The Government this week agreed to an extra €646 million for the Department of Education, after it emerged that the department was facing a major deficit this year.
Minister for Education Hildegarde Naughton had previously confirmed that her department was facing a deficit “north” of €500 million.
Amid internal Government tensions about the financial shortfall, the minister had insisted that extra money was needed to pay for the State’s education system.
It is now understood that the figure agreed by the Government for the Department of Education is €646 million and that this will be spent on payroll and pensions, school transport, special education and special needs assistants.
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All departments will be required to contribute towards the €446 million required for the Department of Education, with €200 million being covered from a contingency fund.
The €446 million is expected to come out of the budgets of other departments for next year.
The Department of Public Expenditure, which oversees spending across Government departments, believes the long lead-in time will allow departments identify savings to offset any impact from covering the Department of Education deficit.
There will be carveouts to protect key areas from funding cuts, like homelessness and frontline pay.
The levy being applied to other departments is a new model that the Government will use again should another deficit arise, meaning any department that doesn’t manage its budget will have to be bailed out by other departments.
Naughton had said the underfunding of her department was clear after she took up the role following a mini-reshuffle of Fine Gael ministers last November.
[ Department of Education faces €500m deficit amid funding rowOpens in new window ]
Minister for Public Expenditure Jack Chambers had warned that other Government departments could see their funding cut to make up the deficit.
Speaking earlier this month, Chambers had said that there was a “challenge” in the Department of Education’s budget.
He said this was only partially due to new demand, but that expenditure pressures in one department would have implications in others.
“It will limit the level of what’s available for other Government departments” if more money was allocated to education, he said.
He added there had been a 10 per cent increase in funding for the area this year.
Government sources have said the current projected overspend in education is estimated at between €600 million and €700 million this year.
In previous years, overspending was addressed, in education and elsewhere, by the allocation of extra money outside of the budgetary cycle, known as a supplementary estimate.
However, the current Government has decided to abolish this practice and stick to its agreed spending plans, which has contributed to the impasse between the Department of Public Expenditure and their counterparts in the Department of Education.
