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Extra public service pay day to cost exchequer €300m

The inclusion of one additional pay and pensions day in public expenditure next year for “technical” reasons will cost the exchequer some €300 million, Government documents show.

Revised spending estimates from Minister for Public Expenditure Brendan Howlin also show that Government moves to suspend metered water charges in favour of lower flat fees will necessitate a €85 million increase in public expenditure next year.

The 253-page document – known as “the Rev” in official circles – also sets out a further allocation of €62 million to meet additional spending pressures unrelated to the water scheme.

The revised estimates indicate that overall the exchequer pay bill will rise €754.34 million or 5.3 per cent next year to €14.94 billion. This represents some 29 per cent of expenditure.

Pension bill
The annual pension bill – €2.81 billion in 2015, down 2.4 per cent – does not include local authority pension costs, as these are not exchequer-funded.

The €300 million increase for the additional pay and pension day in 2015 will not be included on the budget deficit next year as the liability is deemed to be accrued and an adjustment was made for it in the October budget.

“This arises every 10/11 years,” said Mr Howlin’s department. “An additional payment arises for fortnightly paid staff when the first and final payroll dates occur on 1st January and 31st December respectively.

“This arises in 2015 with the additional payment representing the crystallisation of a liability that has been accruing over a number of years.”

Revised estimates
Gross public spending will rise 0.3 per cent in 2015 to €53.23 billion compared with 2014, according to the revised estimates.

This mainly comprises €49.61 billion in current or day-to-day expenditure, up 0.2 per cent on 2014.

The allocation for capital expenditure for the purposes of long-term investment comes in next year at €3.62 billion, up 2 per cent.

However, total net spending goes down 2.2 per cent next year to €41.72 billion from €42.68 billion.

Fianna Fáil public expenditure spokesman Seán Fleming said the document was “inherently” flawed. “The revised estimates published today actually detail a reduction in spending in 2015 of €786 million compared with 2014 spending. On budget day Minister Howlin promised an increase in spending next year of €429 million,” Mr Fleming argued.

“There will have to be substantial supplementary estimates again in 2015 to make up for Minister’s underestimation of expenditure in 2015 published today.”

Mr Howlin’s Department said the revised estimates reflected a considerable number of technical changes, which were designed to enhance reporting of public expenditure figures and reflect international standards.

HSE expenditure
Prime among these was the inclusion of expenditure formerly allocated to the Health Service Executive in the estimate for the Department of Health.

“This change will not impact on the level of funding available for health expenditure and the figures presented in the Rev have been restated to reflect this change,” said the Department.

“Also included is the reclassification of expenditure arising from changes to the European System of National and Regional Accounts standards which involve the reclassification of some expenditure from current to capital. This change is budget neutral.”

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