The Department of Finance is to spend 44 per cent more this year than in 1998, the Minister, Mr Charlie McCreevy, has told the Dail select committee on finance and the public service.

The Minister announced that the estimate for the Department of Finance's spending this year amounts to £44.77 million (€56.84 million), an increase of 44 per cent on the amount spent last year. It is also some 26 per cent ahead of the actual provision made in the estimates.

He added that the increase is mostly due to additional funding for administration, the Euro Changeover Board and the new Claims Management Agency.

The bulk of the increase is accounted for by the need to address the Y2K problem in the Department, while £906,000 is needed for the Euro Changeover Board. A provision of £800,000 is also included to meet the expenses of the new Claims Management Agency, which will handle accidental personal injury and property compensation claims against the State.

The Minister also insisted that any new national pay agreement must link pay to performance. He also warned that the Government would like to negotiate a new national programme, though not at any cost.

He added that the 2 per cent local bargaining limit for the public service under Partnership 2000 must be adhered to and said that there will be no central contingency fund to fall back on, as was the case under the PCW.