Departmental Expenditure
1. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to give an update on the projected overspends of Government Departments; and if he will make a statement on the matter. [27579/26]
As the Aire would be aware, there was an overspend in the Department of education. I wonder if he can give us an update on that. As he will know, the Department of education has projected a €600 million overspend that will be paid for by cuts to the Department of education and other departmental budgets. To be honest, it is further evidence that the Government cannot be trusted with public finances. I ask the Minister to give us an update.
Budget 2026 set out an expenditure ceiling of €117.8 billion. This reflects a significant uplift in expenditure to support the delivery of our programme for Government commitments. Expenditure figures from March were published on 7 April as part of the fiscal monitor. This is published monthly and sets out the spending position for each ministerial Vote group. It compares expenditure to the profile set out by Departments and to the previous year. Quarter 1 showed total gross expenditure was €26.4 billion. This was €1.6 billion, or 6.4%, higher than the same period last year.
At an overall level, end-of-March spending is broadly in line with the plans submitted by Departments, with the aggregate variance from profile showing an underspend of 1.6%. Budget 2026 provided total capital spending of €19.1 billion, a record level of investment. This will work in tandem with reforms to support the delivery of critical infrastructure in electricity, transport, housing and energy.
Capital spending at the end of March was €2.7 billion, showing an increase of 8% on the same period last year.
The largest year-on-year increases were in the Department of Education and Youth, which was up €89 million; the Department of Transport, which was up €57 million; and the Department of housing, which was up €56 million. Capital spending, as the Deputy knows, tends of ramp up as the year progresses, with the highest spending levels in quarter 4.
Budget 2026 also provided for a significant increase in the level of current expenditure, advancing key priorities in health, social protection and public services. End-of-quarter 1 spending was at €23.7 billion, or an increase of 6.2% on the end of March last year. This reflects budget 2026 measures such as social protection rate increases and front-line health and disability services. The Vote groups with the largest year-on-year increases were the Departments of Social Protection and Health.
Current spending is €0.2 billion or 0.9% behind the plans set out by Departments. The majority of Vote groups are under profile. My Department actively monitors spending developments and is in ongoing engagement with all Departments to identify any spending risks and mitigations. There are other areas. I will continue on them in my next contribution.
My question is where exactly the cuts will be. The reality is that these cuts are the direct result of the Government's decisions. Anybody who read the budget book at the last budget will know that the sums do not add up. We know that Fianna Fáil and Fine Gael Governments have underbudgeted and overspent for years and this Government is the exact same. Budget after budget, the Government failed to allocate the necessary funding for essential public services and relied upon Supplementary Estimates to cover its back. This overspend is not exceptional; these things seem to happen every year under the Minister's watch. Yet, the Minister has decided to scrap the practice of using Supplementary Estimates to cover overspends. To be honest, I think that is quite shortsighted. It also shows the poor budgeting that we have seen. I have never seen anything like the last budget, to be perfectly honest. The public deserves to know exactly where those cuts are going to come into effect.
To be clear, the expenditure ceiling increased to €117.8 billion, a significant expansion of public services and investment infrastructure in the economy. All I hear from the Deputy is to massively increase spending, which would significantly undermine the public finances. What we are seeking to do is moderate the overall growth in expenditure.
In regard to the Department of education, in fact, there was a significant expansion year on year. It increased funding compared to the 2025 Revised Estimates Volume, REV, allocation funding increase, by 10%, reflecting a clear expansion for the Department of education specifically. My Department is in ongoing discussions on funding for the Department of Education and Youth. That discussion and engagement is ongoing across Government relating to any further allocation for 2026.
The issue here is the question in relation to the €600 million. That is just a simple question; I do not think it is any more difficult than that. It is in relation to that €600 million. I have to be honest; I have never seen a budget like I saw this year. The sums do not add up. Anybody who can take out a calculator and take a look at the budget book will see that. If the Minister wants to publish something where the figures do not add up, that is fair enough but it causes huge confusion. I do not really know exactly what is happening in regard to budgets in this Government but, obviously, there are issues there. Perhaps it is something the Government could look at for next year but the question on the €600 million remains.
There is ongoing engagement with the Department of education. No decision has been made within Government on any additional funding at this point. There is a specific demand, particularly around special education, the demand of which was bigger than the budget forecasted and allocated. We are working constructively with the Department of education on that. When that concludes, I will be able to set out the broader context from a budgetary perspective.
Some of the statements the Deputy has made are unfair. If she takes the quarter 1 position, as I have said, the aggregate variance from profile on spending shows an underspend of 1.6%. In fact, we are on profile or below profile across many Government Departments, which shows there is a much closer relationship between what was budgeted for and how Departments are spending, notwithstanding the challenge that exists within the Department of education and we are working with it on that. I will provide full, detailed information to the Dáil when that matter concludes within Government.
Legislative Process
2. Deputy Conor Sheehan asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation when the Critical Infrastructure Bill 2026 will be enacted; the way in which it will comply with Ireland’s obligations under the Climate Action and Low Carbon Development Act 2015 given the limitations that will be imposed on legal challenges; and if he will make a statement on the matter. [27880/26]
I ask the Minister to outline when the Critical Infrastructure Bill will be enacted and how it is going to comply with our obligations, as they currently stand, under the Climate Action and Low Carbon Development Act, given that section 15 of this Act is going to be disapplied under section 7 of the new Bill.
The Critical Infrastructure Bill is a central pillar of the Government’s broader infrastructure acceleration agenda. The need for a Bill to fast-track a limited number of strategically important projects through approval processes was identified in the Accelerating Infrastructure Report and Action Plan published last December.
This Bill has been drafted and introduced. It passed Second Stage only this week. Its primary aim is to allow Government to designate certain projects or programmes as critical. This then requires all public bodies that may have an authorisation function for these projects or programmes to prioritise consideration of them within their approval processes. In practical terms, this means that relevant bodies will be required to prioritise, avoid delay, reduce timelines, parallel processes and co-operate to fast-track designated infrastructure but, other than modifying the application of section 15, the draft does not undermine or change any existing statutory processes or rights.
