COMMITTEE OF PUBLIC ACCOUNTS debate -
Wednesday, 16 Apr 2003

Vol. 1 No. 16

Report of Value for Money Examination

(No. 43) - Building Maintenance Service.

Mr. S. Benton (Chairman, Office of Public Works) called and examined.

Chairman

I welcome Mr. Benton. It is his first time to appear before the committee as Accounting Officer. We are dealing with the report on value for money examination (No. 43) - building maintenance service, Vote 10 - the Office of Public Works and Vote 44 - Flood Relief.

Members and witnesses' attention is drawn to the fact that as from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. These include the right to give evidence, the right to produce or send documents to the committee, the right to appear before the committee either in person or through a representative, the right to make a written and oral submission, the right to request the committee to direct the attendance of witnesses and the introduction of documents and the right to cross-examine witnesses. For the most part, these rights may only be exercised with the consent of the committee. Persons being invited before the committee are made aware of these rights and any persons identified during the course of proceedings who are not present may have to be made aware of these rights and provided with the transcript of the relevant part of the proceedings, if the committee considers it appropriate in the interests of justice.

Notwithstanding this provision in legislation, I remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provision within Standing Order 156 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

I invite Mr. Benton, chairman of the Office of Public Works, to introduce his officials.

Mr. Seán Benton

I am accompanied by commissioner David Byers, our new commissioner, Clare McGrath, Joe Farrell, the principal officer in charge of accounting, and Gerry Doyle, who heads up the Kilkenny office where our accounts branch is based.

Chairman

I invite the representative of the Department of Finance to introduce his officials.

Mr. Dave Hurley

I am principal officer in the organisation, management and training division. I deal with administrative and budget matters for the board. My colleagues from the public expenditure division are Dermot Quigley, principal officer, and Eric Hartman, assistant principal.

Chairman

I invite Mr. Purcell to introduce the value for money report.

Mr. Purcell

The report before the committee records the results of an examination by my staff of the structure, finances and operation of the building maintenance service of the Office of Public Works. The BMS, as it is known, has staff of 220 or so and carries out general maintenance work on State property, mainly in Dublin. It also undertakes specialist refurbishment and repair work on architecturally and historically important State property. The estimated cost of running BMS operations in Dublin in 2002 was about €13.5 million.

The origins for this examination lie in the Office of Public Works annual report for 2000 which included a summary financial statement on the Dublin operations of the BMS. This showed a loss for the year of €4.3 million on total expenditure of €11.3 million. Clearly, if losses of this scale were being incurred, something serious was wrong, especially when one considers that the BMS had a captive client base.

My examination established that the root of the problem was the failure to include all charges for work done on the invoices issued to customers and, in some cases, the failure to issue invoices at all. This stemmed from a combination of shortcomings in the computer system and a lack of in-house expertise in using that system. The accounting basis for the financial statement was unsound in that it included notional income in respect of work for which the BMS does not charge. That is about two thirds of all work. The true account would disregard such notional income and associated expenditure when computing a trading profit or loss.

We extracted figures from the database and reconstructed the accounts for each of the four years 1998 to 2001 on the basis of the chargeable work done by the BMS. The summary on page 23 of the report shows the revised outturn for each year.

There has been a long-standing aim that the BMS should be operated on a commercial basis competing with the private sector for maintenance work on State property. In practice, this has not happened. The BMS has been the first port of call for most, if not all, Departments and Government offices in Dublin for routine maintenance. We found that contributory factors were the ready availability of BMS staff, the lack of formality and, to be fair to the BMS, a level of satisfaction on the part of accommodation officers with the services provided by it.

As a result of the way things were organised, competitive forces existed to a limited extent between the BMS and the private sector. This, combined with a lack of clear business targets, has consequences, such as the failure to charge the full cost of work done and the continuation of inefficient work practices.

At a more strategic level, since 1994, the Office of Public Works has had an inspection and advisory role in the condition and maintenance of State property. However, it only began to conduct the necessary surveys of the property portfolio in 2000 as a first step towards drawing up prioritised maintenance schedules. This is important work as it will inform the decision-making and the options for getting best value for future maintenance expenditure. I am sure the Accounting Officer will be able to update the committee as to how that work is progressing.

