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Ministers told: 'no spending spree' in Budget

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The Garda Dog Unit does a sweep of Leinster House as the Dail
returns from its summer recess.

The Garda Dog Unit does a sweep of Leinster House as the Dail returns from its summer recess.

The Garda Dog Unit does a sweep of Leinster House as the Dail returns from its summer recess.

Ministers have been warned there will be "no spending spree" because of the softer Budget next month.

Public Spending Minister Brendan Howlin has told his colleagues to stop making demands for additional spending next year. The minister brought a memo to the Cabinet telling colleagues to come forward with proposed expenditure cuts, as required.

The package of cuts and taxes in Budget 2015 was supposed to be €2bn. But the improved economic conditions mean this figure will be below €1bn, meaning there will be less spending cuts than anticipated.

Mr Howlin asked colleagues to come up with potential cuts in their departments. But the proposed expenditure reductions coming forward from ministers has fallen short, with many seeking spending hikes.

The Labour Party minister is understood to have told the Cabinet there will be "no spending spree" next year.

Within Government circles there is concern about a failure to control spending being a risk to economic recovery.

Threat

"PER (Department of Public Expenditure) brought a memo today designed to tell ministers to cop on regarding spending requests," said a Government source.

The memo requested they produce savings in keeping with ceilings outlined in last budget.

"Any excess will be used to address emerging pressure points across other departments. One threat to recovery is spending," a source added.

During the Cabinet discussion, ministers were told to stick to the existing spending targets in their Budget preparations and come up with options for reductions in spending. Mr Howlin has been trying to manage the expectations of his Cabinet colleagues who are seeking to increase their budgets, despite the need to reduce the country's debt levels.

Austerity

After overseeing three tough austerity budgets, Mr Howlin believes the major issue this year is dampening the hope of other line departments who want spending increases after six years of retrenchment.

Mr Howlin and his top officials had sought all departments to deliver a suite of savings that would deliver a five per cent cut in how much they would have to spend in 2015. But it has emerged that many departments did not comply with Mr Howlin's request. A number of them sought to increase spending on what they were allocated in 2014.

The request from Mr Howlin's department for savings was part of the process of compiling the annual Comprehensive Review of Expenditure (CRE). Departments have in recent years been called upon to suggest where cuts can be made to their overall spending allocation as part of the budgetary negotiations.

The better than expected tax returns and fewer people out of work in recent months have aided the Government aims of reducing the country's debt ratio to below 3pc of GDP.

Irish Independent