the drugs payment scheme, what we are doing regarding diagnostic scans for patients, free contraception for women up to the age of 31 and-----
My question was on the need to continue that reform.
Excuse me. We are now also making progress on assisted human reproduction. These are measures that are going to continue across this year. We will ensure the commitments we have made in these areas are delivered upon. We will find ways to continue the momentum on Sláintecare, for example, through the opening up of new hospital beds and the delivery of medical care professionals where they are needed, in line with what is funded. That will continue. Sláintecare is about more than just affordability. It is also about three other strands.
Absolutely but they need to be funded.
5. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to outline the estimated level of capital expenditure as a percentage of GNI* for 2023 and 2024 respectively; how this compares with estimates in the national development plan; and if he will make a statement on the matter. [47039/23]
Will the Minister outline the estimated level of capital expenditure as a percentage of GNI* for 2023 and 2024 respectively and how this compares with estimates in the national development plan, NDP? The latter is a multi-annual plan and, as such, the Minister will agree that inflation, economic growth and GDP should be taken into account. It is important that we have effective and transparent measures in respect of capital investment, particularly during times of high inflation.
The NDP sets out an ambitious programme for public investment in Ireland of €165 billion. This expenditure will be pivotal in delivering the vital infrastructure we need to support our future climate, social and economic requirements. In 2023 and 2024, over €12 billion and €13 billion, respectively, will be made available from the Exchequer for investment in public capital projects. This funding will provide more schools, homes, hospitals, road and public transport projects. To put this in context, capital expenditure in 2024 will be almost €8.6 billion or 189% higher than the €4.5 billion allocated in 2017. With the context set, I will answer the Deputy's question as to what that means. It means that estimated capital expenditure as a percentage of GNI* is anticipated to be 4.1% in 2023 and 4.3% in 2024. These rates are below the projections of 4.9% and 5.1% set out in the NDP in light of the very strong performance of the economy in the recent past, which has led to strong growth in GNI* since the publication of the NDP in 2021.
Our investment is still well above the recent EU average of 3% of national income. In budget 2024, I allocated an additional €900 million over the 2023 allocation for essential investment. This will bring total core capital investment to €12.8 billion, an 8% increase, which is in line with our NDP targets. As outlined in the summer economic statement, a further €250 million will be made available for 2024 from critical infrastructure projects. This will be funded from windfall Exchequer receipts.
As the Minister has said, the NDP was reviewed and the targets for capital investment as a percentage of GNI* were set in 2021. The revised NDP also set out departmental capital ceilings for 2025. In budget 2024, we saw the Government stay within those NDP ceilings. The 2021 targets set for 2023 and 2024 were 4.9% and 5.1% respectively, as the Minister has said. The Department now estimates that the rates will be 4.1% and 4.3% so there is a 0.8% shortfall in both years, 15% behind profile for both years. By my calculations, this is a shortfall of €2.3 billion or €2.4 billion in each year. Does this not mean that the Government is far behind on capital investment in real terms?
Why was budget 2024 not used as an opportunity to address the shortfall in capital investment? We saw no additional capital investment in housing despite the ongoing housing crisis and we had issues earlier in the year with capital for education.
There has been an increase in capital investment but the increase in capital investment is in line with the indications we gave for the national development plan a few years ago. The reason we make decisions years in advance to increase investment is to give our economy the ability to organise itself so that it is able to build and transform this higher level of capital spend into output, into new schools and new homes being built, and into the national broadband plan being expanded.
On the point the Deputy has made on our capital expenditure now having a lower share GNI* versus what we originally estimated, I am also receiving a great deal of advice from my Department and from institutions that spending any more money on capital investment beyond that which I have already allocated runs the risk of inflation and adding domestic inflation to the European and global inflation difficulty we are facing here in Ireland. That warning is also there.
I thank the Minister and I understand that. We had issues earlier this year, however, with capital projects in education where the Government was forced to row back on the initial plans and to scrap a number of projects because the expenditure ceiling had been reached in inflation. This caused very significant distress to schools and to their communities who in many instances had been waiting years and had gone through multiple hoops to get projects to go ahead. This highlighted the shortcomings of the Government capital investment when it is not responsive to inflation.
My question, therefore, is when will we now reach the 5.1% of GNI* expenditure which should have been reached in 2024? It seems like we are not meeting the levels of ambition set out in the national development plan when we look at the percentage of GNI*. That is the measurement we should be using. Is the Minister committed to reaching a 1.5% of GNI* in capital projects and when will that happen?
Of course I am committed to how we can maintain and grow the capital investment in our economy, but I do not have a guiding anchor of what it should be as a share of GNI* that supersedes the fact that I had to make decisions regarding how we allocate money that is available to us. The first ordered decision is how much money is available to the country and whether we are going to reduce our surplus to increase more in capital investment. That is the first ordered decision and it is a decision made in conjunction with the Minister for Finance. We cannot reach decisions regarding our capital investment as a share of GNI* without first considering how much money is available to us and how appropriate it is to spend that money in our economy. Having that as a target which supersedes everything else, I believe, is risky. This House, this Government and perhaps the next government will get to a point where our GNI* is not as positive as it is today. If we are going to have a target of investment as a share of GNI*, that opens up the risk of capital investment falling, which is the last thing I believe we should be doing.
