Debt hit €75bn last year - C&AG

The State's net national debt increased by almost 50 per cent to €75.2 billion last year, according a report on the accounts of the public service published today.

Comptroller and Auditor General John Buckley said this increase, from €50.4 billion a year earlier, could be attributed to funding the growing Exchequer deficit.

Gross National Debt stood at €97 billion with €22 billion of this accounted for by liquid assets.

“In the 18 months to June 2010 the structure of the debt, in terms of duration, has altered significantly,” the report says. “The proportion of the Gross National Debt made up of short-term borrowings had decreased from 30 per cent at the end of 2008 to 7.6 per cent at the end of June 2010.”

In his annual report, Mr Buckley notes that Exchequer receipts in 2009 amounted to €24.6 billion less than the expenditure incurred. This was substantially in excess of the deficit of €12.7 billion in 2008.

He said tax returns of €34.8 billion were recorded last year. This was some €8 billion less than the amount collected a year earlier and 29 per cent below the level recorded in 2007.

Exchequer spending increased by 7.5 per cent in this time to €59.4 billion despite the fall in tax receipts, with the amount spent servicing national increasing by 64 per cent in 12 months.

He said the State committed or spent more than €24 billion addressing the banking crisis, which included a €7 billion investment by the by the National Pension reserve fund Bank of Ireland and AIB.

Some €4.2 billion was spent supporting Anglo Irish Bank and taking bringing societies Irish Nationwide and EBS into State ownership.

He says promissory notes of €10.3 billion were issued to Anglo Irish bank, and that a further €2.6 billion and €250 million was issued to Irish Nationwide and EBS respectively.

Mr Buckley notes that the cumulative value of the bank liabilities guaranteed by the State at the end of December 2009 was some €281 billion.

The Comptroller and Auditor General is the constitutional officer with responsibility for auditing public spending and accounts.

The report says the accrued liability – money due but as yet unpaid - for occupational pensions of public servants amounted to €116 billion at the end of last year. It says the National Pension Reserve Fund could be valued at €22.3 billion at the end of 2009.

He says administrative costs incurred by State agencies in relation to banking measures have "substantial" but were small when compared to the risks associated with banking stabilisation measures.

He said access to timely and professional advice was vital but that "it was important to ensure that sound procurement and contracting practices" are followed to ensure expenses being incurred are no more than warranted.

Mr Buckley said a number of administrative matters may merit consideration at this juncture:

• The desirability of improving performance management and pushing ahead with performance frameworks for State bodies

• The need to ensure that rationalisation of State bodies is accompanied by change management plans designed to ensure that amalgamated services are reengineered to achieve process efficiency

• The need to ensure that, where the State uses third parties to deliver programmes, there is an adequate control and inspection process to guarantee the regularity of expenditure and the correctness of the charge to public funds

• The need to improve property management within major property-holding bodies such as the HSE, and to ensure that the Dublin property portfolio of the OPW is consolidated efficiently following decentralisation moves

• The need to use random inspections and audits to better inform risk-based reviews, especially in the work of Revenue and the Departments of Social Protection and Agriculture.

Mr Buckley also notes that under the medical consultants’ contract of employment agreed in 2008 envisaged it was agreed that consultants would pay into a research and study fund any fees for private practice above the level specified in their employment contracts. No such payments have yet been made.