The recent publication of the revised Estimates of Expenditure 2012 are a further, if limited, step on the road to reform of the national finances. Nonetheless, the publication does indicate a shift towards an outcome based financial management process rather than the traditional output configuration. With the publication we are beginning to see an effort at integrating the political priorities of the Programme for Government with the plans for public spending. The Estimates are beginning the move towards relating annual spending with what is expected for that spending and what impact the spending is expected to achieve. This welcome move will have some distance to travel but at least a start is being made and at least it is now clearer what the Government expects to achieve in its annual spending.
The Estimates, for example, set out each Department’s policy mandate and profile the key areas to be addressed in 2012. From now on it will become increasingly possible to examine spending in the context of direct policy expectations and qualitative assessment will now be facilitated in regard to meeting policy objectives. In the case of the Department of the Environment, Community and Local Government, for example, it is now relatively simple to understand exactly what the Department has to achieve and to relate it to a particular political priority. In overall terms the Department is expecting to spend almost €1.3 billion in 2012 on both current and capital expenditure. This will be a 20% reduction relative to 2011. Some €445 million will be spent on day-to-day requirements with the balance of almost €829 million on capital investment, mainly through the local authorities. For this the Government expects to build several thousand housing units in one form or another, 50 or so water treatment and waste water facilities, sort out the establishment of a national water utility and make significant inroads to Ireland’s on-going problems with EU Regulatory infringements (not unimportant in the context of Ireland’s EU Presidency in 2013 not to mention the need to address management of groundwater pollution!).
Some of the key policy areas we can expect to see coming forward from the Minister this year are clearly highlighted. These include among others:
• Reforms to the country’s social housing policy arena
• Publication of a new Homelessness Strategy and the devolution of funding responsibilities to local authorities
• Drafting and passing of a revised institutional framework for water services in light of the move towards a national utility
• Publication of a much awaited Climate Change Bill
• Submission of a new National Waste Strategy for approval to Government
• Publication of a Policy Statement on the reform of local government and the continuation of re-configuration of Limerick, Tipperary and Waterford Local Authorities
• The development of a shared services plan in line with the objectives of the Public Service Reform Plan
• Continuation of supports under the Local Development process including targeting of new enterprise and the unemployed
• The on-going review of Planning and Development Plans
Spending under the local government fund will amount to almost €1.2 billon and which will be resourced primarily through the Household Charge of €160 million and motor taxation of just over an expected €1 billion. The monies will largely be dispensed to local authorities through a general grant of €651 million, road grants of €405 million and other miscellaneous schemes of €67million. The credit in the fund is expected to be in the order of €143 million at the end of 2012 an increase of approx. €20 million over the outgoing balance in 2011.
Spending from the Environment Fund will be around €79 million funded from the Landfill Levy of €52 million and the plastic bag levy of €15 million. Current spending will absorb most of this funding.
The move to publish this level of detail is an important first step on the way to a more transparent management of the fiscal affairs of the Country. It also will provide the Opposition with the opportunity to browbeat a Minister if the projected outcomes are not being delivered so expect to see a very close examination of the revised Estimates in the early Autumn as the members of the Oireachtas return from the Summer holidays!
