'Yes Minister' approach lives on in Merrion Street

Business Opinion/John McManus: One of the more popular journalistic pastimes in recent months has been trying to find out if Charlie McCreevy seriously misled the electorate over the state of the economy in the run-up to the election. The Minister for Finance's utterances in advance of the poll last May 17th have been microscopically examined, but only a few glancing blows have been struck. Certainly nothing that comes close a knockout blow has been landed.

As our contribution to this undoubtedly worthwhile enterprise, this column made a request under the Freedom of Information Act to the Department of Finance for any records provided to the Minister in the eight weeks prior to the election that might relate to changes in the budget day estimates for tax receipts and other such economic data. The theory was that this should establish pretty categorically whether the Minister was told that the economic projections on which he was fighting the election were as worthless as they turned out to be.

The Department responded that it could not locate any records of this nature. The steps undertaken to establish if any existed included interviews with members of staff who might have dealt with such records and sending an e-mail to everybody in the Department asking them if they were aware of any such record. Finally the Department carried out a "physical search of all relevant areas of the body in which the records sought might possibly be held".

There is obviously no smoking gun lurking on Merrion Street, then. But the Department did kindly provide a copy of a document that deals with the issue at great length, called Chronology of Budgetary Developments in 2002.

The three-page memo goes through what the Minister knew and when he knew it before arriving at the following conclusion: "To summarise the position in relation to 2002, neither the Minister for Finance nor the Government had information before 17th May which showed the budget targets would not be met".

The key events are set out in the memo. We pick up the story in April, just ahead of the election, when the Exchequer returns were starting to show that the budget day projections for tax revenue and spending were starting to unravel. On May 1st the Department sent a note to the Minister saying "there was no reason to move away from the budget day target for taxes".

This view - according to the memo - was consistent with the view of the Revenue Commissioners who had sent the Department a note that "very tentatively" estimated that tax receipts by the end of the year would come in on target.

In addition, the April Expenditure Management Report, which the Minister submitted to Government on May 8th, "did not indicate that there would be any change in the end-year tax or spending positions."

So. With one bound our hero is free? Perhaps not.

The report goes on to state that immediately after the submission of the April expenditure report, the "Department of Finance initiated meetings with a number of departments to emphasise once again the need to manage within approved allocations". The meetings were held with the Departments of Health and Children and Environment and Local Government on May 9th and 14th respectively. The two departments "indicated they were facing spending pressures on a number of programmes which could result in overruns on their votes", according to the Department memo.

Further meetings were arranged "immediately" to "examine spending trends ... ascertain the full extent of the pressures and ascertain to what extent any potential overruns could be avoided". It is pretty clear from the memo that the Department must have had some doubts at this stage about the chances of the budget targets being met.

The discussions referred to no doubt fed into the May Expenditure Management Report, which outlined overruns of some €250 million and "trends" that if left "uncorrected would lead to a significant overrun this year". This report was presented to Government on June 10th, and was one of two documents that were inadvertently released under the Freedom of Information Act to the Sunday Tribune.

The other document was a memorandum setting out the Government's economic and budgetary strategy. It identified the need for savings of €900 million in the cost of day-to-day services if the coming Budget was to fulfil at least some of the commitments made on budget day.

The publication of these two documents seemed to indicate that Mr McCreevy had seriously misled the electorate and led to calls for his resignation, which have been echoed ever since.

The Department's explanatory memo does seem to scotch this suggestion, upholding the Minister's position that the first he knew of the problem was when he got the May Expenditure Management Report. If this is the case, then the information contained in the memo raises another - and in ways more fascinating - issue. The question is this: If the officials at the Department of Finance were so alarmed about spending overruns after receipt of the April report, why didn't they bring the matter to the Minister's attention?

If the Department was concerned enough to haul in officials from Government departments to give them a talking to, then surely it should have told the Minister that his statements on the election trail were potentially at variance with the facts. Given the sort of questions that were being asked about the robustness of the figures being bandied around, such an omission seems almost negligent.

Presumably the Department kept its counsel for much the same reason that the Minister appears not have asked it whether there was a real danger that the budget day targets would not be met.

For connoisseurs of the 'Yes Minister' school of government this is no doubt a classic example of just how such things should be done. It is very clever, but not really much of a way to run a country, never mind send people out to vote.

jmcmanus@irish-times.ie