The Bill and associated explanatory memorandum were published and, as I said, Second Stage progressed on 14 April. It is my intention to bring the Bill through both Houses of the Oireachtas before the summer recess and then commence the Act without delay. I propose to disapply section 15 of the climate Act to designated projects because of the delays this section may give rise to. It has opened up and risks a new channel for judicial reviews of the decisions of public bodies. The impact or risk of this is that it could slow the pace of infrastructure development and introduce additional uncertainty.
Delays to infrastructure roll-out are, in my view, a key reason, in many instances, why we are not building the low-carbon economy we all want to build, particularly in the climate and renewable space. The report by Mario Draghi on EU competitiveness, for example, specifically identified Ireland as having the slowest approval process across the entire EU for renewable electricity.
Designated projects or programmes will still have relevant climate considerations built into their development. Every Exchequer-funded project, for example, is already required to measure and price its greenhouse gas emissions under infrastructure guidelines. Under this Bill, climate and environmental obligations will still apply, such as the use of low-carbon cement in construction and many other areas. Disapplication simply removes an unnecessary layer that could drive further judicial reviews that undermines the development of critical infrastructure.
First, I will go back to what I said on Second Stage. I am disappointed that we could not do even some limited, quick pre-legislative scrutiny on this Bill. I think we could have teased through some of these things.
I want to go back to a point the Minister made there. He was talking about building the low-carbon economy but in his concluding remarks on Second Stage he referenced, for example, the ring road in Galway which, in my view - and I know there are many views on it - is hardly the best example of climate-sustainable development. In particular, could the removal of section 15 stop a piece of critical infrastructure from being prioritised because it could have, for example, positive climate benefits? I am talking about a new train line and potentially a new Luas line. Could that apply to data centres under the Minister's definition of "critical infrastructure"?
I do not have the legislation in front of me right now but if the Deputy looks at the Bill itself, the infrastructure definition refers to State-funded projects, for example. The designation is clearly around State-funded or supported infrastructure. I hope that clarifies that point. I know it was raised; I referenced that in my closing remarks on Second Stage as well.
What we are trying to do here is remove this ambiguity and broad statutory interpretation that could emerge from section 15 relating to critical infrastructure projects. I used the example of the ring road simply because in the aftermath of it receiving permission, we already had NGOs saying they were going to use section 15 to try to get it caught up in more knots in the courts.
It is my point that this has gone through all the approval stages and has been going on for decades, and we should get it done and built. We should not have further legislative ambiguity in a piece of legislation which potentially undermines a critical piece of infrastructure. Most of the infrastructure that we are seeking to build out is in public transport and our grid development, all to build a low-carbon future. For regions in the west of Ireland and elsewhere, we do need to build out important strategic road projects which also enhance connectivity and growth.
I do support in principle what the Minister is trying to do here, even though I may have some issues with the way he is trying to do it. There is a piece in the infrastructure task force report on the Minister for justice seeking to put the judicial review process on a statutory basis. Surely that would address the issue the Minister is talking about in terms of judicial review. I have concerns here, which the Minister did not address when he responded to me, on what exactly could be defined as critical infrastructure and whether the State could define something. We have seen a worrying precedent in the Dublin Airport passenger cap and the LNG terminal. I am just concerned at this proposal to give the Executive power to disapply a public body duty under the State's climate Act to perform actions that are consistent with our climate goals.
We want to lift the passenger cap. I do not believe it is a matter for broad deference to the courts to decide on that matter. We are very clear in our objective within Government to lift the passenger cap and to grow passenger numbers at Dublin Airport. I do not believe the climate legislation should be used to undermine that. It is an economic necessity for Ireland to do that. Similarly, we have critical infrastructure which should not be undermined because certain NGOs can take cases in respect of it, or anybody can bring uncertainty. People have a right to take judicial reviews but we as legislators should seek to remove ambiguity within our legislative framework. This presents risk within our legislative framework. That is the context around critical infrastructure. When it comes to what the Minister, Deputy Darragh O'Brien, is doing on LNG, there are also energy security concerns which have been brought to light in recent weeks which we have to respond to and be honest about. He is working on that separately. We are very clear that the definition in respect of infrastructure relates to State-funded projects or programmes. Obviously there would be a limited number which are designated in that context, which we brought to the Dáil as well. We have to get momentum in this. If we continue to be deferential, provide ambiguity and have multiple legal avenues and judicial reviews, no matter how much spending we put aside for infrastructure, we will not improve delivery.
Strategic Infrastructure
3. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to provide an update on the impact of current global fuel price increases on the delivery of infrastructure; and if he will make a statement on the matter. [27580/26]
The programme for Government set out the clear prioritisation for the NDP review to ensure that investment can be maximised in the coming five years for strategic infrastructure. This includes the key energy, water and transport networks on which all future development relies. This is critical to allow Government to meet the additional targets in terms of building more homes and also to support our competitiveness.
My Department’s Build Report 2025 identified cost volatility and capacity constraints as key risks to NDP delivery and the recent fuel price developments accentuate these risks. While construction inflation in Ireland moderated through 2024 and 2025, recent fuel price increases are reintroducing cost volatility and will impact in a number of ways, including on direct construction costs, materials manufacture and the wider supply chain.
Global fuel prices have increased sharply, driven primarily by geopolitical conflict in the Middle East and disruption to oil and gas supply chains, particularly through the Strait of Hormuz. International Energy Agency analysis indicates that this represents the most significant oil supply disruption in decades, with severe short-term volatility in crude and refined product prices. The OECD and IMF have both warned that sustained high prices will place upward pressure on inflation and weaken growth prospects across energy-importing economies, including Ireland. That is why, over the last number of weeks, we implemented a significant cut in excise duties, reducing the price per litre of both diesel and petrol. We have also extended the fuel allowance. That package was €250 million, and a new package of measures on fuel costs has been introduced in support of particular sectors. This is all about keeping supply chains moving, supporting jobs and making sure our economy continues to function.
In 2023, my Department introduced a suite of amendments to the public works contracts to address the risks. I will return to that when I come back in.
