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Public Spending – The Facts
And the Challenges
Donal McNally
2 October 2009
Table 1 Projected Government Finances 2009 (as per
Supplementary Budget April 2009)
€bn
%GDP
% GNP
Current Spending
€62.4bn
36.4%
43.4%
Current Receipts
€51.3bn
29.9%
35.6%
Current Deficit
-€11.1bn
-6.5%
-7.7%
€11.2bn
6.5%
7.8%
€2.0bn
1.2%
1.4%
-€9.2bn
-5.4%
-6.4%
Exchequer Deficit
-€20.3bn
-11.9%
-14.1%
corresponding General Government Deficit
-€18.4bn
-10¾%
-12.8%
Capital Spending
Capital Receipts & Resources
Capital Deficit
Table II Spending 2009
2009
GROSS CURRENT SPENDING
+ 6%
EXCHEQUER PAY & PENSIONS + 2%
NET CURRENT SPENDING
-
0.5%
CAPITAL SPENDING
- 19%
Table III Spending Pressures
Gross Spending 2009
SOCIAL WELFARE
+ 18%
HOUSING
+ 13%
AGRICULTURE
+ 6%
HEALTH
+ 2%
EDUCATION
+ 2%
Table IV
SERVICING THE DEBT
Year
Central Fund Current
expenditure (non-Voted),
incl.debt-servicing costs
€ billion
2008
2009
2010
2011
2012
2013
3.9
5.9
7.8
9.3
10.5
11.2
% of GNP
2.5%
4.1%
5.6%
6.4%
6.8%
6.9%
Table V Planned Fiscal Consolidation
2010
2011
Total proposed
consolidation
Full Year
Full Year
2010-2011
€2,500m
€2,100
€4,600m
Current Expenditure €1,500m
€1,500
€3,000m
Capital Expenditure
€750m
€1,000
€1,750
Total
€4,750
€4,600m
€9,350m
Taxation
%GDP 5.5%
VI
Breakdown of 2009 Current Voted Expenditure of €56.6 billion
Social Welfare
€21bn; 37%
Exchequer Pay
& Pensions
€19.8bn; 35%
Other
Programmes
€15.8bn; 28%
VII
Public Service numbers 2001 - 2009
Increase
%
Health
Education
Justice
Defence
Civil Service
State Agencies
Local Authorities
Public Service
20%
27%
22%
-8%
7%
11%
6%
17%
VIII Special Group’s Proposed Savings and
Staffing Reductions
Ministerial Vote Group/Expenditure Area
Full-Year
Expenditure
Savings
€m
Staffing
Reductions
Social & Family Affairs
1,848
-
Health and Children
1,230
6,168
Education & Science
746
6,930
1,486
4,260
5,310
17,358
Other
Total
IX Structural Spending
Issues
I.
How Spending is Managed



Focus on Short term
Volume of Inputs
Outputs & Performance Secondary
II.
Series of Recommendations








3 Year Budgets
Focus on Outputs
More VFM & Outside Scrutiny
Performance Charters
More CBAs
Look back reviews for Major Projects
Sunset Clauses
Cash Limits
X Other Issues
I.
How Services Are Delivered



Fragmented – Enterprise Supports & STI
Too Many Cooks – 870 Local Bodies
Same Ground Covered – Activation Measures
II.
Do structures Help or Hinder




National, Regional, Local
Stovepipe Functions
Regulators/Ombudsmen
Voluntary Sector
X (Contd)
III.
General Savings



Public Procurement
Shared Services/Outsourcing
Property Management
IV.
Rationalising State Agencies






Policy Focus in Departments
Citizen Focus in Delivery
Specialism v Streamlining
Shared Services
Agency Life Cycle
Difficulty in Meeting “rational” piece of “Rationalisation”.