Government to Reallocate €470m Across Departments to Cover Education Overspend

Jack Chambers, the minister for public expenditure, has sent a letter to fellow ministers detailing the amount each department would be levied to counteract an overspend in the Department of Education led by Hildegarde Naughton, the minister responsible for that portfolio.

5 per cent to fill the overspend, with variations to protect areas such as homelessness, frontline staffing and pensions. Nearly €470 million must be found from next year’s spending plans.

The levy is intended to fill a €470m black hole compounded by school costs, The Times reported. The move has prompted concern among cabinet members that key coalition pledges will face delays. One senior cabinet minister told The Times it was unfair that other departments were being called upon to fill the budgetary hole created elsewhere.

“We are being asked to step in to pay for our neighbours’ spending once here, but I don’t think people will be willing to do it again a second time,” the minister said. The challenge extends into 2027, when the money will be taken out of each department’s funding base. The programme for government will be more than two years old by then.

The senior cabinet minister warned that current decisions “will mean that we will have to put a brake on the delivery of the promises made in the programme for government and in the lead-up to the election. ” A second cabinet source said ministers had been warned that, despite surging tax receipts, the forthcoming budget would be tight with trade-offs expected.

Dara Calleary, the minister for social protection, has previously indicated he will prioritise a new cost of disability payment.

Other ministers are preparing demands for welfare and pension increases in line with inflation. Peter Burke, the minister for enterprise, said energy costs are increasing and increases must reflect that reality. 5 to 3 per cent towards the end of the year.

So it’s important that increases will be reflective of that,” Burke stated. He added that the budget would represent a reset for Fine Gael on income tax. “The top rate entry point on tax is €44,000 and that is way too low when compared to OECD countries,” Burke said.

Burke also questioned repeated energy credits. “We have to ask ourselves hard questions. ” he said. Simon Harris, the minister for finance, will tell his party this week that expenditure has grown rapidly in the past five years.

Future increases will have to be targeted towards improving access to services and reducing costs for people, particularly in childcare and disability, Harris will say. The education levy comes against a backdrop of pressure in health spending. The HSE recorded a €250 million overspend in the first three months of 2026.

Last week the HSE announced it would pause recruitment in non-frontline roles. 06pm BST.