The Minister and Deputy Sheehan were just talking about the approval of the ring road. In Galway we have been waiting decades for the approval of the Galway ring road. We also have a chronic infrastructural deficit across Galway city and county. People in Galway have been waiting decades for the approval of the ring road. This is the kind of infrastructure that has been desperately needed to reduce congestion within the city, particularly for those who may be travelling to hospital appointments from Connemara. That is always the way I see it. Similarly, the Galway harbour development has just been approved after 12 years of planning delays. We want to see this happen but there is a real fear now of the impact of global fuel prices delaying these projects further. Can the Minister reassure the people of Galway that the current increase in fuel prices will not slow down the delivery of infrastructure projects across Galway city and county?
I was about to say that we introduced a suite of amendments to the public works contracts to address risks relating to the price inflation of materials, fuel and energy in public works contracts. These amendments introduced a risk-share approach to price inflation of materials, fuel and energy prices. We utilise specific indices published by the Central Statistics Office which address the main input cost categories that are common to most construction projects. Price movements in the specified indices above a predetermined threshold result in an adjustment to each interim payment to reflect inflation, taking into account the weightings applied to the different materials and fuel categories. The amended price variation provision represents a proportionate and balanced approach to the risk posed by inflation to the delivery of critical public works projects. Like the Deputy, I want to see that project move quickly. It has been going on for decades. It is hugely important for housing supply in Galway and also for wider industrial development, in addition to other public transport objectives which we want to achieve in the west of Ireland. I know all of us want to see it move quickly now over the period ahead.
It really has been decades that we have been waiting. I do not remember a time when we were not talking about the Galway ring road. It is also about people being able to access services through a gridlocked city, which is incredibly difficult. I was talking to one mother who said that to get to a 9 a.m. appointment in Merlin Park hospital from Connemara, really she would have to stay the night before but the prices are expensive, so she was leaving the house at 6 a.m. That is the reality of it. The Minister mentioned public infrastructure and public transport as well. We have had some delays on that as a result of waiting on the decision on this. It should have always been done in tandem, from the 1990s onwards. It was always a matter of waiting for that decision to be made. Do the Government's cost estimates for infrastructure projects such as the Galway ring road provide leeway for the type of cost increases that are currently happening?
We have significant immediate volatility in pricing but the inflationary context is something that takes a more sustained impact. There is still wider uncertainty on that. Next week we will publish the annual progress report, where the Department of Finance will set out updated forecasts on the inflationary environment and the predictions around that, and will also provide a scenario analysis depending on how this evolves. We have good flexibility within the public works contracts, which are important.
We want to proceed with our national development plan and with a lot of the priorities we have. Transport, in particular, has one of the biggest allocations for the next five years, with over €24 billion or just under one in four euro going to transport. Notwithstanding what was raised earlier, and earlier in the week, many of the projects from a transport perspective are in public transport, in low-carbon projects in terms of bus, rail and others that we want to see advanced over the next five years.
Public Procurement Contracts
4. Deputy Cian O'Callaghan asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation if he will take action to address the issue of special purpose vehicles being used to avoid future liability in public construction contracts; and if he will make a statement on the matter. [27625/26]
Ba mhaith liom ceist a chur ar an Aire faoi thionscadal tógála poiblí. When multiple parties contribute to a project but only one still exists years later and when something goes wrong, that party can be held liable for 100% of the cost even if it is only 1% responsible. Developers nearly always use special purpose vehicles and then wind them up, which means they are let off the hook, meaning architects and engineers are sometimes left to pick up the bill that could put them out of business. Has the Minister looked into this structural issue? Does he have any plans to address it?
A special purpose vehicle is a separate legal entity established for a specific, predefined financial objective. From a public sector perspective, there can be risks with regard to long-term liabilities for defects, maintenance failures or operational issues. The Government has already taken action to address some of these risks. With respect to public works projects, SPVs are extensively used in the area of public private partnerships. They occasionally arise in conventional delivery models in the form of subsidiaries or joint ventures. They may also feature in housing delivery models such as turnkey or development agreements where private developers establish SPVs for specific developments. However, these agreements are contracts to purchase, rather than what would be considered a traditional construction contract.
While SPVs are a legitimate means to limit a business’s liability, careful scrutiny is required in the procurement process so as to ensure that the successful tenderer has the capacity to undertake the contract to completion and to bear the liability that is placed upon them under the contract. Where public private partnerships are concerned that liability can extend to 20 years or more beyond construction of the asset. The PPP company is liable for the maintenance and operation of the asset as well as its handover upon completion to a predetermined standard.
The financial standing of the PPP company and individual members of any joint venture are assessed and minimum financial thresholds for individual members of a joint venture may be specified. In the case of a member of a joint venture or a tenderer who is a subsidiary, if they are unable to meet the financial requirements of the tender, they would normally be required to provide a parent company guarantee. The terms of the contract define the extent of liability that the successful tenderer is required to bear. Under the standard public works contract, that liability may extend to a period of six to 12 years after completion of the asset. The choice will normally be predetermined by the level of complexity associated with the project. The terms of the contract also specify the levels of insurance that the successful tenderer is required to maintain for the duration of the contract.
The standard form of public works contract requires the contracting authority to set a financial cap on liability. Contracting authorities may specify a lesser or greater amount depending on the risk or complexity of the project.
I know this issue has been looked at and some work has been done on it, but it has not been addressed to the degree that is necessary for architects, engineers and small firms. They are still being caught by this. They are still not able to go in for projects, cannot get insurance and insurance costs are prohibitive. I recently met with representatives of the Association of Consulting Engineers of Ireland who told me how this is driving up costs and driving small firms away from public projects. As the Minister knows architects and engineers do not operate using special purpose vehicles to avoid accountability. They are usually small to medium-sized businesses and are being pushed to the brink because of crippling costs. These costs are ultimately passed on to the taxpayer when it comes to these big public projects if they are not able to bid or if their costs have increased.
