This piece examines how recurring spending overruns can affect budget control, public contracting and the cost of future Government commitments.
The fiscal council expects another large overrun
The Irish Fiscal Advisory Council is to tell the Oireachtas Committee on Budgetary Oversight that day-to-day Government spending is likely to exceed its planned level by more than €1.4 billion this year. Chairman Seamus Coffey is expected to say that overruns have become routine and have repeatedly pushed spending above budget-day plans. Over the past decade, they have averaged more than €2 billion a year in today’s terms. The last year in which spending was at, or below, budget was 2013. The Government has already revised this year’s spending forecast upwards by €700 million.
Fast growth is appearing across several spending areas
Government day-to-day spending has grown by 8 per cent so far this year, compared with the 6.3 per cent growth previously signalled. Ifac attributes the acceleration partly to education overruns, which were already apparent last year, and to energy supports introduced this year. It says pressures are also emerging in health, social protection, foreign affairs and housing. Total public spending rose by 54 per cent between 2019 and 2025, making the gap between approved plans and actual outturns a wider issue than a single department or programme.
Allocations are the control point for public contracts
For public buyers and suppliers, the relevant procurement issue is how departmental spending allocations are set, monitored and revised. A contract or service planned within an allocation still sits inside a wider departmental budget; repeated overruns can indicate that demand, costs or policy measures were not fully reflected in the original plan. That does not establish that procurement rules were breached, and the source makes no such allegation. Minister for Public Expenditure Jack Chambers has promised a fundamental change in budgeting and warned that departments will face greater sanctions for breaching their spending allocations. The Government’s medium-term plan proposes limiting annual public spending growth to 6 per cent for the next five budgets.
Higher spending could increase future costs
Coffey is also expected to warn that large spending increases or tax cuts in the upcoming budget could create permanently higher costs for households and businesses. Ifac’s advice is that spending, net of tax policy changes, should grow no faster than the economy’s sustainable growth rate, which it estimates at 4.5–5 per cent in nominal terms. The Government’s summer plans imply net spending growth of 6 per cent. Coffey says stronger spending could add to inflation, while the Central Bank of Ireland has upgraded its growth outlook after stronger-than-expected consumer spending.
IN NUMBERS
The warning points to a continuing gap between budget-day commitments and actual spending. For procurement markets, the practical lesson is that published allocations and forward plans should be read alongside the Government’s record of revising forecasts and managing departmental limits. The source identifies potential pressure on public spending control, but it does not show that any specific contract, supplier or procurement process was improper.
Reported from irishtimes.com, 2026-09-16. The Tender Wire is published by Otnox.