The committee will note in chapter four of the report that the Office of Public Works is drawing up proposals for the future role and operation of the BMS which involves concentrating its efforts on maintaining exempted buildings and effectively leaving the maintenance of other State property to the private sector. I do not know the status of the current proposals, especially vis-à-vis the Department of Finance, but I expect that they have been subjected to rigorous cost-benefit scrutiny before getting the go-ahead.

Chairman

I thank Mr. Purcell. I call on Mr. Benton.

Mr. Benton

I understand that an opening statement in my name has already been circulated so I will not take up the committee's time by going through it on a line by line basis. There are a few things I would like to say and highlight.

I very much welcome the report which is an excellent one and certainly very valuable to us in terms of the ongoing discussions we are having on the re-organisation of the building maintenance service in Dublin. I would like to put that on record.

I am sure the committee will be glad to hear that the loss situation which has been reported has turned into a profit situation for 2002. The service returned a profit of €1.27 million. That is largely as a result of a ten point plan which has been adopted. Some of the issues were ongoing. Some of the shortcomings that have been highlighted in this report have been addressed.

I would like to touch briefly on the ten point plan. The first point is that the computer system which was a source of much of the problem has been upgraded and is now working well. The second point is that we are applying market rates in terms of our charges to other Departments.

The issue of the downtime and the level of downtime when benchmarked against similar bodies is being addressed and has improved. We have detailed annual audits of the building service and all the procedures and recommendations highlighted in those are being rigorously implemented.

The staffing levels are being reduced on a managed basis and, within a five year period to the end of 2006, we will have reduced staff by 25%.

Another issue, absenteeism, is now being managed better. While the figures show 9% to 10%, the reality is that, if the 12 people who have long-term illnesses are taken out, our actual absenteeism is at about 4%, which compares with the industry norm.

There is a reference in the report to surplus staff. The committee will probably have seen from a newspaper report this morning that the historic properties and the national monuments, which are looked after by Dúchas, under the Minister for the Environment and Local Government, are transferring to the Office of Public Works in the near future. If there are any surplus staff after our new drawdown contracts are in place, they will be quickly absorbed into the new services for which we are taking responsibility.

The other point the Comptroller and Auditor General touched on is the measured term contracts. These are being introduced in the Dublin area with the aim of improving the efficiency of the service. Departments will be able to draw down their maintenance from the private sector at rates that have already been cleared by the Office of Public Works and the work will be monitored by the Office of Public Works. We will have that scheme in place later in the year. We will pilot it initially in the Dublin area and if it is as successful as we hope it will, we will extend it to the rest of the country.

Regarding the issue of job demarcation, we have made some progress in that area and that is detailed in my report. The issue of multi-skilling is an objective of the office although, realistically, it has to be a long-term one. The report acknowledges the difficulties in introducing this. It will require very detailed negotiation with the unions concerned but that is something we are pursuing.

I have hit on the ten action points we have taken. When these are in place it will result in more efficiency and better cost effectiveness.

Chairman

The Office of Public Works proposes to withdraw the building maintenance service from carrying out work from its charged clients, such as the Garda Síochána. This work will, in future, be carried out by private sector maintenance providers. Building maintenance staff will be assigned to work on buildings exempted from charges. Will this work be sufficient to absorb the entire existing work force? Will there be redundancies?

Mr. Benton

We believe we have sufficient work, particularly as we go into programmed and planned maintenance, to absorb all of the staff and having regard to the fact that the staff will be reducing over the coming years. If there were any concerns about that in the past they certainly do not arise now, with the decision to take on the historic properties and the national monuments.

Chairman

How can the building maintenance service retain current staff numbers if it is reducing its current level of operating by one third? Has the Office of Public Works prepared a blueprint for the redeployment of these human resources? You have indicated that you are talking about the ten action points when implemented. It is not implemented as we speak.

Mr. Benton

Some of it has been implemented. Other parts are ongoing and will take a longer time because of the circumstances involved.

If I could answer the second point of your first question, we do not envisage any redundancies. The bulk of the work carried on by the building maintenance service is in respect of properties which are exempt from charges. We will be confining the existing workforce to those properties. I appreciate that this can be quite complex but, generally speaking, we are talking about the properties around the Government Buildings complex, including Leinster House. I am talking about all of the cultural institutions such as the library, the museums, the galleries and so forth. A significant amount of our time at present is spent on those buildings, and the workforce is declining.

