Thursday 8 December 2016

€2.5bn for capital projects has not yet been spent

Paul Melia and John Walshe

Published 05/11/2010 | 05:00

GOVERNMENT departments have failed to spend almost half of the €6bn allocated this year for major capital projects, raising fears that they have been hoarding cash to plug the huge gaps in the State's finances.

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Despite a desperate need for cash for school buildings, hospital facilities and public housing, almost €2.5bn remains to be spent with just two months of the year to go.

If individual departments do not spend their allocations, they can keep just 10pc of what is left. The rest must be returned to the Exchequer.

The figures from the Department of Finance provoked fury yesterday among school chiefs when it emerged that the Department of Education had failed to spend €331m this year -- despite crumbling school buildings with poor facilities.

For every €1m spent on construction projects, between 10 and 12 jobs are created. The underspend so far this year means that up to 12,000 construction workers are needlessly claiming the dole.

Hundreds of schools are clamouring for new buildings, but just €381m out of a total of €712m granted to the department this year for capital projects has been spent.

The department could not say last night how much it will hand back to the Exchequer, but next year's capital spending on schools and colleges will be reduced. The exact cut has yet to be agreed.

Tanaiste and Education Minister Mary Coughlan last night said more than €450m had been invested this year and that the extra €70m spend was not reflected in Department of Finance figures because it had been carried over from 2009.

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Construction of 53 new schools will have begun before the end of the year, but there have been some delays in purchasing suitable sites.

She also admitted that spending on new schools was €50m behind projections. Some 1,200 schools are currently awaiting approval for capital works.

Ms Coughlan said: "There is a high number of projects going on site and substantial monies are now being paid out of the schools' capital budget, which will see significant expenditure before the end of the year."

The Irish National Teachers' Organisation said the failure to spend almost half the budget earmarked for school buildings was indefensible.

The departments of environment (€371m) and transport (€275m) have also failed to spend their allocations, despite a desperate need for water-treatment plants and new public housing.

The Department of Energy, which is tasked with making older homes warmer and more energy-efficient, has an underspend of €40m.

The Construction Industry Federation said: "The situation will deteriorate further over the course of 2011. The implications for employment are very grave."

The Department of Finance last night confirmed that it expected €300m of the capital budget to be unspent by the year end. Some €5.5bn will be allocated in 2011, a drop of €500m on this year.

Irish Independent

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