This presentation was made by Padraic REIDY, Department Public Expenditures and reform, Ireland, at the 15th Annual Meeting of OECD-CESEE Senior Budget Officials held in Minsk, Belarus, on 4-5 July 2019

1. Spending Reviews in Ireland –
Practical Considerations
Pádraic Reidy
4 July 2019

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2 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Irish Spending Reviews – Background
• Ireland aligns with European-wide adoption of spending review following the Global Financial
Crisis.
• For initial spending reviews, spending cuts were required, more recently spending reviews have
been used to promote spending efficiency and effectiveness in the context of fiscal space.
• In total, there have been four spending reviews since 2009:
1. The Special Group Report 2009;
2. The Comprehensive Review of Expenditure (CRE) 2012-2014;
3. The Comprehensive Review of Expenditure (CRE) 2015-2017; and
4. The Spending Review 2017-2019.

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3 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Economic context matters
• Previous reviews focussed on deficit reduction, cutting expenditure to meet fiscal targets.
• Latter reviews now focus on re-prioritisation within increasing spending base.
• Focus in ‘normal’ economic environment should be on assessing the ‘totality of spending’ and not just the additional
incremental amounts each year, the hidden fiscal space.
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10%
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018(f) 2019(f)
General Government Expenditure as a % of GNI* General Government Revenue as a % of GNI*
Special Group Report
2009
CRE 2012-2014 CRE 2015-2017
Spending Review 2017-
2019

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4 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Special Group Report 2009 – Context
• Beginning in 2009, spending reviews were carried out to reduce government expenditure, meet
fiscal targets and promote stability in expenditure policy.
• Post-GFC, Irish economy rapidly shrank and large fiscal deficit became apparent
• Nominal GDP fell by 4.8% in 2008 and 9.5% in 2009.
• Surplus of 3% of GDP in 2006 turned to underlying deficit of 11% of GDP in 2009 and 2010.
• Unemployment rose from 4.6% in 2007 to 12% in 2009 (peaked at 15% in early-2012).
• Special Group Report set Irish precedent for intensive reviews which targeted large-scale savings
to meet fiscal targets.

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5 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Special Group Report 2009 – Conduct
• Special Group was comprised of external experts and a MoF secretariat with Colm McCarthy, University College Dublin’s
School of Economics, as chair.
• The review exposed a lack of data and a base of incomplete information. Despite this, Special Group Report was
comprehensive in nature, i.e. topics were not decided in advance.
• Ex-ante estimates for the review were savings guidelines - €3 billion reduction in current spending and €1.75 billion in capital.
• More centralised, formal and adversarial than subsequent spending reviews.
• Government departments were tasked with drafting their own reviews, set against comparator MoF evaluations of relevant
ministries. Each were presented to the Special Group.
• The Special Group would subsequently produce its own paper, detailing potential efficiencies and savings to be made in
respect of relevant ministerial vote groups.

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6 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
2009 Special Group Report – Outcomes
• Consideration was given to private outsourcing, streamlining, merging agencies and
Departments to save money on service delivery.
• Special Group Report was strategic – proposing cuts to ongoing expenditure, significant
reductions in staff numbers as well as increased efficiency of existing services.
• The Special Group proposed savings options of €5.3 billion, emphasising that such options did
not represent the entirety of available policy options.
• Of the Special Group Report’s 271 savings recommendations across all departments, 42 were
implemented in full and 103 in part.
• The estimated expenditure savings of these implementations amounted to €1.7 billion.

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7 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Comprehensive Reviews of Expenditure
(CRE)
• Major consolidation post-2009 facilitated the establishment of the CRE.
• This follow-up to the Special Group Report established the current Irish standard of ongoing
spending reviews.
• Two CREs, 2012 to 2014 and 2015 to 2017, further integrated spending reviews into the
reformed budgetary framework.
• While assisting Ireland to achieve fiscal targets, the CREs promoted enhanced efficiency
and effectiveness of expenditure rather than focussing solely on expenditure cuts and
numbers reductions.
• CREs also served to build a significant base of spending data/analysis for future reference,
and to promote a culture of evaluation within spending departments.

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8 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Role of the Irish Government Economic and
Evaluation Service (IGEES)
• One of the key changes to the spending reviews conducted more recently has been the
establishment of the Irish Government Economic and Evaluation Service (IGEES).
• In place since 2012, IGEES has been integrated into the spending review process with
IGEES economists and analysts involved in topic selection, producing reports and
presenting analysis internally and externally.
• Initially centralised in the Department of Public Expenditure and Reform (est. 2011), IGEES
units are now integrated into all policy departments and provide economic services,
including producing and reviewing business cases, undertaking policy analysis, spending
review papers and other evaluations.

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9 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Spending review in a ‘normal’ economic
environment
Comparison of Key Indicators, Crisis and Post Crisis
Average
2009-2011
2018
Gross Voted Government Expenditure Growth (%) -2.7% 7.5%
General Government Balance as a % of GDP -20% -0.1%
General Government Debt as a % of GDP 86% 64%
General Government Debt as a % of GNI Modified 113% 105%
Numbers in Employment (000s) 1,919 2,281
Unemployment Rate (%) 15.0% 5.6%
Nominal GDP Growth Rate (%) -2.9% 8.3%
Nominal GNI Modified Growth Rate (%) -5.0% 6.1%

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10 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Objectives of the Spending Review 2017-2019
• Create a larger stock of relevant analysis and evaluation across all Departments and
Offices, and maintain momentum over a three year period.
• Assess efficiency and effectiveness of expenditure programmes and identify areas of
expenditure that require ongoing analysis if issues are emerging.
• Provide the evidence base for reform efforts across Departments and the wider public
service.
• Spotlight areas of innovation and good practice, both in programme design and service
delivery, that will be of wider interest and applicability.
• Ensure that the spending review is more firmly embedded within the budgetary process.