Chairman

Is it not an admission of defeat by the Office of Public Works to say it is downsizing and that it has decided to throw in the towel on the BMS without properly costing the alternative service delivery method? Has the alternative been costed? Are you throwing in the towel on a system which was improperly run?

Mr. Benton

The Comptroller and Auditor General mentioned our focus in trying to be commercially minded. We are trying to get the best bang for our buck. We are trying to get the most attractive commercial rates into the service and maintain at the same time our existing skilled workforce. We have some exceptionally skilled people, particularly in the restoration area. The private sector cannot, necessarily, supply those. There is a balance in retaining what is absolutely necessary to maintain a high quality service and good value to customers and, at the same time, adopting the best of the private sector in terms of routine maintenance in the standard office block buildings. That is the objective we are trying to achieve. It will be monitored very closely by the office and we will review our position at the end of the pilot period.

Chairman

The Comptroller and Auditor General commented on the fact that the Office of Public Works is contemplating this decision at a time when a number of large Irish companies and other public administrations are reducing the level of devolution of responsibility for maintenance and returning to more centralised arrangements. The Office of Public Works is doing the reverse of what is happening at the moment.

Mr. Benton

We are trying to get the best of both worlds. We believe there is significant benefit to the Office of Public Works, and ultimately to the taxpayer, in going down this route. We are retaining responsibility for the historic properties such as Dublin Castle, Farmleigh, Áras an Uachtaráin and Government Buildings and the cultural institutions. At the same time we are conscious that there are many service providers in the market who can provide commercially attractive rates to do routine maintenance work. We are trying to establish what is the core business of the Office of Public Works and to dedicate the special skills we have to that core business.

Chairman

Why did the Office of Public Works memorandum contain no cost justification for its proposal for the BMS?

Mr. Benton

I am not aware that it did not contain a cost justification. What we are doing is going to the market to establish the rates. We are satisfied that we can get an attractive rate from the market, bearing in mind that most of this work is carried out by the private sector anyway on the buildings which we propose to use for the draw down contracts. The bulk of the work we carry out at present is in relation to exempt buildings. That is not going to change. It is the margin of work that we carry out on non-exempt buildings that will be addressed by this draw down contract.

Chairman

Is it not a fact that this work can cost more? It is going to be a lot less work for the Office of Public Works to administer the scheme from which it is getting revenue. Are you shelving this as an easy option?

Mr. Benton

No. It is trying to address a growing work load with diminishing resources, in terms of staff and money. We believe the system we are proposing gives us the flexibility to best manage that.

Chairman

Has the Office of Public Works produced costings for the building maintenance proposals since the publication of the VFM report?

Mr. Benton

I am not aware that it has, Chairman, but I will check that out.

Chairman

I am disappointed that you came here indicating that everything was fine and with a ten point plan which has not been implemented. It is as well to call a spade a spade.

Mr. Benton

I mentioned ten points and you would have to concede that a number of them have been implemented. That partly explains why we have turned a loss into a profit in 2002.

Chairman

I will question that later. The level of questions that have been asked this morning gives me no reason to believe that research was done as to how that was done. I will question that at a later stage.

Deputy Connaughton

I am a new member of this committee. I have always acknowledged the outstanding contribution made by the craftsmen and craftswomen of the Office of Public Works. That is acknowledged throughout the country. However, we are here on a value for money basis. That is our remit.

I have looked in great detail at the C&AG's report and I have seen some remarkable messing. We did not invent the wheel in the last year or two. There were very strict guidelines in the world of business which one would have assumed the building maintenance service would have adopted, and not just because the C&AG got involved. This should have been done in 1998, 1999 and 2000. I cannot understand that this unit would do work and send a bill to another Government Department and that the bill was either not sent, not received or not paid. That is what the C&AG found. No commercial identity at any level in Irish business would go along with that. It is one thing to do work but surely someone knew where the work was done, the value of the work and that someone had to pay for it. That did not happen. Until the Office of Public Works comes back next year to report on its ten point plan this committee will have to accept that there does not appear to have been a great change. The Office of Public Works has an awful lot of proving to do. I wish to take Mr. Benton through a hypothetical scenario because one can become mixed up with systems and regimes. Suppose, for instance, a roof collapsed in the Department of Education and Science or the Department of Health and Children, and the Office of Public Works was sent for? I assume that normally the damage would be evaluated along with the danger posed to people working there. More importantly, however, I presume that the actual cost of repairs would be estimated but due to the lack of a public tendering system, it is an in-house business which amounts almost to a cosy family set-up. From a west of Ireland perspective, the only way I can describe it is that there is a touch of the mother hen about it. Can I take it that in that hypothetical case the roof would be repaired and that the bill might or might not be sent to the Department concerned? Even if it was, nobody would follow it up to see why it was not paid.

