Thanks to some fancy footwork around the 2005 Estimates published last week, the Minister for Finance says he has already found an extra €730 million in cash for capital spending next year, not including what ever top-up he adds to the pile next Wednesday.

The Minster will be tempted to bill it as an increase of more than 14 per cent in capital spending, but that would be over-egging the pudding.

Mr Cowen arrived at this figure by subtracting his best guess for what the Government will actually spend in 2004 (€5.24 billion), from what has been allocated for 2005 (€5.72 billion), plus €250 million of the 2004 allocation that remains unspent.

The difference is indeed €730 million, but in reality only €120 million of it has not been already been allocated under five-year spending plans, or envelopes, unveiled in last year's budget by the previous minister, Mr McCreevy .

The €120 million is a reserve built into the 2005 allocation and its distribution will be announced on Budget Day. The three big spending departments all staked a claim to at least some of it on Estimates day.

In addition, the Minister himself promised that he would announce on Budget Day a package of measures aimed at alleviating disability, but there will be some overlap between it and both Health and Education.

Talks between Mr Cowen and his colleagues are continuing, but the consensus is that he will concentrate his Budget Day largesse on a small number of high-profile projects, details of which may emerge in the coming days.

The Minister for Transport, Mr Cullen, told his Estimates press conference last week that he is "currently finalising a significant capital transport package as part of the Budget".

The Tánaiste, Ms Harney, was more circumspect, announcing that the "full amount of capital investment [on health] will be finalised in the Budget".

The Minister for Education, Ms Hanafin, indicated that her capital allocation would become clear in the light of "adjustments to capital envelopes" that will be announced on Budget Day.

These new five-year envelopes are the most likely route by which Mr Cowen will try to achieve the Budget Day trick of being all things to all men.

The proximate reason given by the Minister for revising the five-year envelopes after one year is that they include unrealistic assumptions about the amount of additional private sector money that will be co-invested with State funds in areas such as roads, schools and hospitals.

The five-year envelopes introduced by Mr McCreevy called for the investment of €33.6 billion between 2004 and 2008, which averaged out at 5 per cent of Gross National Product over the period.

Some €3.6 billion of this was to come from Private-Public Partnership (PPPs), with the first big chunk of this money coming next year, when the private sector was expected to invest €585 million in projects in addition to the €5.72 billion being put up by the Government.

The problems encountered in getting PPPs going during the current year mean that this assumption is no longer realistic.

The easiest solution would be to just push the PPP elements of the current five-year plan out into 2006 and 2007, by which time the teething problems holding back PPPs should have been resolved. This, however, would still leave a big hole in the 2005 capital budget which assumes €585 million of PPP funds in addition to €5.72 billion of Exchequer funding.

The €250 million carried over from 2004 will make up for some of this, but the Minister may not be able to bridge the gap, even allowing for some extra Budget Day cash.

There is a real risk then of the Government failing to hit its own capital spending target, but the new envelopes announced on Budget Day will spare the Minster's blushes in this regard.

They will disguise, but not alter, the fact that despite a significant increase in real capital spending next year, the Government's investment plans are falling increasingly behind target for a number of reasons.

Davy Stockbrokers points out that government capital spending has fallen in nominal terms in both 2003 and 2004, and that in real terms capital spending in 2004 will be 16 per cent lower than in 2002.

But given that one of the reasons for this is that various departments can't actually spend their allocations, this is not entirely a bad thing.