The Cabinet has discussed implementing stricter spending curbs on Government departments ahead of October's Budget with fresh sanctions for overspending departments.
Minister for Public Expenditure Jack Chambers sought approval for the introduction of much stricter spending controls to tackle department overruns.
The move follows a decision by the Government last month to impose an efficiency levy on all other departments to account for a €600m overrun in the Department of Education.
There are also spending concerns around the Department of Health with the HSE €250m over budget after the first quarter of the year.
Offending departments will lose the autonomy to make spending decisions - including the hiring of staff up to principal officer level - without getting prior approval from the Department of Public Expenditure; which may refuse to support any new expenditure measures where there are overruns.
Overspending departments will also face closer supervision from officials at the Department of Expenditure through the establishment of budgetary oversight groups.
The enhanced cost controls are contained in a new expenditure escalation process outlined by Minister Chambers at the Cabinet meeting.
He told Cabinet colleagues that against the backdrop of profound global economic uncertainty, it is essential departments adhere to their agreed budgetary allocations.
Government departments have already been told they may have to reduce their expected spending this year by between 0.1% and 1.4% as a result of the increased financial demands on the Department of Education.
Minister Chambers has rejected suggestions the recent levy or the new curbs will cause tension within the coalition, telling RTÉ's This Week on Sunday that there is collective agreement on the spending plans.
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