The average length of time taken to process a cost benefit analysis by Department in 2017 and 2018

QUESTION

To ask the Minister for Public Expenditure and Reform the average length of time taken to process a cost benefit analysis by Department in 2017 and 2018; and if he will make a statement on the matter.

REPLY

The Public Spending Code is the set of rules and procedures that apply to ensure that value for money standards are upheld across the Irish Public Service. The Public Spending Code encompasses guidance on a variety of issues related to the management of expenditure at each stage of the expenditure lifecycle. This includes central guidance on the application of appraisal and evaluation methodologies including cost benefit analysis.  The Public Spending Code is supplemented in some instances by sectoral specific appraisal guidance. These are developed by the relevant Department and set out additional requirements and parameters specific to the sector, while remaining in the line with the Public Spending Code.

The Public Spending Code requires that Sponsoring Agencies, i.e. those that are responsible for delivering projects, prepare an economic appraisal such as a cost benefit analysis or a cost effectiveness analysis for current and/or capital expenditure projects or programmes which cost over €20 million before the relevant Sanctioning Authority, i.e. usually the body providing the funding, makes a decision on whether to approve the project. The Public Spending Code also requires that the economic appraisal is submitted to the Department of Public Expenditure and Reform for technical review. The purpose of the technical review is to support consistency in the application of the Public Spending Code guidance.

The Public Spending Code requirements do not prohibit Sponsoring Agencies from conducting cost benefit analysis on projects costing less than €20 million. The Public Spending Code guidance stresses the need for proportionately in appraisal and for Sponsoring Agencies to choose the appraisal methodology that is most appropriate for assessing the value for money of a project or programme.

Responsibility for complying with the requirements of the Public Spending Code including on appraisal is a matter for each Sponsoring Agency and Sanctioning Authority.  The Department of Public Expenditure and Reform does not see all cost benefit analyses conducted by each Sponsoring Agency and does not collect statistics on numbers of appraisals or length of time to conduct and process appraisals.  Each Government Department is required to prepare an annual Quality Assurance Report on how it is meeting its Public Spending Code obligations. Part of this obligation includes regular in-depth checks of a sample of projects and programmes to monitor the quality of the appraisal and assess the appraisal process.

The Project Ireland 2040 Capital Tracker will, going forward, capture information on projects at each stage of the project life cycle. The tracker is published at https://www.per.gov.ie/en/national-development-plan-2018-2027/. This will provide additional information on the appraisal of capital projects in the National Development Plan.

The newly established Investment Projects and Programmes Office (IPPO) in the Department of Public Expenditure & Reform will play an important role in strengthening the appraisal and evaluation of investment projects and programmes. A review of the Public Spending Code is underway. The IPPO is updating the capital appraisal guidelines in the Public Spending Code. As each element of that review is completed, it will be published.