The Minister for Finance, Mr. Brian Lenihan, T.D., presented the 2010 Revised Estimates for Public Services to Dáil Éireann today. The Minister for Finance noted:

“The Revised Estimates Volume provides for the extensive public services and capital investment that the State will perform in 2010. Even with reduced budgets overall, gross spending will still amount to €61 billion or 38% of GDP in 2010. This expenditure will provide public services including social welfare assistance, the provision of healthcare and education and the many initiatives to support and stimulate economic growth.

The reductions in public expenditure will also assist in supporting economic growth by improving the competitiveness of our economy. Improvements in competitiveness will encourage businesses to invest and create jobs.

Given the lower level of revenue resources for 2010, there remains a need for the strict control of public expenditure, which the Government successfully completed last year.

However, even with reduced resources, we are maintaining public capital investment at almost 5% of GNP. This is one of the highest in the euro area and will underpin our ability to achieve an early return to positive economic growth later this year and next.”

The Minister explained that the Revised Estimates Volume (REV) published today gives a fuller, more detailed breakdown of spending by each Department and Vote announced on Budget Day. The REV also gives the provisional outturn for spending in 2009. Details of changes to the Estimates are set out in the Volume itself.

Total gross voted expenditure in 2010 is projected at €61.2 billion, just under €2 billion less than 2009. The year-on-year percentage decrease over 2009 is 1.8% in respect of Current Expenditure, 12.3% for Capital and a decrease of 3.0% overall, in line with the percentages published at Budget time. All the major Vote Groups show a decline except for Social and Family Affairs and Enterprise, Trade & Employment.

The main gross spending areas in the REV are:

Capital Expenditure

Projected Gross Capital expenditure for 2010 is €6.4 billion. Despite this being a reduction on 2009, the level of output should be in line with that of last year due to an ongoing fall being experienced in tender prices. Capital expenditure is being re-focused under the National Development Plan towards projects that promote job-creation and economic capacity. The capital expenditure programme this year will directly and indirectly support jobs throughout our economy.

Overall capital investment is being maintained at around 5% of GNP – a very high rate by international standards – and the current competitive environment for tender prices will result in better value-for-money for State spending. This will allow for a continuing and substantial enhancement of public infrastructure, including in the following areas:-

(a)    completing the Major Inter-Urban routes;

(b)    substantial investment in public transport;

(c)    major investment in social and affordable housing;

(d)    a major schools programme;

(e)    an Enterprise Stabilisation Fund;

(f)      investment in water services and energy efficiency.

Scale of Expenditure Consolidation Effort

The Revised Estimates Volume reflects the cumulative effect of the range of expenditure-containment initiatives undertaken by the Government over the past two years:

• The 2010 Budget made €4 billion of expenditure savings in line with the Government’s objective to stabilise the public finances.

• the 2009 April Supplementary Budget provided for total expenditure savings of €1.8 billion in a full year.

• this is in addition to the savings of around €1.8 billion announced by the Government in February last year; the disciplined approach to expenditure management that underpinned the October 2008 Budget allocations; and the 2009 savings and efficiencies of €1 billion that were announced in July 2008.

Capital Carryover

A sum of €126 million in capital savings from 2009 is available for spending in 20010 under the multi-annual capital envelopes carryover facility.

The REV is available on the website at www.finance.gov.ie.

Ends

18th February, 2010