In one of the years in question there was a turnover of €11 million or €12 million, so I cannot understand how the Office of Public Works could actually lose €4.3 million. In other words, one third of the turnover was either not billed or, if it was, nobody collected it. The Office of Public Works may say that the money was not lost but the Department had to pay for it with taxpayers' money and it is the committee's role to scrutinise such payments. It is not a great scenario and it does not demonstrate the existence of a real business environment within the Office of Public Works. I would like Mr. Benton to comment on the points I have raised, which go to the source of our endeavours. I have a few other questions that I would like to raise later.

Mr. Benton

I am not here to defend the indefensible. The computer system failed us and the Deputy is quite right in describing the collection of bills as inefficient. In some cases we were undercharging and in others we did not collect what was due. That has been addressed.

Deputy Connaughton

Did the Office of Public Works know the job was done?

Mr. Benton

Yes, we knew it was done but it was not being recorded in the new computer system. We have not taken these actions because of the Comptroller and Auditor General's report - they were ongoing. We were certainly aware of the shortcomings highlighted by the report's analysis but it is a useful contribution to us in our ongoing discussions. I wish to make that point clearly, although we were not waiting on the report before taking action. Initially, there was significant reorganisation. It is partly because of our determination to become commercially minded that we are producing accounts - albeit notional ones in some cases - which will demonstrate to us whether we compare well with the private sector. One has to take the good with the bad. The accounts for that year reflected a problem which we are addressing. That is the current position.

Deputy Connaughton

Mr. Benton showed this in the year 2000 accounts, for instance.

Mr. Benton

Yes, we published this.

Deputy Connaughton

For 1999, 2000 and 2001.

Mr. Benton

No, we showed the accounts for the year 2001 and it arose out of the annual report for 2000. We published the accounts and are happy to continue to publish them, warts and all, until we get it right and until we can demonstrate to our own satisfaction, as well as to the world, that we are competing on a favourable basis with the commercial sector for the work we do that can be measured against the private sector.

Deputy Connaughton

I have just two more questions, Chairman.

Chairman

Just one second, Deputy. Mr. Purcell, do you wish to comment?

Mr. Purcell

Not at this stage, Chairman.

Deputy Connaughton

I have just two more questions.

Mr. Benton

Deputy Connaughton mentioned the emergency work on the roof and this is one of the important issues for the building and maintenance service. If the roof fell in, initially they would not go through the process of obtaining quotations and competitive quotes - they would do something to sort out the problem and then they would try to address the issue of charges. That is the value of having one's own direct labour force available to respond to emergencies. I would be disappointed if I thought they were putting advertisements in newspapers for contractors to stop a roof from falling in.

Deputy Connaughton

On that point, we are all fully aware of the demarcation issue in labour relations. Is it true that there are significant demarcation problems within the Office of Public Works?

Mr. Benton

I do not think our organisation is unique within the public service.

Deputy Connaughton

Yes.

Mr. Benton

As I said, however, it is an objective of ours to introduce multiskilling because demarcation is not an efficient way of discharging responsibilities. We would certainly like to see a breakdown of demarcation and, as I mentioned, there has been some easing of that. We are producing some semi-skilled people who are able to manage hoists, driving, scaffolding and other skills. I would not try to pretend, however, that it will be easily achieved.

Deputy Connaughton

There is no question of a row about who installs an electric light bulb?

Mr. Benton

There will continue to be rows about demarcation until there is agreement with unions throughout the public service on the issue of demarcation.

Deputy Connaughton

To what extent has the Office of Public Works adopted the recommendations of the Murray report? Can Mr. Benton give some indication of what new market partnership is currently involved with the building and maintenance unit? Is that an effort to privatise it or what is their particular role in the business?

