The Government agreed a Medium Term Fiscal Structural Plan in December last year. This set out 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. Delivery of the Medium Term Fiscal Structural Plan over the medium-term horizon will require enhanced expenditure control, avoidance of in-year decisions with carryover costs for subsequent years and robust oversight mechanisms.
In April, Government agreed that additional funding of €646 million will be provided to the Department of Education and Youth in 2026. It was further agreed that €446 million of this additional funding will be provided by way of a levy from 2027, calculated on the current expenditure REV 2026 allocations of Votes other than the Department of Education and Youth.
As set out in the MTFP the ceiling for 2027 will increase to €125.5 billion. This is an uplift of €7 billion over the 2026 expenditure ceiling. The levy supports adherence to the fixed expenditure ceilings set out in the Plan. It reflects the need to moderate the rate of expenditure growth across other Departments to facilitate Government’s decision to reprioritise and provide additional investment to the Education sector within the agreed overall fiscal framework out to 2030.
The distribution of the levy across Departments has been designed to protect certain areas including:
• Social Protection Vote Group non-pay allocation;
• Department of Health pay allocation;
• Specialist Disability Services subhead in the Department of Children, Disability and Equality;
• Justice, Home Affairs and Migration Group pay;
• Housing, Local Government and Heritage Group non-pay and
• Pension funding across Votes.
The total amount of the levy to apply to the Public Expenditure Vote Group is €10 million or 0.6% of the total current allocation. My Department wrote to Secretaries General of other Departments following the Government decision, informing them of the need to identify efficiencies and reforms and that this would form a key element of the Estimates engagement for Budget 2027. It is a matter for each Department to determine how the levy will be applied across the Vote Group and identify the efficiencies and reforms required to ensure this. My own Department will also be undertaking this process in accordance with the requirements.
