Matt Carthy (Cavan-Monaghan, Sinn Fein)
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3. To ask the Taoiseach and Minister for Defence the amount of funding surrendered from his Department to the Exchequer, in 2023; the reason the allocated funds were unspent; the amount he expects his Department to surrender in 2024, and the reason therefore. [42032/24]

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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This question is fairly straightforward. At a time when we continue to see more members of the Defence Forces leave than join each year, could the Tánaiste outline how much money from his Department was actually surrendered back to the Exchequer in 2023, the reason these allocated funds were unspent and whether he expects his Department to surrender further funds in 2024?

Micheál Martin (Cork South Central, Fianna Fail)
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The Defence Vote group comprises of two Votes: Vote 35 - Army pensions and Vote 36 - defence.

The 2023 Vote 36 – defence net surplus surrendered to the Exchequer was €18.1 million. This figure includes surplus appropriations-in-aid of €9.1 million, which, as the Deputy will be aware, cannot be used to fund additional expenditure and must be surrendered to the Exchequer. Appropriations-in-aid on the defence Vote primarily comprise of superannuation receipts and UN receipts, the timing of which can be difficult to predict. Surplus appropriations-in-aid are not unique to defence and are a common occurrence across all Votes.

Excluding surplus appropriations-in-aid, the surrender on the gross defence Vote allocation of €915.4 million was €9 million or 1% of the gross allocation.

During 2023, underspends arose across a number of subheads, most notably on subhead A3 – PDF pay, due to the Permanent Defence Force strength falling below its target. In line with public financial procedures, and with the approval of the Department of Public Expenditure, National Development Plan Delivery and Reform, most of these savings were redirected to meet spending pressures elsewhere on the defence Vote, particularly on capital. Investment in a number of significant projects, including the inshore patrol vessels, military aircraft and software defined radio, resulted in total capital spending of €208 million, more than €30 million in excess of the allocation.

This prudent approach ensured that any underspends arising were used effectively to meet spending challenges elsewhere across the Vote in 2023, while also fully adhering to all relevant public procurement guidelines and the public spending code/infrastructure guidelines.

With regard to 2024, while expenditure is currently slightly behind profile, latest projections are that the end of year spending position will align very closely with the allocation.

With regard to Army pensions, in 2023 the net surplus surrendered to the Exchequer was €3.4 million, amounting to 1% of the gross allocation of €294 million. Expenditure on the Army pensions Vote is predominantly demand-led and non-discretionary. A similar outcome is expected for 2024.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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People will be astounded to see the Department of Defence surrendering any money back to the Exchequer, considering the challenges that the Defence Forces are currently facing in the retention and recruitment crisis and the ambitions that have been set out, particularly in the report of the Commission on the Defence Forces.

I have raised with the Tánaiste on a number of occasions the fact that now, into the third budget following the Commission on the Defence Forces, he has missed by quite a wide margin the additional capital funding targets that were set out in the commission's report. In his first year as Minister, he underreached the ambition by €70 million. The Tánaiste, again, underreached by €70 million and in this year's budget, he has missed the mark by a further €30 million.

In terms of current expenditure, the Tánaiste mentioned the €9 million predominantly made up of pay. Will he clarify whether that money remained within the Department and precisely how much of that money remained within the Department or within the Defence Forces overall?

Micheál Martin (Cork South Central, Fianna Fail)
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We have actually expanded expenditure. The bottom line is, in terms of capital expenditure, procurement is an issue in terms of the time it can take to procure, particularly C295s. The bottom line is we are committing to a lot of expenditure, which will come on stream. It does not necessarily fall in any given 12 months. I do not accept the Deputy's characterisation of the budgetary situation.

In fact, I have made it clear to the military leadership and to the Department of Defence to keep investing in the barracks, Haulbowline and Baldonnel. For the first time ever, we are developing master plans for Baldonnel and Haulbowline to give long-term certainty to our facilities so that we can plan accordingly and spend, and that will be done with a value-for-money focus.

Just because we have €9 million or 1% left at the year, we does not throw it at anything. The Estimates the subsequent year are increased over and above the previous year. This year we have a significant increase on what we are allocated and on the output of last year. There is no issue here.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I assure the Tánaiste that I would not suggest to the Government to throw money anywhere because it is quite good at doing that of its own volition, but here is the crux. For the past number of years on budget day or in the budget documents released by the Department, the Tánaiste has said that the budget includes provision for the employment of 400 additional members of the Defence Forces when everybody in this House and anybody who has been watching the Defence Forces knows that will not happen. The most likely scenario is that there will be fewer members of the Defence Forces than there were the previous year. That is exactly what happened last year. Knowing that the Tánaiste had allocated money for more members and personnel than would be in place, surely it would be prudent to have a plan B to ensure that money was not thrown away and there was provision to ensure that money would be spent. This year, the Tánaiste again announced that he had made provision for an additional 400 members of the Defence Forces. Has he a contingency if that target is not met so that the funding that has been allocated to that need will not be lost to the Defence Forces and will be put to good use?

Micheál Martin (Cork South Central, Fianna Fail)
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Every year it is put to good use. That is the point I made in my reply. In 2023, it was put to good use. It was used elsewhere across the Vote. That happens all of the time.

We are down now to €9 million out of a budget that is close to €1 billion. We need to a sense of perspective here in all of this.

I discussed the appropriations-in-aid, which is receipts that come that cannot be used for other purposes. Those are the well-established rules.

The more important point is we have produced the implementation plan in respect of the Commission on the Defence Forces report, we have timelined all of the investments and the drawdown will be subject to proper procurement and proper value for money. That makes sense.

In many respects, we need not to be tied to this idea of the rigid demarcation line every 12 months. The key issue is: are we substantially increasing our capability over the next number of years in line with the Commission on the Defence Forces review? The answer is, "Yes, we are."