Minister for Finance and Public Expenditure & Reform Paschal Donohoe has today published the updated Public Spending Code: A Guide to Evaluating, Planning and Managing Public Investment.
The Public Spending Code (PSC), published in 2013, is the set of roles, procedures and guidance to ensure Value for Money in public expenditure across the Irish Public Service and The Code applies to all organisations that spend public money.
As part of the ongoing
reform of Ireland’s public investment management system, the Department of
Public Expenditure & Reform has reviewed and updated the PSC. The review
was informed by an extensive consultation process involving engagement with
public officials and an examination of international best practice.
Importantly, the Public Spending Code also incorporates learnings from capital
projects here in Ireland on a wide range of projects including the National
Children’s Hospital.
The update to the PSC
specifically strengthens the existing guidance to better reflect the realities
of project delivery with a particular focus on financial appraisal, cost
estimation and risk management.
The updated Public Spending
Code will:
- Support public bodies in delivering greater VFM;
- Provide greater clarity on roles and responsibilities;
- Revise the project lifecycle to reflect the realities of project delivery;
- Strengthen guidance; and
- Increase transparency through publication of business cases and evaluation reports.
Rigorous application of the updated Code will support public bodies in improving accuracy of cost estimation and forecasting and will also strengthen risk identification and risk management.
The Code will be supplemented by a new governance and assurance process for major projects with an estimated cost of more than €100 million. This new process will involve an independent, external review of major projects at key stages in the project lifecycle.
The update of the PSC is a key enabling reform for Project Ireland 2040 to ensure better project appraisal mechanisms, more commercial delivery of projects, and better estimation and management of costs.
Guidelines for the
use of Public Private Partnerships (PPP) were also published today replacing the 2006
guidelines and aligned with the key reforms made to the Public Spending Code.
Commenting on the
publication of the updated PSC, Minister Donohoe said:
‘’Major projects are complex endeavours. They take many years to develop and build, involve multiple public and private stakeholders, and the management of complex challenges including physical, technological, legal, and environmental. Rigorous application of the updated Public Spending Code will equip public bodies to anticipate, plan for, and overcome these issues. Application of this Code will allow the promise of public investment to be pursued within a sustainable financial setting”.
The requirements of the updated Public Spending Code apply with effect from 1 January 2020.
ENDS
Notes for Editors:
What is the Public Spending Code?
- The Public Spending Code is the set of rules, procedures, and guidance to ensure Value for Money in public expenditure across the Irish Public Service. It imposes obligations at all stages of the project lifecycle on organisations that spend public money. It includes central guidance on the standards for the development of business cases.
- As part of the ongoing reform of Ireland’s public investment management system, the Department of Public Expenditure and Reform has reviewed and updated the Public Spending Code requirements for capital expenditure. These will be published as The Public Spending Code: Guide to Evaluating, Planning & Managing Public Investment. Further technical guidance to support this Guide will follow in 2020 focusing on financial and economic appraisal in particular.
What are the main changes?
- All elements of the update of the Public
Spending Code are designed to strengthen Ireland’s public investment
management systems. The application of the principles in the Public
Spending Code will reflect leading practice in this area internationally.
The Code brings a renewed focus to:
- Gaining a more developed view of costs, risks and timeframes before committing to proceed with a project;
- Tighter governance of key decision points during project preparation and delivery;
- Ongoing updating of the business case for a project as it proceeds through design and planning phases; and
- Continued scrutiny of affordability throughout the process.
What further measures will be introduced for major projects?
- The Department of Public Expenditure and Reform is developing a new governance and assurance process for major projects with an estimated cost of over €100 million. This new process is being informed by international best practice. It will involve an independent external review of major projects at key stages. The detail of the process and arrangements for implementation will be scoped and developed with a target operational date of mid-2020.