Five Departments have yet to agree spending limits

Health, Social Protection, Foreign Affairs, Justice and Education in talks with Howlin

Ministers in the other five departments – Health, Justice, Education, Social Protection and Foreign Affairs – are continuing bilateral discussions with Minister for Public Expenditure Brendan Howlin. Photograph: Gareth Chaney Collins

Ministers in the other five departments – Health, Justice, Education, Social Protection and Foreign Affairs – are continuing bilateral discussions with Minister for Public Expenditure Brendan Howlin. Photograph: Gareth Chaney Collins

 

Five Government departments have yet to agree their spending limits for next year with one week left to the budget.

According to reliable sources, 10 departments have settled their budgetary arrangements for next year with the Department of Public Expenditure.

Ministers in the other five departments – Health, Justice, Education, Social Protection and Foreign Affairs – are continuing bilateral discussions with Minister for Public Expenditure Brendan Howlin and his officials.

The budget will dominate the agenda of this morning’s Cabinet meeting with at least one other meeting of Ministers expected before the weekend to finalise matters.

The most intensive talks have been taking place between the Department of Public Expenditure and the Department of Health.

That department will require a supplementary budget for this year. It is also seeking extra funding for next year due to increased demands posed by demographic trends (an ageing population) as well as to meet new commitments, including extending free GP care to children aged six and under and to over-70s.

The pressure on the Department of Social Protection is lower this year because of the fall in the number of people who are unemployed.

However, several commitments made by Tánaiste Joan Burton, including a household benefit package for pensioners costing €40 million and a return-to-work supplement with a cost to the exchequer of €20 million, may place her department under pressure in its efforts not to impose new cuts.

Tax initiatives

It is understood that a working suggestion at the moment is that a package may be offered comprising both changes in tax bands and small reductions in income tax for middle earners.

The EMC is not expected to sign off on its deliberations until later in the week.

Mr Howlin has briefed Cabinet colleagues twice over the past three Cabinet meetings on progress in his discussions with each department and he is expected to do the same today.

Later today Taoiseach Enda Kenny, Ms Burton and Minister of State with responsibility for employment activation Kevin Humphreys will launch a new Pathways to Work programme, which focuses on the long-term unemployed.

Mr Humphreys is expected to announce significant changes to the housing assistance payment, designed to encourage people to take up work without being left in a situation where they cannot afford rent. The loss of such welfare payments acted as a disincentive to work.

It is also expected that some additional budgetary funding will be secured to target young people who are unemployed.

The number fell by over 11,400 to 52,600 in the second quarter of 2014 but it still represents a big cohort of unemployed people.

A significant expansion of the Jobs Plus initiative, which has been successful at taking long-term unemployed people off the dole, has been agreed.

Mr Humphreys said it was quite heartening that 60 per cent of people who went back to work through Jobs Plus were unemployed for over two years.

“The priority now is to get the maximum number of young people into work,” he said.

Today the left-leaning think tank Tasc will present its analysis on what should be prioritised in the budget. It will say the argument that Ireland is a high-tax country does not ring true.

Sinn Féin is also expected to launch its pre-budget submission today.

Ahead of the launch, Fine Gael Minister of State Simon Harris claimed it had presented essentially the same submission for three years running, none of which took into account the need for additional cuts each year.