The Minister for Public Expenditure and Reform, Michael McGrath TD, today (Friday, 23rd July) published the Mid-Year Expenditure Report (MYER) for 2021.

This follows publication of the Summer Economic Statement last week that set out the parameters for Budget 2022 and the fiscal strategy out to 2025. This strategy sees a phased unwinding of the exceptional Covid-19 supports and growth in core expenditure of c. 5 percent on average over the period to 2025.

Within an overall provision of €31 billion across 2020 and 2021, it is estimated that Government will have made available €15 billion in additional direct expenditure funding to respond to Covid-19 this year. This provides significant funding for employment and income supports, in particular the Employment Wage Subsidy Scheme and the Pandemic Unemployment Payment, and to support key services including Health, Education and Public Transport.

The MYER provides detail at Departmental level of the amounts allocated for Covid-19 related spending and sets out a clear baseline expenditure position in advance of the upcoming Estimates process. This process will also take into account the expenditure trends to the end of June outlined in the MYER.

As outlined in the Summer Economic Statement and detailed further in the MYER, within an overall increase of 5 percent of core spending there are incremental costs that need to be met every year in relation to existing services. Given this context, there is a requirement for a focus on value for money to support effective public services that deliver improved outcomes. In support of this, a range of budgetary reforms have been introduced in recent years with the Spending Review being an important element. The MYER provides a summary of the Spending Review 2021. The first tranche of papers from the 2021 Spending Review will be published shortly with further papers to follow in the autumn.

Earlier this month, Government approved and published the First Report on a Well-being Framework for Ireland. The MYER includes a chapter setting out how the development of this Well-being framework can inform efforts to improve the impact of public policy on people’s lives.

Commenting on today’s publication, Minister McGrath said:

“Overall voted expenditure is projected at over €90 billion this year. Pre-Covid, planned expenditure for 2020 was €70 billion. This increase in expenditure reflects the significant level of resources provided to support our people, business and public services through the pandemic. With the vaccination programme continuing at pace, this will support the further reopening of society and recovery in the economy.

“As outlined in the MYER, with almost €7 billion available to fund Covid related spending next year, Government is committed to a phased careful withdrawal of the funding for exceptional measures. This will be done in a way that supports our people and economy to recover and returns the public finances to a sustainable footing.

“Expenditure on core expenditure programmes is to grow by just over 5 percent on average over the period to 2025. This growth will support a massive investment in our public capital programme and enhancements to public services and social supports. Sustainability in expenditure requires that core expenditure increases implemented today are affordable over the medium term and also that the full amount of public spending is delivering improved outcomes for our people.

“This requires an ongoing and increasing focus on value for money by building on the budgetary reforms such as the Spending Review and Public Spending Code.”