Vol. 1089 No. 2
1. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if he will publish the efficiency and reform proposals that he requested each Department to provide to him by 17 July 2026; if he will do so at the earliest opportunity possible; and if he will make a statement on the matter. [51702/26]
Will the Minister commit to the publishing of the efficiency and reform proposals he has requested every Department provide to him by 17 July, in full and as soon as possible?
I thank the Deputy. The Government agreed a medium-term fiscal structural plan in December last year. This set out fixed expenditure ceilings for the period to 2030. It provides for significant uplifts in expenditure over the coming years, with gross voted spending to reach €147.3 billion in 2030. As set out, the ceiling for 2027 will increase to €125.5 billion. This is an uplift of €7 billion on the 2026 expenditure ceiling of €118.5 billion. Delivery of this requires enhanced expenditure control and robust oversight mechanisms.
In April, Government agreed that additional funding of €646 million will be provided to the Department of Education and Youth. To accommodate this additional funding, the Government agreed to reprioritise funding from other Votes to deliver on the 2027 ceiling as planned. Other Departments have been asked to deliver a levy through the implementation of efficiencies and reforms, with a total of €446 million from 2027. This should be considered through the lens of an overall uplift of €7 billion for expenditure in 2027. It will not impact the 2026 allocations.
The delivery of reforms and efficiencies supports adherence to the fixed expenditure ceilings set out in the plan. It reflects the need to moderate the rate of expenditure growth across Departments to facilitate the Government’s decision to reprioritise and provide additional investment to education within the agreed overall fiscal framework out to 2030. It is a matter for each Department to determine how the levy will be applied across Vote groups and to identify the efficiencies and reforms required to ensure this. My Department wrote to Secretaries General of other Departments following the Government decision, informing them of the need to identify efficiencies and reforms. These proposals have been requested by 17 July. The proposals will form a key part of engagement in the Estimates process for budget 2027.
Budget 2026 placed a particular emphasis on achieving value for money. The budget strategy was developed using a whole-of-budget approach, which focussed on the totality of expenditure and linked expenditure and investment to improved outcomes. Part II of the expenditure report 2026 sets out details of reforms and efficiencies across Vote groups.
Just for clarity, did the Minister commit to publishing them? Maybe he can come back on that. I genuinely mean that I did not fully understand that.
When the Minister drafted these measures, he was presumably aware the Department of education was not the only one in the red. It turns out the Departments of health, justice and social protection are also on track to overspend by millions of euro. In the case of social protection, the Minister has asked it to make €6 million of cuts - an impossible ask for a Department with a projected €89 million overspend. Similarly, he slashed the health budget by €175 million despite the HSE projecting a €400 million overspend. I do not understand his taking an axe to our public services because of the failure of the last budget, which became clear in the budgetary oversight committee, as well as because the sums did not add up on budget day. Will the Minister commit to publishing them? Will he tell us what he is cutting?
The Deputy is completely misrepresenting what we are doing. I have said efficiencies and reforms will be provided to my Department during the summer. They will inform the Estimates discussions with Departments in the context of a 2027 allocation of over €125 billion. The €7 billion uplift forms the basis of negotiation with Departments, how they identify efficiencies and reforms and how we moderate overall expenditure, with those efficiencies and reforms, across Departments.
The Deputy referenced €6 million for the Department of Social Protection. That is in the context of a budget well in excess of €20 billion - I think it is €27 billion. It is a very minor change in the context of a budget that is likely to grow in 2027. The reason we have applied a levy for 2027 is to give Departments the space to identify efficiencies and reforms, prepare for them and utilise them through the Estimates process before we agree budget 2027. They will form part of their Estimates and allocations for 2027. That is what we have set out in the past and are setting out today. What will be submitted to me will form the basis of the wider discussion as part of budget 2027.
The reason we are in this mess in the first place is the Department of education clearly stated it required additional financing to make ends meet this year. The reality is the Minister's Department did not listen. As a result of that, we are in this mess. My question is will the Minister publish that which he has requested for 17 July. It is only through an FOI request that we discovered he is asking for this by 17 July. We know that is the week the Dáil goes into recess. It seems to me that he is trying to sneak it through during the summer recess, when he knows there is not Dáil scrutiny. Will he commit to listening to each Department when it comes to this budget? We have had an issue whereby in the previous budget the two Ministers did not.
It is efficiencies and reforms in the context of the allocation for 2027.
Yes, but tell us what it is.
We should have greater discussion in here around efficiencies and reforms across all expenditure lines. No Department is immune from driving greater efficiencies and improving productivity, outputs and impacts in the context of a significant increase in public expenditure in recent years. Notwithstanding the levy we have introduced to moderate overall expenditure, there should be greater focus on that in the wider discussions and demands we receive across expenditure allocations. The reason we are doing this is to fit the additionality we have provided to education within the wider fiscal framework. I believe we distributed it fairly. We protected health pay, protected social protection rates and the wider social protection budget, protected justice pay and protected key front-line areas in education itself. There is room for efficiencies across Departments that have grown significantly in recent years.