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11 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Characteristics of Spending Review 2017-
2019
• 3 year cycle supported and signed off at Ministerial Level and agreed by Government.
• Process is managed by a senior level steering group in DPER.
• SR 17-19 aims to cover a third of expenditure each year.
• All papers are published with a disclaimer – they are staff papers and do not necessarily
represent the views of the Minister.
• Papers are strategically aligned with the Budget process, published in July each year
ahead of Budget negotiation in September and October.

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12 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Role of DPER
• Vote Section role:
• Sign off on selection of topics by end-January;
• Liaise with policy Departments in developing evidence base, providing data and
producing papers;
• Liaise with Central IGEES in DPER for internal consultancy;
• Options produced by both Departments and Votes based on evidence; and
• Report to Steering Group, made up of DPER and external officials, through
evidence gathering phase and final drafting phase.
• DPER central secretariat to do day-to-day running of the review process (made up of
IGEES staff).
• IGEES support through internal consultancy and providing skillsets within votes.

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13 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Role of Policy Departments
• Engage in the process.
• Collaborative approach but not one-size-fits-all.
• Enhanced role for Finance Officers and departmental IGEES units.
• Sharing of data / information.
• Existing and planned analysis by Departments will also play a key role.

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14 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
List of Published Spending Review 2017 Papers
SpendingReviewPapers:JulyPublication
1.AnAssessmentoftheRationale, EfficiencyandTargeting of
SupportsinEnterpriseIreland
2.ClimateChangeRelatedResearchandFundinginIreland,2010 –
2015
3.AnalysisofCurrentExpenditureonHousing Supports
4.TheCentralVotes:Spending TrendsandKeyDrivers
5.AnalysisofFurtherEducation &Training Expenditureby
EducationTraining Boards
6.SpecialEducationalNeedsProvision
7.FurtherEducation andTraining &EmploymentSupports
OverviewPaper
8.ASelectionofIGEESOutput
9.EnvironmentFund
10.DefenceExpenditure
11.PublicServiceObligation (PSO)Funding forPublicTransport
12.ChallengestoInvestmentinPolicing:APublicExpenditure
Perspective
13.ReviewofSocialProtectionEmploymentSupports
14.AcuteHospitalExpenditureReview
15.FutureSustainabilityofPharmaceuticalExpenditure
16.EvaluatingFurtherEducationandTrainingExpenditure:
Strategic PilotInitiativeReport(SOLAS)
17.ReviewofCapitalExpenditureonResearch,Developmentand
Innovation(2000–2016)(DepartmentofJobs,Enterpriseand
Innovation)
18.CourtsServiceReform(CourtsService)
19.OverviewExpenditureTrendspiecealsotobepublished–
TrackingTrendsinPublicSpending 2017
PublishedwiththeBudget:
20.TargetedAgriculturalModernisationSchemesII
21.DisabilityCostDrivers
22.Disability–SupportsandServices(Cross-Votepaper)
23.EqualityBudgeting (frameworkpaper)

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15 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
List of Published Spending Review 2018 Papers
SpendingReviewPapers:JulyPublication
1.EfficiencyandDigitalisationwithintheOfficeoftheRevenue
Commissioners
2.ManagementofExchequerPayBill
3.HSEStaffTrendAnalysis, 2014-2017
4.Policing Civilianisation inIreland: LessonsfromInternational
Practice
5.ReviewofOvertimeExpenditureinAnGardaSíochána
6.PayExpenditure DriversatPrimaryandSecondLevel
7.Understanding thefunding needsofthethirdlevelsector
8.AnAnalysisofOlderPeopleServicesSpendandActivity, 2014-2017
9.PensionBillProjectionsforthePublicService:CashflowAnalysis
10.ReviewofCriminalLegalAid(DJE)
11.SupportsforPersonsonLowIncome
12.PublicEmploymentServices-Mapping Activation
13.AnAnalysisofReplacementRates
14.AnalysisofIDAIrelandExpenditure
15.AnalysisofEnterpriseSupportsandtheLabourMarket
16.AnAssessmentofDirectSupportsforStart-upsand
Entrepreneurship(DBEI)
17.SportsCapitalProgramme(DTTaS)
18.AnalysisofPSOExpenditureonPublicTransport
19.Assessing theSplitBetweenCurrentandCapitalExpenditureon
SocialHousing Delivery
20.AnalysisofOPWSpending onStateRents
21.SubsidisedFerryServicestotheOffshoreIslands(DCHG)
22.ReviewofRecentEvaluationsbyDTTaS(DTTaS)
23.ImplementationofrecommendationsmadeaspartoftheVFM
andPolicyReviewundertakeninregardtotheArtsCouncil(DCHG)
24.ComparativeLevelsandEfficiencyofPublicSpending
25.AnalysisofHospitalInputsandOutputs,2014-2017
26.Nursing andMidwiferyExpenditure
27.TrendsinPublicExpenditure
PublishedwiththeBudget:
28.ProjectedRetirementsFromtheCivilServicefrom2019to2028
29.DefenceForcesPensionsExpenditure(DPERandD/Defence)
30.AgricultureCashFlowLoanSupportScheme(DAFM)

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16 An Roinn Caiteachais Phoiblí agus Athchóirithe | Department of Public Expenditure and Reform
Practical Considerations
• Economic and fiscal context influences the nature of the review process.
• Political engagement is key to success.
• Integrating the review process into budget cycle provides an audience for the
analysis, aids in topic selection and raises the profile of the process more
generally.
• Early and continued engagement with Departments (including with regard to
governance) normalises the process and drives culture change around the
need for evaluation.