There will be no new money for big spending by Government departments in the current Estimates round.

In a memo brought to Cabinet by the Taoiseach, Mr Ahern, this week, all departments were told plans would have to proceed on a "no policy change" basis. The only current exceptions are health, roads and social welfare, with a small exception possible for education.

The size of the increases in these departments has not yet been agreed and the Minister for Finance, Mr McCreevy, will be meeting other ministers for bilateral discussions in two weeks' time.

The final Estimates volume will then be published in mid-November. Despite the new strictures, large increases in public spending can still be expected - with pay rises from the PPF in the pipeline as well as possible increases from the benchmarking review process.

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