2. Deputy Cian O'Callaghan asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if his Department carried out a risk assessment in advance of publishing a tender to establish a new framework agreement for the provision of Microsoft solution renewals and associated services; and if he will make a statement on the matter. [51706/26]
The Office of Government Procurement's Microsoft licensing framework expires on 13 September 2026. The estimated value range of the proposed new framework is between €750 million and €1 billion according to a reply the Minister gave me. Has his Department carried out a risk assessment in advance of publishing the tender for this new framework? I ask this at a time when other European countries are moving away from technological dependence on American companies.
The Office of Government Procurement, a division of my Department, acts as a central purchasing body, aggregating the State's purchasing power and establishing framework agreements for a range of commodities, including ICT goods and services. The establishment of a national-level framework is a significant undertaking. OGP framework agreements are established based on public sector bodies' needs and market capabilities and are a key instrument in delivering value for money, promoting SME access to Government contracts as well as incorporating horizontal policy considerations.
Since its establishment in 2014, the OGP has gained significant experience in establishing national-level framework agreements. The OGP takes a diligent and disciplined approach to each and every framework, with frameworks taking up to 12 months to put in place. The OGP is supported in its work by key public sector bodies, subject matter experts and the Office of the Chief State Solicitor, CSSO. In each case, the relevant risks, issues, assumptions and dependencies are carefully considered. All framework agreements commence with a pre-market engagement, which informs the market of the OGP’s intentions as well as informing the OGP of the market’s capabilities and developments. Following publication of the tender, the OGP typically receives feedback from interested parties relating to the design of the competition. Such feedback is dealt with on a case-by-case basis, including assessing the potential impact to the tender.
In respect of preparing the tender for the framework for the renewal of Microsoft licences, solutions and associated services, the OGP adhered to its standard, detailed and disciplined approach over an eight-month period, including engaging with the market through a structured, extensive and comprehensive pre-market consultation process, which seeks the market’s view with defining the scope, structure and content of the tender.
I thank the Minister of State for the answer. Have alternatives to Microsoft actually been looked at as part of the process? That is what I am asking about it. There are a number of alternatives out there that other European countries and states are moving towards. They are doing so for value-for-money reasons and so they are no longer technologically dependent on the US but can rely on European-regulated services and products. There is LibreOffice, Collabora Online, Open-Xchange, Nextcloud, Thunderbird and openDesk by Germany's Zentrum für Digitale Souveränität der Öffentlichen Verwaltung, ZenDiS, which is a readily assembled government-grade suite. Have any of these been looked at? Are alternatives being examined? They are going for alternatives in other European countries, not just so they are no longer beholden to Trump and what he does - he does not just interfere in terms of red cards but in other areas as well - but also because it is better value for money. They are achieving actual reductions in the cost. Are alternatives being looked at and if so, what alternatives? If not, why has that not been part of the process?
We are reviewing the operation of the existing framework and obtaining relevant input from subject matter experts across the public service to improve the scope, specification and features. We are obtaining relevant market-specific commercial advice from IT market analysts and industry experts, and also obtaining legal advice from the CSSO. As part of the OGP’s governance process, we are conducting a review of the relevant risks, issues, assumptions and dependencies before final approval to publish.
The framework is only for the renewal of Microsoft licences. The prerequisite is that public service bodies using the framework must have already procured a Microsoft agreement appropriate to the licences being renewed. Again, interested parties are entitled to query any element of the procurement competition and such queries can arise through a number of channels, including clarification requests, direct correspondence or through the tender advisory service. The OGP considers each case on its own merits and decides on a course of action. In relation to this tender, matters of concern were raised by an interested party. Having carefully considered those matters, the OGP determined it was prudent to cancel the competition and notify the market accordingly.
What I do not understand is why alternatives to Microsoft have not been at least explored as part of this process. The German state of Schleswig-Holstein recently moved 30,000 staff from Microsoft to LibreOffice, Linux, Thunderbird and Open-Xchange. It is saving more than €15 million a year. The senior Minister has just told us we should always be looking for efficiencies and reforms and I agree. Why have they not been looked for in this process? The French police, the Gendarmerie nationale, switched over 100,000 desktops to Linux. They will save roughly €500 million, half a billion, over 15 years. Are these not the efficiencies and reforms that should at least be considered by the Government? The German Federal Chancellery moved to openDesk purely to enhance its digital sovereignty. The Irish Government is leading the Council of the European Union at the moment. We are looking for more European sovereignty, for example with the digital euro, so why are these things not being considered? I am not saying they should be moved en masse overnight but surely the alternatives should be explored in terms of value for money and whether there are better options out there.
