‘We can’t spend the same money twice’ – Creed clarifies underspend

The Department of Agriculture, Food and the Marine’s underspend in 2017 was passionately defended by the Minister for Agriculture Michael Creed this evening in the Seanad.

He stated that it was “deliberate and mischievous” to present the underspend “as a disservice to farming” or as “a saving”.

Claims that the underspend could be utilised by the department to fund the fodder transport subsidy, for example, were rubbished by the minister.

To do this, would be to misunderstand the budgetary process, he added.

“On an annual basis, in late summer, we begin engaging with the Department of Finance and we understand entirely what our potential liabilities are – whether it’s under TAMS, or GLAS, or ANC, or any of the other schemes.

We have to – because, they are liabilities which are due – make sure that in the event that those approved applicants come in for payment, that the department has sufficient money in the bank to pay them.

He argued that the opposition would be “jumping up and down” if somebody presented an authorised payment claim, but wasn’t paid – because, the department said they hadn’t got enough of money or that the department hadn’t asked for enough of money in the first place.

Full contingent liabilities

Minister Creed explained that his department, on annual basis, works out what its full contingent liabilities are before engaging with the Department of Finance.

In order for farmers to be eligible for payments, they must undertake certain actions – like those outlined under GLAS.

Commenting on the issue, Minister Creed said: “We anticipate in good faith that all of those compliance issues will be adhered to by all applicants.

“But, if – for example – they don’t get compliance, it means we have provisioned for it; but, it may not become a payment that is due until the following year.”

‘Robbing Peter to pay Paul’

He described the idea of utilising the department underspend to fund other or additional schemes as “effectively robbing Peter to pay Paul“.

“This is the point that is being spun – that there is a saving and that we could do X, Y and Z, if only we wanted to and if we were prepared to.

I can’t spend somebody else’s money that is due to them under GLAS, or ANC, or any of the other schemes we run – simply because they don’t present a paying order in the relevant calendar year.

“If it comes in in January of the following year, I’m still obliged to pay it,” he said.

TAMS

Continuing, Minister Creed added: “One of the more difficult areas we have had in this space is in respect of TAMS, which most people would accept is a hugely successful scheme under a wide degree of headings. There is a whole range of grants available across a broad spectrum of activities.

“There are about 12,000 approved applicants; there’s only about 3,000 of them that presented for payment and there’s about 9,000 outstanding.

“We have to try and anticipate what will be the level of payment presented in a given year and we have to provide against that. When you look at the accounts for 2017, you will see we provided so much for TAMS; but, much less came in.

That – in certain quarters – is being presented as a saving. It’s not a saving; it’s money that just hasn’t been paid in the calendar year in question – but, may be due in the following year.

We can’t spend the same money twice and I think that is a really important point,” he said.

The underspend is being “deliberately misrepresented” to people as a “failing of the department”, according to Minister Creed.

But, on the contrary, the minister sees it as a reflection of the negotiating capacity his department has when it goes to meet the Department of Finance to get provision for its full contingent liabilities for a particular year – though they may not all crystallize in the given 12-month period.

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