2. Deputy Ged Nash asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when he will publish the Revised Estimates for Public Services 2024; and if he will make a statement on the matter. [47188/23]
My apologies to the Leas-Cheann Comhairle and to the House for my late arrival, and to the Ministers and my colleagues. This was unavoidable. When will the Minister published the Revised Estimates with specific reference to the health Estimate and what will the Minister's planned Supplementary Estimate for health be for this year?
I thank the Deputy for the question. Expenditure Report 2024, published on budget day included budget Estimates. These budget Estimates for public services set out the allocations for the following year for each Vote at programme level. This represents a high-level summary of the budget and allocations for the following year. The Revised Estimates Volume for Public Service, REV 2024, outlines further information setting out the detail of allocations under each programme at subhead level. It also outlines the high-level goal of each programme and the public service numbers related to each subhead line. The Estimates are also supplemented with key performance information regarding outputs, context and economic indicators for each programme. In line with usual practice, it is expected that the REV 2024 will be published in mid-December. This publication date of the Revised Estimates Volume for Public Services allows for consideration of the Estimates by the relevant Dáil select committees at an early stage in 2024.
On the final question put by the Deputy to me regarding the Supplementary Estimate for the Department of Health for this year, for which there will be one and which I have acknowledged, my officials are working on that with the Department of Health at the moment and I hope to be in a position to give a clearer answer on that matter once we are clear on where we stand at the end of October. I am not in a position to give an accurate answer here today to the Deputy.
I think we can assume the Supplementary Estimate will be very significant indeed based on the information that is in the public domain at present. I think everybody in this House, or at least a very significant number of Deputies in this House, and indeed experts would be of the view that the Minister must re-examine the planned expenditure in health for next year. That is very clear. Quite frankly, I say to the Minister that he owes it to the 900,000 people who are on waiting lists who will inevitably suffer. The Minister for Health got his defence in first prior to the budget when he made it very clear that what the Government was prepared to provide to him in an Estimate for next year would not be sufficient. We are very clear on what the HSE chief executive has also said. Will the Minister, therefore, reopen that element of the budgetary process?
The Minister did say he did not want to get into a war of words with the Minister for Health or with anybody else about the health budget but it is the Dáil which passes the Estimate. The Minister is a serious politician, he takes his responsibilities seriously, he is accountable to the Dáil, and the Dáil has a very significant job of work to do constitutionally to pass an Estimate. An Estimate which is a fictitious one should not be presented to this Dáil as it is entirely inadequate to meet the health service needs for next year.
I thank the Deputy very much for his comments and, of course, I am well aware of my duties to the Dáil and the need to put forward factual answers to questions the Deputy raises, which at all points I endeavour to do.
I will just deal with the different layers of the question the Deputy has put to me. First, on the obligation we have to those looking for hospital and medical care within hospitals, this is the reason in my time as Minister for Finance and before that we enabled and added 22,000 extra staff to our health service, including an extra 6,700 nurses and midwives. That is why we have now increased our hospital bed capacity by 1,000 beds. We have seen a very significant increase in funding for the health service in recent years in recognition of the needs the Deputy is describing. Our Estimates and our budgetary process also has to deal with the availability of resources and the fact the Government is dealing with a variety of different demands across many different elements of our public services. Of course, I am aware of the issues the Deputy raises.
I find it quite extraordinary that we are in a position where the Minister for Health would be preparing to introduce plans here in this House and ask the Dáil to approve a budget which the HSE chief executive and he consider to be entirely inaccurate. This is about parliamentary accountability. Our primary concern should be for the well-being of all those of us who depend on a decent universal public health system. There is a question, however, of accountability. That the Dáil would be expected to pass an Estimate which the Minister himself feels he cannot stand over is quite extraordinary. The reality is in any other parliamentary democracy, that simply would not happen. I do not even think it would happen in the UK, even given the circumstances there at the moment, where a Minister would get his defence in first, acknowledge the Estimate itself is entirely inadequate, and would then ask his colleagues in the Dáil to pass it. It is quite extraordinary and I believe this process needs to be reviewed.
Again, I believe it is important to put this budget in the context of recent spending decisions. Over the past eight years, we have seen an effective doubling of our spending within our health services. Over recent years, we have seen an increase in investment in our health services of between €6 billion and €7 billion. We have seen very significant and needed increases in funding for health services at a time when they continue to face very many demands. I will continue to work closely with the Minister, Deputy Donnelly, on the different issues he has raised.
In the context that we have this increase in investment is also the fact the budgetary process is still based on an amount of money and resources that are finite and fixed and which have to be allocated across all of government. We have seen in recent years very significant increases in funding for health, as I said, and even with the funding that has been made available, which is a further €1 billion versus where we were on budget day one year ago, that is also an increase in the allocation.
