Other Government departments will be asked to bail out the Department of Education, which is facing another large budget overspend this year.
The projected overspend in the Department of Education will lead to other Ministers being asked to contribute to the cost from their own spending allocations, The Irish Times has learned.
The current projected overspend in the Department of Education is estimated at €600 million to €700 million this year. In previous years, the cost of overspending was met by supplementary estimates later in the year, which contributed to steep growth in unplanned spending.
But because the Government has decided to abolish this practice and stick to its agreed spending plans, the cost of the education overspend will have to be met from reducing planned spending increases elsewhere in Government – a development likely to infuriate other Ministers.
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In a letter sent to all his Cabinet colleagues last month, Minister for Public Expenditure Jack Chambers said that if departments exceeded their budgetary allocations, they would in the first instance be required to cancel some of their planned spending. After that, further expenditure controls, including employment control frameworks, would be considered.
It added: “If necessary, overspending by any Department may result in the need to levy all other Government Departments in order to remain within the 2026 expenditure ceilings.”
It is understood that plans are now being drawn up to levy other Government departments – effectively reducing the planned increases in their budgets – in order to pay for the overspend in Minister for Education Hildegarde Naughton’s department.
It is understood that Chambers, Taoiseach Micheál Martin, and Tánaiste Simon Harris discussed the issue at length at the pre-Cabinet leaders’ meeting last Monday.
At Tuesday’s Cabinet meeting, Chambers told Ministers that emerging risks in the Department of Education meant that there would be consequences across Government, though no specific demands have yet been made.
Overruns on spending plans set down in annual budgets have become commonplace and have been identified by the Fiscal Advisory Council (Ifac), the budget watchdog, as a key problem in the Irish public finances. Last year the Department of Education required an additional €580 million; the year before that it was €1.09 billion.
Overall spending came in €5 billion ahead of budget in 2024, the election year, and €4 billion ahead last year. While consistent overruns have been paid for by surging corporate taxes, Ifac has warned that they have left Ireland increasingly reliant on this potentially volatile source of revenue.
The Government promised to introduce tighter controls when it introduced a new medium-term plan last December, promising to keep spending growth to 6 per cent over the next four years.
Budget Ministers Simon Harris and Jack Chambers committed to sticking to these targets and Chambers said departments that overran would have the excess spending subtracted from their budget the following year.
A spokeswoman for the Department of Education confirmed that officials had been in talks with the Department of Public Expenditure in recent weeks “to address the ongoing funding requirements on a more sustainable basis”. She said that “good progress” had been achieved.
[ Government spending last year was €4bn higher than planned, Ifac warnsOpens in new window ]
“Education is a constitutional and statutory right, and the Government is committed to meeting students’ needs, including meeting increasing special educational needs and providing extra supports for students at risk of educational disadvantage,” the department said.
The spokeswoman added that the Minister is “determined to ensure that the school system is properly funded”.
“Ireland delivers world class results and has built a reputation that is the envy of other countries. The department has highly robust financial and administrative control measures in place to ensure accountability for the money allocated to it,” the department said.