Insurers already exit the Irish market because of this exposure. The insurer AIG told an Oireachtas committee that the 1% rule was the key reason it withdrew from engineering professional indemnity cover. The result is higher premiums, reduced competition and engineering firms avoiding these public contracts. I urge the Minister to act on this.
I might conclude what I was about to say. I appreciate the points the Deputy has raised. The standard form of public works contract requires the contracting authority to set a financial cap on liability. That depends on the complexity of the project. There are also number of other requirements that are designed to mitigate the risk of non-performance, including holding back a specified percentage of each interim payment - half the total retention sum held is released upon completion with half retained over the defects liability period. It is only released if all the recorded defects are addressed or it may be paid to a different contractor where the original one fails to address the defects.
On most public works contracts, there is also a requirement for a performance bond, normally 10% of the contract sum. This is also reduced in half upon completion with the remaining portion held in place for 15 months post completion.
We have a government contracts committee for construction, ensuring we develop the model with construction and manufacturing expertise so that there is a collaborative approach at the design phase in terms of the projects which are advanced. This issue has been related to me and particular sectors have raised it. It is about striking a balance and ensuring that there is respective liability. We also need to ensure we do not crowd out competition in the wider sector.
I think, based on the Minister's comment, that he accepts there is a problem here and I ask him to look into it further. The engineers are not raising this for no reason; it is because they are experiencing a very real problem. There is a solution to this which is to insert net contribution clauses into public contracts. That would not increase risk for the State and would simply prevent smaller contributors from being forced to absorb the full cost of defects caused by others. It would not remove any liability but it would ensure fairness in how liability works.
England, Scotland and Northern Ireland use these clauses routinely. The Civil Liability Act already allows for it. Section 35(1) explicitly recognises that parties may enter contracts limiting liability to their just share. The legislative basis is there but we need the Government to put it into action. Net contribution clauses would make public contracts more attractive, stabilise insurance costs and help ensure that engineering firms remain willing to tender. It would really help us to deliver the housing and infrastructure that we need. Will the Minister look further into this? Does he accept that there is a problem here?
I have had this relayed to me and we have integrated some of the OGP procurement team into the infrastructure division so that there is wider industry engagement in terms of delivery. However, it is about the balance. There is a need for a framework which attaches liability and responsibility to how contracts are delivered, while ensuring we drive competition. The Minister of State, Deputy Feighan, will be publishing a national procurement strategy in the coming weeks to drive more SME involvement in the broader procurement process for the delivery of infrastructure but also in the wider economy for public contracts. I have had that relayed to me by engineers and others in the community. There is always ongoing engagement with my Department relating to this matter.
Proposed Legislation
5. Deputy Mairéad Farrell asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation to provide clarity on what can be designated as critical infrastructure within the Critical Infrastructure Bill 2026; and if he will make a statement on the matter. [27581/26]
The Critical Infrastructure Bill is currently going through the Oireachtas, but it does not provide a full definition of critical infrastructure and seems to leave it up to the Minister of the day as to what is and what is not critical infrastructure. I ask the Minister to provide some clarity on what he means by critical infrastructure.
Allowing the Government to designate certain projects or programmes as critical infrastructure is the core of the Critical Infrastructure Bill. In response to a designation, all public bodies involved at any stage in the authorisation process must prioritise and accelerate the authorisation process applied to the maximum extent possible. By establishing a clear legal basis for prioritisation, the legislation will reduce ambiguity and ensure that critical projects and programmes receive focused and co-ordinated attention across Departments, regulators and agencies. It will address the unacceptable delays in our infrastructure-approval processes by mandating whole-of-State co-operation and create a fast-track pathway for critical projects and programmes to drive delivery.
Section 3 of the Bill deals with the designation process. The text of the Bill has been published in full along with an explanatory memorandum. This section of the Bill allows the Minister for public expenditure to make a recommendation to Government that a designation order be made in respect of a project or programme. There are a number of matters that I may have regard to in making a recommendation. They are set out in section 3 of the Bill. They include: the need to ensure effective and efficient delivery of a project or programme; whether delay or failure to deliver a project or programme may have adverse economic or social consequences for the State; whether a project or programme may impact in a positive or negative manner on the delivery of any other project or programme; the national development plan; and such other matters in relation to infrastructure as I may consider appropriate.
Project and programme are defined in section 1 of the Bill. A project means a project, the purpose of which is the delivery of infrastructure and that is funded by capital investment, by or on behalf of the State or by or on behalf of a public body.
Infrastructure is also defined in the section. The definition refers to any infrastructure that enables essential facilities and systems of the State to function effectively and includes, but is not limited to, energy, transport and water systems.
Following a recommendation from the Minister for public expenditure, the Government will, by order, designate projects or programmes as critical infrastructure. Every designation order will be laid before Dáil Éireann, which may nullify the order within 21 days.
The process of considering which programmes or projects I may recommend to the Government will commence after the Oireachtas has passed the-----
Thank you, Minister. I call Deputy Farrell.
I understand that the Minister is giving me the layout of the Bill and exactly how it will work. My interest is in what he would deem to be critical infrastructure. Obviously, we have serious issues when it comes to the delivery of critical infrastructure. I think of the likes of homes and houses, hospitals, public transport and infrastructure of scale. At the moment, what is being built an awful lot of the time is private student accommodation which is then rented at extraordinarily high prices. We see empty office buildings and that type of construction happening. I understand that the Minister is saying it is through the public system and not private, but it would be interesting to hear what he considers and deems to be critical infrastructure.
As to what we have tried to do, the Deputy and others will appreciate that if we were to list a load of projects in primary legislation, there may be another project which will emerge and which is of a critical nature. The other challenge is that this particular list then gets caught in 2026. In four years, or when a future government wishes to update the national development plan, there needs to be an ability to utilise this legislative framework to continue to designate projects appropriately. That is why we have established the statutory framework around how projects will be designated. Obviously, they are connected to the national development plan. It relates to State-funded projects, and I have set out the broad legislative framework as to how the decision will be made. It is important to have flexibility around it being an enabling framework to allow future governments to drive delivery. That is why we have not specified the particular projects or programmes in the Bill. I have set out the broad definition, as the Deputy mentioned, regarding how the designation process will work and what is defined as infrastructure within-----
Thank you, Minister. I call Deputy Farrell.
