In December 2025, Government published the Medium-Term Fiscal and Structural Plan, which set out fixed expenditure ceilings for the period 2026-2030. Under the plan, expenditure will increase to €147.3 billion in 2030. This is a large level of continued investment in capital and current expenditure, with an average annual growth rate of 6 per cent over 2026-2030.
The Medium-Term Fiscal and Structural Plan has prioritised capital with ceilings agreed as part of the NDP plan review and an additional increase in capital from 2028 onwards. The ceilings include €102.4 billion in Exchequer Voted Capital expenditure from 2026 to 2030. The higher levels of capital investment in the plan reflect infrastructural needs and the demands of a growing economy, ensuring the critical supporting infrastructure to enable the delivery of 300,000 houses by 2030.
To ensure this significant level of investment delivers on Programme for Government commitments and value for money, there is a need for a strengthened expenditure control environment and renewed focus on fiscal discipline across all expenditure.
In May, I published Circular 21/2026 "Expenditure Control and Escalation Process", which issued to all Government Departments and provides a clear framework for managing all current and capital expenditure, and sets phases for escalation if spending overruns emerge. These phases can be applied to both capital and current expenditure as required and where applicable. It also defines the roles and responsibilities across Departments, ensuring strong accountability for expenditure management.
Importantly, it is responsive to emerging spending pressures and enables timely and proportionate corrective actions where required. Where expenditure pressures persist, the Circular sets out a framework for when and how DPER may engage with Departments. These steps are focused around strengthening governance, reprioritising expenditure within Departments allocations, and ensuring that overruns are addressed in a timely manner. The Circular also reiterates that responsibility for managing current and capital expenditure rests with each Department’s Accounting Officer.
In April, Government agreed that additional funding of €646 million will be provided to the Department of Education and Youth in 2026. To accommodate this reprioritisation and deliver on the 2027 ceiling agreed under the MTFP, other Departments have been asked to deliver a levy focusing on efficiencies and reforms which will total €446 million from 2027 from current expenditure. The levy applies only to current expenditure, capital expenditure is not included. Within current expenditure, 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 delivery of reforms and efficiencies supports adherence to the fixed expenditure ceilings set out in the MTFP. 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. 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 and the subheads these will relate to.
Taken together, Circular 21/2026 and the introduction of the expenditure levy reinforces other recent efforts to strengthen expenditure control, including Circular 18/2025 “Value for Money Obligations” which my Department published last year and correspondence issued by both myself and the Secretary General of my Department at the start of this year highlighting the need to adhere to the expenditure ceiling set out in the Revised Estimates 2026.
