Prudent Estimates, chance missed

Perhaps the three most important principles for any government in framing its spending plans for the year ahead are promoting…

Perhaps the three most important principles for any government in framing its spending plans for the year ahead are promoting stability in the economy, using public money efficiently, and being sensitive to the changing public spending needs.

But - together with the recent announcement of the Government's public transport plan, Transport 21, and the decision to abolish the Groceries Order - yesterday's Estimates are as much a response to a political malaise that afflicted the Government over the summer as they are an exercise in national housekeeping. These Estimates, along with the forthcoming budget, may be the Government's last major intervention in the economy before the next general election.

On the face of it, the Government's plans appear consistent with the principle of economic stability. The projected increase in total spending - 6.6 per cent - is in line with the 6 per cent increase targeted for spending last year. This implies that spending growth next year will broadly match economic growth. So, although rising in euro terms, Government spending should remain stable as a share of the national economy. The single, rather than double, digit increase in spending will help the Government avoid the accusation of a pre-election splurge.

There is many a slip 'twixt cup and lip and it is not yet guaranteed that spending growth will not each double digits next year. Spending plans can change between the publication of the Estimates and budget day by several hundred millions of euro. The next budget is likely to see an upward change caused by the announcement of social welfare benefits. Thereafter added upward pressure may come from the need to reach a new agreement on public sector pay before the current one expire in the middle of next year. But barring major surprises, the Government's intentions in relation to fiscal stability appear prudent.

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In relation to the second principle of good national housekeeping - efficiency - there is less scope for praise. Increases in public sector staff, wages and pensions continue to dominate spending growth. The estimates contain much detail on where it is increasing, but continue to fail to deal with the crucial issue of where savings could be made. Recent events in the public sector suggest that this is a glaring oversight.

The ultimate goal of public spending is to meet the needs of people and not to increase spending for its own sake. Some progress will be made. The Department of Health will receive the largest section of extra spending and service improvements for disability care, improved primary care facilities and new hospital units are among the benefits promised. There will be more resources for education, public transport and social housing, and a welcome improvement in overseas development aid. But in the context of reforming the means of accounting for public spending in terms of meeting public need, the estimates are a missed opportunity to address the needs of a more demanding electorate.