My party colleagues and I want to work constructively with the Minister on this Bill. We understand that our people and our communities need critical infrastructure to be delivered with urgency. We want to engage with this legislation and scrutinise it in order that it is fit for purpose because, as the Minister says, the critical infrastructure that is built by this Government will be in use for decades. Therefore, it is essential that this Government gets critical infrastructure delivery right. It has been incredibly disappointing that this Government has so far tried to evade scrutiny and limit the opportunity for TDs, relevant experts and stakeholders to look at and improve this Bill. Conversation is always better when we are looking at legislation. Will the Minister make a commitment that this Bill will get a full hearing on Committee Stage? That would be incredibly important. I do not sit on that committee. I understand Deputy Sheehan does. I have party colleagues who do. Giving it that time would be incredibly important.
Absolutely. What we have tried to do in the first instance is build the evidence base as to where the issues were, which we did last year. There has been strong stakeholder engagement. The report was published last July. There has been engagement with the Oireachtas committee on the challenges and the delivery gaps which exist. There has been a co-ordinated response from the stakeholder community and others in what has informed the drafting process around this Bill. The issue with doing pre-legislative scrutiny is that there is a risk this would lapse into the autumn, and we want to use the Bill to get projects done. Nearly everybody in the Opposition would share the objective of getting them delivered, whether it is critical grid infrastructure, which we need to build our low-carbon, renewable future, whether it is some of the public transport projects that have been referred to, or I can list some of the other areas as well. The Bill is a very clear enabling framework, and I want to be able to enact it quickly. Again, I want to work with everyone to get it right as well.
Public Procurement Contracts
6. Deputy Grace Boland asked the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation the reforms planned or under consideration to improve value for money, risk allocation and cost control in public procurement for State-funded projects; whether changes to tender evaluation criteria, including the weighting applied to price versus quality and delivery capacity, are being examined; and if he will make a statement on the matter. [27862/26]
Public procurement is one of the State's most powerful levers for delivering quality infrastructure and services, yet it is also where we see repeated cost overruns, delays and failed delivery. Good procurement is not about spending more money; it is about spending it wisely. We have to have robust processes in place. The Minister might update us as to what reforms are planned or under consideration to strengthen value-for-money considerations, risk allocation and cost control in the State.
Reform of procurement is specifically called out under action 25 of Accelerating Infrastructure: Report and Action Plan. There are also a number of actions focused on improving the visibility of the pipeline and providing greater certainty around the timing of the delivery stage of critical infrastructure.
Government policy with regard to public works procurement continues to require comprehensive definition of the brief and detailed description of the scope as this represents the most efficient means of delivery. There has been a significant move to rebalance the level of risk that consultants and contractors are expected to bear when engaged on public works projects. Liability caps and index-based price adjustment mechanisms have been introduced in the consultancy and construction contracts. Further reforms that are highlighted in the action plan include formalising dispute avoidance and early warning provisions; the development of an early engagement model to enable collaboration at the earliest point to drive efficiencies; the introduction of lean principles; and further adoption and promotion of digital technologies.
There is also a focus on training and supports for contracting authorities engaged in works delivery through the commercial skills programme. Through the construction sector group, there is ongoing engagement between the Government and industry on building the capacity of the sector itself through a range of supports and productivity measures.
I very much welcome the references to frameworks, guidance and training. That is all very important. We repeatedly see at the public accounts committee systemic failures in procurement processes. I have worked in this space. I am a lawyer. I have advised in this space. Unless we have people who understand the business case and who put in place appropriate milestones, and unless we have appropriate legal protections in place to mitigate the risks and make sure that delivery is pegged to payment, we are setting ourselves up for failure. We see it time and time again. We have a SUSI grant project with €6.4 million paid that is at pre-project phase. The national train control centre will see a €40 million overrun and more. We have to have the confidence and capability, and the Department has to assess budget versus delivery. We need to make sure with the projects for which we are awarding contracts that we award them on the basis that they have the competence to deliver them on time and on budget. I very much hope the Department will request that all Departments and agencies will provide annual reports on budget versus outturn.
There are ongoing reforms, as the Deputy knows, on the capital works management framework. It is an integrated set of contractual provisions, guidance material and technical procedure. It covers all aspects of the delivery process of a public works project, from inception to final project delivery or review. The structure of this strategic framework is closely aligned with and complements the infrastructure guidelines developed by the Department of public expenditure and reform. A key theme of the review of the capital works management framework, CWMF, is the development of high-quality information to enable better informed decisions, reducing risk on construction projects. We need to secure value for money. It is an ongoing priority for the Government. It is at the heart of all decision-making at every stage of policy or programme life. There is a lot of good work going on. I thank the Deputy for her question.
I appreciate that. The Minister of State is right to say that we absolutely have to have the data to ensure that our procurement process is robust and is delivering value for money. It is essential. We are here representing the taxpayers and we have to make sure that the taxpayers are getting value for money for services, not only capital projects but also IT projects.
This is where we are seeing systemic failures right across the board. I hope the Minister of State will be able to provide an update as to what evaluation processes the Department has been undertaking in recent months across all Departments and agencies.
Building information modelling, BIM, provides a structure for information generated in respect of a construction project. There is now a high-level implementation plan for phased adoption of the BIM on public works projects. In three years' time, all public works projects will have BIM requirements incorporated. As of 1 January last, milestone 6 of the Irish BIM mandate for CWMF has been reached. These requirements now include the contractor and supply chain on applicable projects up to €10 million. The Government continues to provide support to the industry to adopt all these areas through the Build Digital Project. There is a lot of good work going on, and we need to continue it.
Energy Policy
84. Deputy Ciarán Ahern asked the Minister for Climate, Energy and the Environment in light of the recently announced suspension of the carbon tax increase, the way in which he plans to make up the shortfall in funding allocated in budget 2026 to the SEAI for home energy upgrade schemes, and to just transition; and if he will make a statement on the matter. [27884/26]
I thank the Deputy for this timely question.