The current framework expires in September 2027. Until then, public service bodies can continue to procure renewals of their Microsoft licences in line with the rules governing the existing framework agreement. The OGP's objective is to ensure that it can aggregate the State's expenditure, delivering value for money in all the expenditure categories that it manages. The OGP also remains committed to ensuring that public service bodies have access to a compliant and effective procurement mechanism for Microsoft solution renewals and associated licensing services. All the feedback received has been assessed by the OGP and the intention is to publish a new tender as early as is feasible.
There are millions here that the Government could save.
3. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to give an update on the progress of a new public sector pay agreement; and if he will make a statement on the matter. [51703/26]
The Government’s approach to public service pay over many years has been to engage through an established framework of collective bargaining with public service unions and associations. This is a tried and tested approach that has supported sustainable improvements in pay for public servants and orderly management of the public finances, while also facilitating public service reform and changes to work practices.
Before expiring at the end of June 2026, the Public Service Agreement 2024-2026 delivered headline pay increases of 9.25% and provided for up to 1% of basic pay costs for local bargaining. Importantly, like previous agreements, the public service agreement was weighted towards the lowest paid, who received increases of 17.3% inclusive of local bargaining. The final increase under the agreement was on 1 June 2026. The Government is committed to continuing to be a good employer and to providing competitive terms and conditions for public servants. This commitment is reflected in the significant investment made in public services in recent years. Since 2020, the public service pay bill has increased by €12 billion, reaching €34 billion in 2026, an increase of 55%. As well as providing for increases in pay rates, this investment has supported substantial growth in the public service workforce, with employment now exceeding 420,000, an increase of more than 70,000 employees since 2020.
Against this backdrop, and in advance of the agreement's expiry, my officials met with public service unions and staff representative associations to initiate exploratory discussions on a successor agreement. Officials remain available to continue engagement, with Government seeking to progress talks as quickly as possible through constructive dialogue. As the Deputy will appreciate, it would not be appropriate to comment on the detail of discussions, which should remain confidential to the parties. They take place against an increasingly uncertain environment. Suffice it to say, therefore, that in an increasingly uncertain economic environment, a new public service pay agreement can play an important role in providing certainty and stability for public servants while supporting the effective delivery of public services. That is why I believe every effort should be made over the period ahead to engage and try to reach agreement.
As is always the case, any agreement will have to be balanced, affordable and capable of being accommodated in the context of other expenditure priorities within the fiscal framework.
I completely agree with the Minister that this comes through dialogue. I am not expecting to have any information from inside the room coming to the outside. The question really relates to the fact that the previous public sector pay agreement ended last Tuesday without any deal to replace it. Of course, there will be public sector workers who are concerned about that. The Minister mentioned stability. That is what people will need and want. We know that we are in a cost-of-living crisis. We also know that the Central Bank is saying that real wages are going to fall by the end of the year.
These are the people who look after us in our hospitals; they are nurses, doctors, those who drive buses and trains and so on. These are people who keep the economy ticking over. Does the Minister expect to continue with this work?
I fully share the Deputy's reflection on public servants and the huge role they play in our hospitals, schools and members of An Garda Síochána keeping people safe. That is why we want to a new agreement. As with previous agreements, we want to make sure that it is fair, equitable and ensures a fair deal for workers and rewards them for the work that they do every day on behalf of all of us. There have been exploratory discussions. We want further engagement. My officials remain open to progressing those discussions. We want to ensure that can happen without preconditions. We also want to ensure that any talks can progress and that we can try to reach an agreement that we can accommodate in the context of budget 2027. Having stability, certainty and a planned approach to public service delivery and public service pay has been important in terms of our wider management of the economy. I want to make it clear to any public servant who is watching this that we want to see a new deal and we want to progress those discussions.
I am not sure how many are looking in at 9.30 p.m. because there may be a World Cup match on, but for those who are watching these proceedings and who take an interest in this very important matter, the reality is that they will look back and see that the first thing Government Members voted on in the lifetime of this Dáil was a bumper pay rise for themselves and for Cabinet Ministers at a time when they, the people to whom I refer, are struggling to make ends meet and when the cost of everything, including housing, is increasing. I am sure that every week Deputies deal with people who simply cannot make ends meet, whether they be public sector workers or other workers, because of political decisions that were made in this Chamber and that have resulted in, for example, rents increasing and supports in terms of energy costs being removed. I urge the Minister to do everything in his power to reach a fair deal.
As with previous agreements, our intention is to ensure that we arrive at one that is affordable and planned and delivers fair pay for public servants. I am absolutely clear about that. I want to see discussions recommence. Exploratory discussions have taken place on two occasions. My officials remain open to engaging.
