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Speech

Speech by Minister Paschal Donohoe TD, Spending Review Conference 2019

Last updated: 29 March 2019
Published: 21 March 2019
From: Department of Public Expenditure and Reform

Introduction

Check against delivery

Good morning ladies and gentlemen.

I am very pleased to be here at the annual Spending Review conference hosted by IGEES.

Launched in 2016, this is the third and final year of the current Spending Review round and I am pleased to have attended this conference on each of the occasions it has been held.

I hope to spend a couple of minutes this morning reflecting on the current economic and fiscal position and how it highlights the importance of evidence and analysis.

Economic Context and Fiscal Position

It is evident that Brexit will have implications across our economy and any form of Brexit will imply costs to our economy.

We have been working closely with our partners in Europe to protect our interests.

Our focus, has, and will continue to be, on securing a deal which ensures a close relationship between the EU and the UK.

The Government has taken a variety of steps to minimise the impact on our economy and to ensure that we are as prepared as possible, whatever the outcome of Brexit.

We have run communication and outreach campaigns and have worked closely with stakeholders in enterprise and industry to ready our supply chains.

The Brexit Omnibus Bill has been enacted and provides the regulatory framework for a smooth transition in the event of no-deal.

Intensive work is continuing across Departments and Agencies to implement the Contingency Action Plan published by the Government in December.

Departments have, and continue to, work closely with the European Commission to ensure that appropriate supports are in place to assist our most exposed sectors.

Finally, the Government’s ongoing commitment to responsible management of the public finances strengthens our ability to respond to the risks and challenges we face.

As I set out in Budget 2019, we now have a balanced budget for the first time in a decade and it is my intention to run budget surpluses into the future if the economy continues to perform strongly and to use them to reduce our national debt.

As a small, open economy it is important that we continue this path which has been set out across a number of budgets, responsible budgets which allow for sustainable increases in public services.

In 2019, total gross voted Government expenditure will be €66.6 billion. This will deliver programmes across all sectors including health, education and social protection.

It will protect the most vulnerable in society and prioritise core social services.

It will fund significant capital expenditure in line with the National Development Plan to enhance the growth potential of the economy and provide key social infrastructure such as public transport and social housing.

Each October in my role as Minister for Finance and Public Expenditure and Reform, I am tasked with making choices in relation to the level of expenditure.

While often the focus externally is on the incremental budgetary package, it is critically important to me that our focus is on the totality of expenditure.

Spending Review

That is why I believe the Spending Review, and the wider Irish Government Economic and Evaluation Service (IGEES), are so important.

IGEES and the Spending Review are part of a range of reforms that include the Open Data Initiative, Public Service Performance Reporting and the National Economic Dialogue, that have influenced the way we now implement expenditure policy.

These reforms promote transparency and citizen engagement with the budget process, which I believe are critically important in today’s political and social environment.

I recently had the pleasure of attending the IGEES discussion on small advanced open economies where we had a very engaging debate about how we grapple with issues such as globalisation and competitiveness.

I am encouraged that much of the discussion that day was facilitated by the research that is being conducted by IGEES colleagues.

I am encouraged because through the valuable work that you continue to do, my colleagues and I in Government have more information and more evidence to support the decisions we make about where we should increase expenditure and where we may need to re-prioritise resources.

A vitally important input to those decisions are Spending Review papers, and while each of the 50 plus Spending Review papers completed to date adds significant value to the policy making process, I would like to highlight just a number of areas where your work has led to important changes.

In the Education sector, decisions taken as part of Budget 2019 will see the creation of the Human Capital Initiative.

Spending Review analysis, supported by the independent review of the National Training Fund (NTF) and the Department of Education and Skills’ NTF Review Implementation Plan, will ensure that we continue to meet the skills and education needs of our economy in the future.

Analysis in the area of Employment Affairs and Social Protection has supported the re-prioritisation of existing expenditure across employment supports, disability, work incentives and staffing.

Work completed in the Justice Sector has directly informed both the budgetary process for 2019 and will support the medium term policing reform agenda now underway.

I could go on.

Of course, the challenges and opportunities we are facing push us to look at how we can improve the way we do things.

The Spending Review process is no different and I am delighted to have Professor John O’Hagan on board to undertake a review of the work that has been done over the last number of years.

I know John, as many others in this room will, from his lecturing days in Trinity College and if his observations on my assignments are anything to go by, I know we will have a quality review that will inform the future of Spending Reviews in Ireland.

IGEES and evidenced informed policy

The Spending Review is one of a number of the platforms through which policy research and analysis is undertaken within the Civil Service and much of this work is delivered and supported by the Irish Government Economic and Evaluation Service.

Given that it has now been in existence for seven years it is timely to consider the progress that IGEES has make to date.

There are now over 160 IGEES staff working across the all Departments and many of you are here this morning.

Many of you have been working in Departments over a longer period while some of you are newly recruited.

In all instances, you add to the capacity of our Government Departments by undertaking policy analysis, generating evidence and informing key decision makers including Government Ministers.

There has been a large breadth of analysis completed by IGEES to date across Departments and policy areas.

In total, over 200 papers have been published by IGEES staff since 2012.

This level of output, combined with the ongoing work staff have within their Departments, demonstrates the level of evidence that is being generated to inform policy making.

Another key feature of the Service, which helps to inform the policy process, is providing platforms for the discussion and debate of evidence.

Events like today, the IGEES annual conference and regular Strategic Policy Discussions allow us to take some time to reflect on important policy questions and to discuss the evidence and data around it.

The development of IGEES over the last number of years has enhanced the capacity within Government Departments and this supports the delivery of analytical work across key policy areas.

To guide the next phase of the Service’s development, a new Medium Term Strategy will be developed this year.

The purpose of the strategy will be to consider progress to date more fully and to assess future steps in areas such as analytical output, learning and development and communications.

As part of that review I am pleased to note that the OECD will be undertaking an analysis of IGEES as part of their work programme on fostering evidenced informed policy making and evaluation.

The input from the OECD will be of great use in the development of the next Medium Term Strategy and will allow us to compare our approach to, and leverage learnings from, international practice.

Conclusions

I will conclude by once again thanking you for inviting me to speak to you all today.

I also want to thank you for all of your hard work. It doesn’t go unnoticed by me or my colleagues.

I hope you have a productive morning, I know you have a packed agenda, and I look forward to reading, and engaging, with your work in the weeks and months ahead.

ENDS