Budget 2027: Ministers told to find savings in their departments

Jack Chambers has been giving fellow ministers a ‘sobering assessment’ of Ireland's public finances ahead October's budget

Public expenditure minister Jack Chambers told ministers they must find further savings and efficiencies within their existing allocations before they will be granted additional money. Picture: David Young/PA

Government ministers can rejig internal spending allocations to better focus on their priorities rather than extra money, as preparations for a tight budget in October remain ongoing.

Budget talks are at an early stage, with Government departments seeking additional funding for new measures.

However, public expenditure minister Jack Chambers is outlining a requirement to find further savings and efficiencies within their existing allocations before they will be granted additional money.

It is maintaining the position taken in the 2025 budget talks, where ministers were urged to find savings and efficiencies within their own budgets.

One senior Government source said that ministers are being given a more “sobering assessment” of the public finances, saying that this would ensure they decide on their “actual priorities”.

They said that, in the last six years, there had been a spending rise of around 9% each year, which is set to be cut back to 6% in October’s budget, equivalent to a 33% slowdown in spending. The source said: 

If they don’t reform, they’ll have very little to spend.

The source indicated that ministers would be permitted to move funds within their departments to better align with their priorities, rather than simply having additional money provided in October’s budget.

Direct talks between Mr Chambers and individual ministers are yet to take place, with discussions happening at civil servant level at present.

Government departments have also formally submitted their spending cut proposals for 2027 to the Department of Public Expenditure to make up for major overspends at the Department of Education.

These proposed cuts are expected to be scrutinised by officials, with the possibility that ministers could be asked to look again at their budgets if the savings do not add up.

€1.5bn of €8.5bn budget to be spent on tax cuts

Overall, there is a budget package of €8.5bn available, with €1.5bn of this due to be spent on tax cuts. The remaining €7bn will go towards new spending measures, but also on ensuring the existing level of service.

Tánaiste Simon Harris has repeatedly flagged his intentions to deliver an income tax cut for middle-income earners, with expectations that this could see the higher rate cut-off point rise from €44,000 to €46,000.

Changes to inheritance tax have also been mooted by ministers, with no decisions being taken ahead of October 6.

Elsewhere in the budget, it is expected there will be moves to reduce the cost of childcare for parents.

Three departments over budget this year

It comes as new data from the Dáil’s Parliamentary Budget Office shows there are just three departments over budget so far this year, while the remaining 15 are below their current spending targets.

The Departments of Education, Social Protection, and Health are all currently ahead of profile, for a total of €659m over budget at present.

However, the Parliamentary Budget Office has said this is being masked by underspends of €1.87bn across the other departments.

It has warned that if the current level of overspending continues and other departments catch up to their current spending profile, it could “result in significant overspends by year end”.

In total, at the end of July, there was €73.6bn collected by the exchequer, of which €60bn was tax, primarily Vat, income tax and corporation tax.

• Tadgh McNally, Political Reporter