Health and education will get major increases in funding next year, as the Government targets these key areas in advance of a general election. The Departments will be given an extra €1.2 billion to spend compared to this year, the Estimates, which will be published today, will show.
There will also be substantial increases in capital spending which includes major road and other infrastructure projects. In contrast, many Departments will have their spending cut, as the Government moves to offset the economic downturn by tightening budgets.
The Estimates will see the health services allocated a 15 per cent rise, or around €800 million, while education will receive around €400 million, an 11 per cent increase over this year.
The increase in capital spending will not entail any new projects. Last year a rise of 13 per cent to €6.9 billion had been earmarked for 2002.
The Opposition and many commentators have warned of the dangers of further slowing capital expenditure which they argue is vital if the economy is to benefit when global economic activity picks up. The National Development Plan is already behind schedule.
The Department of Health has secured increases of around 30 per cent for capital spending on hospitals and other infrastructure, while spending on roads and transport will increase by 16 per cent.
However, there is no additional money for work on school buildings, despite intense pressure from Government backbenchers. Department sources insist there will be no freeze on building projects involving more than 800 schools in 2002.
They say the Minister for Finance, Mr McCreevy, will give details of all capital projects in education in the Budget.
The huge boost for the health services bringing total spending to more than €6 billion and education with spending of more than €4 billion means that others will suffer real cutbacks as Mr McCreevy holds average expenditure to 8 per cent.
Social welfare will also receive more funding than many other Departments.
These three Departments account for around two-thirds of all day-to-day spending by the Government and could mean the average for other Departments could be as little as 2 per cent. Some Departments are even expected to see reductions in their budgets.
By holding spending tight the Minister may be able to avoid having to target a deficit today. However, it is unlikely he will be able to avoid borrowing after he has announced further tax and spending measures.