On the issue of the wider workforce and the economy, we want to ensure that we bring forward a tax package in the budget that will support workers and that will reward work in the context of competitiveness and income tax. That is something that we advance, as well other critical priorities around housing and infrastructure delivery and everything else to which the Deputy referred in the context of the cost of living. The trade unions are balloting their members, which is an unnecessary escalation. We need to see engagement happen. Officials on the Government side are ready and willing to engage.
4. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to provide an update on the national procurement strategy, which was due to be published earlier this year; and if he will make a statement on the matter. [51494/26]
Will the Minister provide an update on the national procurement strategy, which, as I understood it, was to be published earlier this year? I brought forward legislation in relation to procurement and was told that we had to take a wait-and-see approach on foot of the work that was happening in respect of procurement.
The forthcoming national public procurement strategy will set the strategic direction for public procurement in Ireland for the next five years. The strategy will for the first time establish a shared vision, values and objectives for the public procurement system, providing a common framework for the procurement of goods, services and works across the public sector. Given the scale and ambition of the strategy, it was important that sufficient time was taken to ensure that its development and implementation are informed by stakeholder engagement, evidence-based policymaking and practical delivery considerations. We have been engaging with our officials to finalise the strategy and ensure that the necessary preparatory work is undertaken and that the foundations are laid for its successful implementation.
A number of initiatives aligned with the strategy's vision, values and objectives are already being progressed across the public procurement system, including measures to support sustainable procurement, SME participation, transparency and simplification. In parallel, significant preparatory work has been undertaken to establish the governance, capability and stakeholder engagement arrangements necessary to support its successful implementation across the public sector. Among the recent initiatives introduced are a new series of webinars to deliver procurement essentials to SMEs, representation from the social enterprise sector joining the SME advisory group and journey-mapping exercises with public buyers and suppliers to identify opportunities for simplification and practical co-design solutions.
Taken together, the extensive consultation process, the preparatory work undertaken to date and the initiatives already under way will provide a strong foundation for the effective implementation of the strategy across the public sector. I expect to bring the strategy to Government in the coming weeks.
The issue that I have is that this time last year, I brought forward legislation specifically around procurement. We know that billions of euro are spent on procurement every year. We know that if this money is spent in a way that will benefit society, it can have a massive social, environmental and, indeed, economic impact. To be honest, the Government is moving far too slowly when it comes to tackling this issue. This is something that can have an economic benefit. The Minister of State and I are both from the west of Ireland. The impact that good use of procurement, tendering and contracts can have on small communities is massive. Is consideration being given to how the strategy can be used in smaller geographical areas that may not have the economic strength that other areas have in order to ensure that those areas can withstand economic shocks?
I share the Deputy's view. The strategy has not been delayed. As I stated previously, this will be Ireland's first overarching strategy for public procurement. It will set the direction of travel to 2030 to support delivering the Government's commitments. Given the scale and ambition of the strategy, it is important that it is informed by extensive stakeholder engagement, a robust evidence base and careful consideration of implementation arrangements. It is important to note that significant work has already been undertaken in this regard. We are engaging closely with my officials to finalise the strategy and to ensure that the conditions for its successful implementation are in the place.
The Deputy referred to SMEs and local communities. She is absolutely right. This will help SMEs, but, more importantly, it will also help small family businesses and local communities. The strategy will take into consideration many of the matters she mentioned.
I am probably one of the people who is most looking forward, apart from the Minister of State, obviously, to reading the strategy. I hope that it will look two things. First, the economic impact we can have with the money that is spent. That impact can be huge, economically, socially and environmentally. There is a massive impact we can have, particularly if we look at what has happened in places like Preston, for example, and how measures there have worked.
The strategy also needs to look at cost overruns and at how public money is wasted. The legislation I brought forward this time last year, in respect of which the Government kicked the can down the road, suggested that information should be provided in an annual report by the Minister to show the type of procurement procedure used by public bodies, the use and type of social clauses in contracts, details on contracts awarded to SMEs and a scoring of the performance of contractors in the context of whether they go over time and over budget. Will the Minister of State commit to looking at that?
I am very mindful of how time-poor small businesses are. We want to put them at the centre of the strategy from its inception. The idea for the strategy derived from a programme for Government commitment to review the public procurement process and make it much more transparent.
We are trying to support SMEs in identifying and pursuing public procurement opportunities.
In most businesses - and I was part of a business myself - you would work all hours of the day and would you want to step in a back office and go through these applications? We also are trying to work with mentors who will help small businesses with their applications. The strategy is trying to redefine value for money but include longer-term social value for Irish taxpayers. A pillar of that strategy will focus on procuring for the future and we want to embed social and environmental innovation, as well as local social resilience, into the current public procurement strategy.