The allocation of the carbon tax is a matter for the Minister for public expenditure and reform, who took questions just before this. There has been no change because of the pause in the increase in the allocation for 2026. That was published as part of the Revised Estimates Volume, REV, last December and approved by the Dáil on 26 March 2026. Within my Department's 2026 allocation, there are three areas that received funding from the carbon tax. First, in the residential community retrofit programme, the budget allocation is a record €641 million this year, including €558 million from the carbon tax. We are planning for this to support the home energy upgrades of 73,000 homes this year, including solar PV. The target includes 11,500 fully funded home energy upgrades under the warmer homes scheme, which we discussed yesterday at some length, for households at risk of energy poverty. A record of over €340 million of the budget has been provided for this year. There has been a significant investment and year-on-year growth in home energy upgrades. From 2019 to December 2025, about €1.7 billion was provided in support for homeowners. We have done about 244,000 homes under that, including almost 33,000 fully funded upgrades, particularly focusing on homes at risk of energy poverty through the warmer homes scheme.
To answer the Deputy's question directly, the budget and allocation this year is not affected by not increasing the carbon tax this year. I will come back in on a couple of other areas that we are funding, such as the just transition fund and the green climate fund.
There were any number of interventions that we felt that the Government could have made to alleviate and reduce the cost of fuel for hauliers, farmers and everyone else. It is very disappointing that the one climate-friendly measure here has been undermined, and that the Government has chosen to jettison this over other subsidies, direct payments and excise cuts. These are all measures that we want to support. Our fear here is that the Government has deferred this amount and it was scheduled to come on in May because, as it was put in the budget, the increase on home heating fuels will take place in May, after the winter heating season. It has now been deferred to the winter. The fear is over whether it will be deferred again. Is it realistic to think that the Government is going to implement it in October as people are filling up their tanks again?
It is a good question. What we have tried to do regarding the support package of about €750 million is to make sure that it is balanced and targeted. We have done decreases in excise duty. We have also brought forward specific schemes of support for vital sectors. For example, the haulage sector has been provided €40 million per month for three months in targeted payments and there is €100 million for the agriculture scheme. That is to help with the fuel price spikes and increases we have seen because of the outbreak of the war in the Middle East.
Specifically on the Deputy's question, I will defend the carbon tax. To be fair to the Deputy, colleagues in the Labour Party and other parties in the Opposition, with the exception of the main Opposition party, support the carbon tax because it brings forward specific ring-fenced funding in order that we can protect households and businesses against future shocks. This is a deferral of this increase.
That is all it is. We will target resources in specific areas, reduce costs and certainly ensure there are no further increased costs because of Government tax in the middle of this year.
It is a central plank of addressing climate change in this country. It is a crucial funding source if we are ever going to move away from our dependence on fossil fuels. I take the point that it is for the Department of Social Protection but the Minister was not able to give me any figures for how much this deferral will cost. I would appreciate if the Minister's Department or the Department of Social Protection could get back to me on exactly how much it will cost. On an ongoing basis, will this be made up from general taxation? Are we giving up on the polluter-pays principle or is the Minister determined to ensure the carbon tax increases that have been legislated for will happen?
This is not a cancellation of an increase; it is a deferral. The cost is approximately €22 million in paused tax receipts. To put that in context, the overall investment from 2019 to now is over €2 billion. Our budget for this year, I assure the Deputy, is unaffected. We have also changed the retrofitting grants for households and seen a significant uptick in applications there. We want to bring forward a retrofit passport to make it more accessible, particularly to middle-income earners. We are seeing a significant increase in applications for heat pumps because we upped that grant to €12,500 - the cavity wall grants as well.
We had a good debate on solar yesterday. The Social Democrats brought forward some ideas around that. I want to accelerate solar further. We did 33,000 solar installations last year and can do more this year. We want to target those who are at energy security risk or energy poverty risk. We will protect the carbon tax because it is a clear mechanism for us to be able to protect households and businesses into the future.
Electricity Grid
83. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment the steps he is taking to eliminate the risk of electricity blackouts due to risk to grid stability that is posed by data centres (details supplied); and if he will make a statement on the matter. [26187/26]
EirGrid, the national grid operator, has issued a stark warning that blackouts are almost certainly on the cards because of the negligence of the Government. It is not the first time; it has been making these warnings for ten years and Governments have refused to listen. The red carpet is being rolled out for data centres, yet we cannot build houses or connect public transport. We are told the lights could go out. What steps is the Minister taking to eliminate any risk of blackouts due to the threat to grid stability posed by data centres?
That is not what EirGrid said. We have to put the facts on the floor of the House. EirGrid is the transmission system operator responsible for managing our power system at all times. It is independent of me as Minister but I meet and engage with its representatives regularly in the exercise of their functions. They are accountable to the regulator, CRU.
Fault ride through is what the Deputy is referring to. It is a growing grid stability and electricity security risk for energy system operators worldwide. We are not the only country looking to mitigate potential risks, regardless of how small they are. We saw what happened on the Iberian Peninsula and in Virginia in the United States. Every system operator is looking at its risks, regardless of how small. We are not in a situation whereby we are at risk of a blackout, I assure the Deputy.
In line with EirGrid's licence obligations, it has been proactively managing this issue but, similar to other jurisdictions, believes additional measures are needed to ensure grid stability is not compromised in the short term. That is being looked at right across Europe. EirGrid has submitted new timebound requirements for large energy users to CRU for assessment and a decision. I have engaged directly with the sector as well. There has been a good collaborative approach. It is just risk mitigation. It is not that there is a risk of blackouts, as the Deputy said. Systems operators always have to look at what could happen in the future and look to mitigate risk. That is the appropriate and sensible thing to do. The sector has been collaborative and constructive in its approach. This is a short-term measure to mitigate small potential risks. It is the right thing to do. CRU will determine how the fault ride through and the new grid operation pertains to the application from EirGrid.
