Revealed: How Ahern, Cowen And McCreevy Ignored Warnings On Economy

A new report has revealed that former Taoiseach Bertie Ahern, and the two Finance Ministers that served under him, Brian Cowen and Charlie McCreevy, repeatedly ignored warnings from their civil servants about the dangers of the economic policies they were following.

An investigation by Canadian expert Rob Wright, covering the years 1999-2008, shows that Department of Finance warned the previous government about the risks of a bubble, but it was ignored.

The Department's advice was more direct and comprehensive than concerns being expressed by others in Ireland or internationally at the time.

Yet ministers around the Cabinet table continued to increase spending and cut taxes substantially above what the Department recommended.

The biggest surges in spending were during 2001 and 2007, in the run-up to general elections.

In all, tax cuts and spending increases were €6bn more generous than recommended by the Department.

"Had departmental and ministerial advice to cabinet at the start of the budgetary cycle been accepted and sustained, Ireland would have been better positioned to deal with the current economic challenges," it stated.

The independent review of the Department of Finance was ordered by Finance Minister Brian Lenihan in September last year.

But despite being completed, the damning review remained unpublished for three months, and was only put into the public domain after the general election.

The report identifies three reasons for the government's failure to follow the Department of Finance's advice over the past decade.

Firstly, there were "extraordinary expectations" from the public for more and better services, and for the fruits of the economic boom to be shared through spending or tax initiatives.

Secondly, the government's budget process was "completely overwhelmed" by the social partnership process, and Programs for Government

And thirdly, the Department officials failed to shout loudly enough to be heard.

The report says while they did provide warnings, the tone and urgency did not change over time, and they should have shown more initiative in making their points, particularly in relation to the construction sector and tax.

Mr Wright recommends a number of changes to the budgetary process, and points out that the Department of Finance does not have enough technical economic experts in some area, and is sometimes too numbers driven, rather than strategic.

There has been no comment from Brian Cowen, Charlie McCreevey or Bertie Ahern on the findings of the report.

The Association of Higher Public and Civil Servants claimed the review had vindicated its members' decisions over the years.

"This report clearly states that the actions of politicians, rather than civil servants, were the primary factors in, firstly, adopting short-term policies that ultimately led to economic collapse; secondly, ignoring repeated warnings of an impending downturn; and thirdly, failing to respond appropriately when it hit," AHCPS general secretary Dave Thomas said.