The Public Spending Code: What Contracting Authorities Need to Know

The Public Spending Code (PSC) is the Government of Ireland's set of rules and guidance for the appraisal, management and evaluation of public expenditure. Published by the Department of Public Expenditure, it sets binding requirements for the technical appraisal of major public investments before funding approval, prescribes standard methodologies for cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA), and requires ex-post evaluation of significant projects to feed lessons into future investment decisions.

The PSC was substantially revised in 2019 and again updated in 2023. The current version raises the major project threshold — at which a formal full appraisal is required — and introduces stronger requirements for project tracking during implementation. The PSC interacts directly with the CWMF gate process: satisfying PSC appraisal requirements is a prerequisite for gate approval at PBC and DBC stages for projects above defined value thresholds.

For projects above €10 million, a preliminary appraisal is required at the concept stage demonstrating strategic necessity, a shortlist of options and an initial cost estimate. For projects above €100 million, a full cost-benefit analysis is required, applying standard economic parameters including the social discount rate, values of statistical life, and the economic cost of carbon. The PSC provides a technical appraisal guide with worked examples and a standard CBA model in Excel that sanctioning bodies expect to see populated for major projects.

Projects in the transport, health and education sectors each have sector-specific appraisal frameworks that supplement the PSC — for example, the Department of Transport's Common Appraisal Framework for transport investments, and the HSE Capital and Property unit's requirements for healthcare facility projects. Project teams must apply both the PSC and any relevant sector framework before seeking gate approval.

The PSC's appraisal process sits upstream of the procurement process. A project that has not passed PSC appraisal cannot proceed to procurement because the funding sanction it requires has not been obtained. In practice, this means that the procurement team needs to be involved from the options analysis stage to inform the procurement strategy — what contract form, what risk allocation model, what market is capable of delivering the project — so that the business case reflects realistic procurement assumptions.

The business case costings used in the PSC appraisal become the benchmark against which tender returns are evaluated for reasonableness and against which CWMF cost estimate submissions at each gate are assessed. A significant divergence between the business case cost and later tender returns typically triggers a requirement for updated PSC appraisal, which can delay the programme significantly.

The PSC requires post-project evaluation for all projects above €20 million. This evaluation, conducted typically one to three years after project completion, assesses whether the project delivered the benefits predicted in the business case, whether costs were controlled within the approved budget, and whether the project was delivered within the planned programme. Findings must be submitted to the sanctioning authority and are subject to review by the Irish Government Economic and Evaluation Service (IGEES).

The results of post-project evaluations feed back into the PSC guidance and into sector investment strategies. Poor project performance — cost overruns, programme delays, benefit shortfalls — identified in evaluations is used to strengthen appraisal requirements and project control disciplines for future projects. Procurement teams should treat the post-project evaluation as a closing step in the procurement cycle and should ensure that project records maintained throughout the project are retained in a form suitable to support the evaluation.