I see what the Minister is saying, but will there be a prioritisation framework so, for example, housing and public transport can be prioritised ahead of data centres? It is one third of our electricity and it is predicted to go much higher. It is already causing grid interventions and higher household bills. In the midlands in particular, it is preventing housing being built. Data centre demand has skyrocketed and gone out of control. It could not have been anticipated five or six years ago how high it would go - up by over 500%. EirGrid has been concerned about it and has introduced new emergency protocols. The risks to the economy are more than that. There are risks to economic stability and to societal trust, in that ordinary people see the percentage of the bills they are paying and see proportionally lesser charges being paid by data centres.
That is not the case. Industrial and economic growth is not in conflict with growth in housing output. In the past five years, we have delivered 135,000 new homes; last year, over 36,000 new homes. That is good and is what we need to do. In PR6, the grid investment programme that has been published and that is there for everyone to see, there are about 520 capital projects. As part of that, it states what this investment will support. It supports large energy user growth, housing growth and other industrial and economic growth. That is right and proper.
In this discussion, data centres are treated by some as a negative. They underpin tens of thousands of jobs in this country. We are at the leading edge of new technologies and cloud technologies and should continue to be at the leading edge. That is why the grid investment programme and capital projects like the North-South interconnector are so critically important and we are going to get on and do those.
The Construction Industry Federation has said housing delivery is being held back by significant delays in electricity connections. Last year, while 60,000 homes were commenced, completions remained far below what is needed. The Minister is saying housing is a national priority but the energy policy allowed massive developments to absorb grid capacity first. We are not, contrary to what the Minister says, anti-tech or anti-business. It is about sequencing, fairness and priorities. The data centres can wait for their connections; housing and families cannot. Homes must come before hyper-scale electricity demand from the large energy users.
The bottom line is this. Housing is not failing because builders cannot build, but there is a threat to it. What specifically is the Minister doing to prevent that?
We need a plan-led approach to this and that is why we have published the large energy user action plan. The final decision has been given on that, which is very clear. It involves a planned approach to where and how we deploy electricity and energy resources to enable large energy users to grow and to enable us to continue to attract increases in domestic indigenous business and in foreign direct investment. That is critical. One is not in conflict with the other. The measures for which EirGrid has sought approval from CRU are appropriate and are risk-mitigation measures. Many other TSOs across Europe are doing the very same thing and it is right, proper and responsible that we do that. Housing growth and industrial growth are not in conflict. We need to continue to accelerate delivery of our grid investment programme, which we will do.
Energy Prices
85. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment the steps he is taking to shield households from the energy crisis triggered by the US and Israeli attack on Iran; and if he will make a statement on the matter. [26188/26]
What steps is the Minister taking to shield households from the energy crisis, which has been triggered by the US and Israeli attacks on Iran? Will he make a statement about it? He will have seen that over the past couple of weeks, the Government lost the confidence of the people, even one of its own Ministers. The Government has not done enough, particularly for people whose home heating oil bills have effectively been doubled. There are 750,000 households affected, often in rural areas, often in single dwellings, and often with older people. What are they supposed to make of the Taoiseach saying he hopes they will have a good summer while the cost of filling their tank has nearly doubled?
As Ministers and as TDs, we fully understand the pressures households and businesses are under due to the price increases because of the outbreak of the war in the Middle East. It is a global situation that every country is grappling with. By any fair assessment, the intervention that the Irish Government has made on behalf of its people amounts to multiples of the value of others made in the EU. It is about 7. 5 times greater, per capita, than that of Germany. It is the largest one that any state has actually made to support businesses and households.
I refer to the reductions in excise on diesel, including agricultural and green diesel, and petrol, and also to the reduction to the National Oil Reserves Agency levy. All of these add up to a significant saving. People are still under pressure, absolutely. We get that, and that is why the measures we bring forward have to be targeted.
One quarter of Irish households, or about 470,000, receive direct supports through fuel allowance payments. We have extended these for a further month. We increased the payment per week in the budget. We have increased that further in a time-bound manner, effectively by extending it for a further month.
We are not going to be able to protect every sector from every price increase. Obviously, what we want to see is a de-escalation of the conflict and a return to normality. What it does speak to as well is the absolute need for us to continue to accelerate energy generation from renewable sources.
On a positive note, we saw last month, in March, that 49% of our electricity was generated through renewables. We are continuing to accelerate the deployment of renewables to reduce our dependence on fossil fuel, which is a risk for this State and many others. We are dependent on other countries for the energy that we use. This conflict, in particular, means we need to accelerate the deployment of renewables further. I assume I will receive the support of the Opposition in doing that.
We saw yesterday the Taoiseach clapping himself on the back because, since 2022, the worst of the rises in electricity bills had been cushioned by supports given by the Government. In this regard, there were electricity credits promised in the run-up to the election. However, the supports have been stripped away, leaving ordinary householders even more exposed. Compounding matters was the dismissive attitude of the Taoiseach. The Minister may or may not wish to comment on the Taoiseach’s comment that he hopes there is a good summer ahead for people.
Would the Minister consider removing the excise duty on home heating oil, decreasing it by €200 per tank, and introducing more concrete measures to deal with what is effectively a doubling in price, particularly for people in rural areas? We are already paying the highest electricity prices in the EU. There has been a failure by the Government to deal with this. Electricity credits have been stripped away and the response does not go far enough.
The Taoiseach has not been dismissive in any way, nor has the Government as a whole. Maybe the Deputy could explain why his party was the only one on the Opposition benches to vote against every excise reduction when the first round of packages was introduced, on 25 March? It did that again this week. It voted against the measures introduced by the Government in the Dáil by way of financial resolutions to reduce costs for households and businesses. Sinn Féin was the only Opposition party on 25 March to vote against the initial package, worth €250 million. I do not understand that.
Sinn Féin is for abolishing the carbon tax. The carbon tax retrofits homes and businesses to protect them, reduce their energy use and make them more efficient. It is a good climate measure, but it is also a really good cost-saving measure. Sinn Féin has never explained where it would get the €660 million or so that we are going to invest this year to retrofit 73,000 homes, and also the carbon tax revenue that deals with the agri-climate environment scheme, other such schemes and business support grants. Where is that money coming from? Where would Sinn Féin get the money for a proposed further cut in excise to the tune of about €200 million?
