Coronavirus: Government departments running out of money

Dáil to be asked to rush through potentially billions of euro in additional funding

Minister for Finance Paschal Donohoe said he expected that the Department of the Taoiseach would reach its limit in September. Photograph: The Irish Times

A number of Government departments are due to run out of money in the coming weeks because of significant financial demands in light of the Covid-19 pandemic.

The Department of Business is due to reach its spending limit next month following increased spending on additional coronavirus measures. The Department of Health will exceed its budget in August and the Department of Taoiseach is also likely to reach its spending limit in the summer.

The Government will again seek to have the Dáil rush through authorisation for potentially billions of euro in additional funding for these departments after a similar vote was needed last month for the Department of Social Protection.

Extra funding of €6.8 billion was needed for the department in order to continue funding welfare payments.

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In correspondence to Fianna Fáil TD Michael McGrath, Minister for Finance Paschal Donohoe said that in relation to the Department of Business “based on current projections in relation to the drawdown of these additional resources there is a risk that this limit will be reached early in July”.

Additional costs

He added it would be expected that the Department of the Taoiseach would reach its limit in September but his department has been advised that there “are additional costs arising from the role of that department in co-ordinating work on the Covid-19 crisis, that may accelerate the date . . .”

The State laboratory will also exceed its budget of €7.8 million in September, as will the secret service.

Spending in the Department of Health was more than €8 billion by May and is expected to reach €13.6 billion by August.

It comes as a new analysis from the Dáil’s parliamentary budgetary office has found that overall Government spending is €4.27 billion above pre-pandemic expectations so far this year.

The analysis pointed out that “exchequer spending on the public health and social protection aspects of this crisis, and falling tax revenues, has led to an exchequer deficit at the end of May of €6.1 billion, almost 100 times the size of the deficit at the same stage in 2019. The full extent and cost of State-funded interventions relating to the pandemic are not yet clear.”

Scrutiny

The report also found that the overspends in the Department of Health “are almost entirely related to the response to the pandemic and are concentrated in the HSE current spending allocation”.

It also criticised a “regrettable” availability of data in relation to spending in the department.

“At a time when Health is a priority for the delivery of public services and additional spending is being proposed, the lack of data to facilitate scrutiny of that spending is regrettable.”

In terms of the extra funding approved for the Department of Social Protection, the report said while the department now has “sufficient funding for the immediate future”, a “supplementary estimate will probably be required in the autumn”.

About €2.2 billion has been set aside to fund the Government’s weekly pandemic payment.

“Additional spending on public services promotes public wellbeing but only when that money is spent efficiently and effectively. It is of paramount importance then that the outputs produced by the money spent on public services are measured appropriately and presented in a transparent manner.”

Jennifer Bray

Jennifer Bray

Jennifer Bray is a Political Correspondent with The Irish Times