Government comes up €6bn short in medium-term spending plans

The Government has come up €6bn short in its medium-term spending plans, the country’s budgetary watchdog has warned.

To exacerbate matters, two government departments will require additional funding.

The Irish Fiscal Advisory Council (IFAC) said the Government’s spending and tax blueprint, the so-called Stability Programme Update, published only two months ago, fails to take into account the financial costs of an ageing and growing population and inflation.

The Government’s April document, which set out its spending plans for the next five years to the European Commission, forecast current and capital spending would total €59.5bn in 2021.

Meanwhile, close to a half a billion euro shortfall in the budget for health will be discussed by the Cabinet today.

The gap in funding could lead to cuts in services or money being taken from other departments.

A memo from the Department of Public Expenditure will outline funding allocations for each department for 2016 and any extra funding that should be awarded to them.

The Irish Examiner understands that both the Department of Health and Department of Justice will require additional funding.

Government sources say the Cabinet is expected to hear that health will be up to €450m over budget.

Health Minister Simon Harris admitted last week that the HSE was €120m over budget for the first three months of the year.

Under strict new EU rules though, the Government cannot plug the gap with a supplementary budget. Instead, funds may be rerouted from elsewhere or services even cut.


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