Unfortunately, last time I checked it was oral questions to the Minister and not questions for the Opposition. Unfortunately, the Minister has not dealt with my questions. That he answered a question with a question makes me wonder whether he is from Kerry, by any chance. He has not answered any of the questions we have asked. What specifically will he do to ease the burden on rural householders posed by the price of home heating oil?
The protests over the last week are the tipping point. They are the final straw for people who are already struggling from week to week, often in households with dual incomes. I have spoken to a lot of people who have been working in farming or in factories. Their partners might also be working, maybe in the HSE, but those people are struggling and unfortunately the measures have not been enough. The package the Minister spoke about was half baked and was not complete. It did nothing, and the people's response will show that it did nothing to address the matter.
It is not a fair assessment to say we have done nothing. Ours was the largest intervention that has been made in the EU. I simply asked the question of Sinn Féin, as the main Opposition party and the one that presents itself as the potential alternative Government after the next election, in 2029, where it would get the money from? How would it pay for the retrofitting of houses and businesses? How would it pay for solar grants and heat pump grants? How would it pay for all the things that ensure the 244,000 homes already retrofitted are protected from aspects of price increases because they are using renewable sources? It has just never been explained to me. It is important that Sinn Féin do that.
I could go through all of the measures. Sinn Féin knows all the measures that we introduced, because it voted against them all. I really do not understand its position in this regard either. Sinn Féin was the only Opposition party to oppose decreases in costs to consumers, including households. It just does not stand up.
86. Deputy Jennifer Whitmore asked the Minister for Climate, Energy and the Environment for an update on the CRU price-gouging investigation with regard to energy prices; and if he will make a statement on the matter. [27417/26]
Could I have an update on the CRU price-gouging investigation that the Minister called for with regard to energy and electricity prices?
I thank the Deputy for the question. I understand she wants clarification specifically on the review of the pass-through from wholesale electricity prices to retail electricity prices that the Minister, Deputy O'Brien, requested the CRU to undertake. As the Deputy knows, retail electricity prices are influenced by several factors, including wholesale energy prices, system operation costs and supplier hedging. The latest data from Eurostat shows that, in nominal terms, Ireland ranked fifth for household electricity prices among European countries in the first half of 2025. When adjustments are made for purchasing power parity, Ireland is about mid-table in terms of affordability, with its electricity prices being the 12th highest among European countries.
In a report from last October, the International Energy Agency, IEA, observed that Irish retail prices had not adjusted at a pace comparable with that of the decline in wholesale prices, with the energy component of retail prices remaining up to three times that of wholesale prices. While the CRU has found no evidence of market failure or windfall profits in the retail sector in its market monitoring role, the IEA findings underline the importance of progressing the programme for Government commitment to commission an independent review into the speed and the level of pass-through from wholesale prices to retail prices.
The Minister wrote to the CRU to request that it commence the independent review, building on the work of the previous CRU investigations, reviewing the competitiveness of the Irish retail energy markets, examining supplier costs, including hedging and pricing practices, and providing price analyses to compare with other EU member states. This will also assess whether measures are warranted to enhance market responsiveness to wholesale price changes and make recommendations to ensure the benefits of lower wholesale prices are felt by the consumer.
We are all aware that hundreds of thousands of households are finding it difficult to pay their energy bills and what we saw last week is a direct result of that. An estimated 315,000 people are in arrears on their electricity bills. Many of them have been in arrears for more than 19 months. These are people who are still not able to catch up with the incredible price shocks we experienced after the Ukraine invasion.
One of the roles of the CRU is to protect customers. The Minister has asked the CRU to look at the pass through of wholesale prices. Right now, wholesale prices are 72% cheaper than they were at the peak in August 2022. They are 72% cheaper, but our retail prices are not 72% lower. In fact, they are higher. We have not seen any reduction, and I do not think hedging can be used as an excuse. Will the Minister of State provide an update on what the CRU has done and when it will it be publishing its report?
The Minister and the officials in the Department have been engaging with the CRU to emphasise the importance of this. We all know the impacts that people are feeling. We know that the cost-of-living crisis is a result of significant increases in inflation in recent times. Of course, we all desire to try to resolve this. As the Deputy knows, the Minister commissioned a report on the national energy affordability task force. The first phase of that work came through prior to the budget last year. That is ongoing work to try, in so far as the Government can, to intervene to get that pass through on prices and to ensure that electricity is affordable to our citizens. We recognise where we are at in the international table. With the departmental officials working with the CRU, it is very much our desire to get to a point where we can get parity in that situation.
It is clear that the Minister of State has had no update from the CRU on this. He provided no information or timeline on its examination of price gouging. It is incredible that six months after the IEA highlighted that wholesale electricity price reductions were not being passed on to Irish consumers at the same rate as other consumers across Europe and that five months after the Minister wrote to the CRU asking it to conduct an investigation into price gouging, the CRU cannot even give the Minister of State an update as to what it has done or when it will conclude that investigation.
What is the CRU doing? It is meant to be protecting consumers. Irish consumers are facing another energy shock when it comes to electricity prices. They are still trying to get over the incredible electricity prices that resulted from the Ukraine war. The CRU is asleep at the wheel here. I ask that the Minister of State meet with the CRU and direct it to immediately conduct this investigation into price gouging. We cannot wait any longer.
The Deputy is aware that the CRU is independent entity. It is answerable to the Oireachtas through the Oireachtas committee, so there is an opportunity there for the Deputy. In fairness to her, Deputy Whitmore is a very vocal and hard-working member of that committee. The Minister has written to the CRU, and the officials are in contact. We want to bring this to a conclusion, but we must also recognise the independence of the CRU. As already stated, the commission is answerable to the Oireachtas. Price setting by energy companies is a commercial and operational matter for the companies concerned and not something that the Government or the Department could or would be able to interfere with or influence. My suggestion, as I said at the outset, would be to engage with the CRU through the committee.