Mr. Benton

The involvement of the independent auditors is to try to help us analyse what precisely is happening with many of the issues highlighted in the Comptroller and Auditor General's report, including downtime, sick leave and average costs. So, it is to help us to get the management information we need in order to effect improvements. It is not a question of privatising; it is simply using outside resources that we do not necessarily have in-house. Sorry, Deputy Connaughton asked another question?

Deputy Connaughton

The Murray report.

Mr. Benton

Virtually all of the Murray report has been implemented, including all the key recommendations concerning how the business should be structured. There are recommendations on operational issues, including multiskilling and demarcation, which will take time to resolve.

Chairman

Just before I call Deputy Ardagh, I wish to follow up on Deputy Connaughton's question. The 1998 consultancy review of the Office of Public Works set out a number of recommendations for specific operational and organisational changes for the building and maintenance service, the BMS. The Comptroller and Auditor General's examination found that the organisation of the BMS was changed but most of the report's recommendations on operational changes were not adopted.

Mr. Benton

The point I was making was that virtually all of the recommendations in relation to the management structure have been adopted, but there are recommendations in relation to operational issues which for different reasons we have not been able to implement fully. However, some of those recommendations involve things like multiskilling, which will require negotiations and agreement with unions.

Chairman

That report also called for the urgent development of a comprehensive strategic plan for the BMS. What has happened with that?

Mr. Benton

We have been actively involved in it, Chairman. One of the principal recommendations to come out of that review concerns draw-down contracts. Therefore, the matter has been actively pursued and we are making significant strides, which is acknowledged in the report.

Chairman

I would have to disagree because the review called on the Office of Public Works's senior management to articulate a clear mandate for the BMS. The Comptroller and Auditor General's examination, however, confirmed that such a mandate has not been provided for the BMS.

Mr. Benton

We can debate that matter, Chairman. The point I am making is that we have adopted a new direction for the BMS. It is a combination of draw-down contracts for the standard offices and confining BMS work to the exempted buildings. That is a strategic move.

Chairman

Where is the plan that was recommended by the Murray report? According to Mr. Purcell's findings, the bulk of that plan was not implemented.

Mr. Benton

I am sorry that I have to disagree with you on that, Chairman. The bulk of the plan was implemented, including all of the key recommendations in relation to the structure proposals. However, there are recommendations in relation to operational issues which will take time to implement.

Chairman

How can you say that a plan has been implemented when the main operational structures have not been implemented?

Mr. Benton

The management structures have been implemented. We have amalgamated the two kinds of leadership posts that existed previously into one post. We have put a management committee in place to oversee the day-to-day operation. We have rationalised the districts. We have rationalised the grades and we have draw-down contracts for supplies. They are all the principal recommendations and they have actually been carried out.

Chairman

Mr. Purcell's report is a substantial document and is a total contradiction of what you are saying this morning.

Mr. Benton

I do not think it necessarily is. I am saying the structural recommendations, the key recommendations, have been implemented. There are recommendations in relation to the operation of the business, which have not yet been implemented, and I have highlighted some of those.

Chairman

I am not impressed.

Deputy Ardagh

From the report it appears to me that the most comfortable sinecure in the public service is a member of either the management or staff of the building maintenance service in the Office of Public Works. Based on what was said today that service is pulling back to confine the workforce to exempt properties. This appears to further cushion the staff from competitive forces within the services industry. It was mentioned that Dúchas would absorb staff. Surely there is staff there at the moment. It does not appear logical that Dúchas needs further staff just because the Office of Public Works is taking it over.

The Comptroller and Auditor General mentioned that competitive forces were operating between the BMS and private sector providers only to a limited extent in the period from 1998 to 2001. There appears to be a laid back and comfortable approach. I accept, as Deputy Connaughton said, it is important to maintain the skills of some of the craftsmen such as the stucco plasterers. However, this is a highly critical report. Have significant changes representing a quantum leap taken place in the last six months?

Mr. Benton

I believe there have been. If I could just take the point about the sinecure, I think the report also reveals that the output of the building maintenance service has actually increased during a period when staff numbers were coming down. I think that is worth acknowledging. The second point in relation to the surplus staff is that at the moment we do not have planned and programmed maintenance generally in place for our buildings. We have for the services end of things. However, for the fabric of buildings we do not. If we go down that road, it will take a lot more resources to actually manage it and that is the direction we are heading. Rather than addressing the leaking roof when it leaks, we are going to have inspection. We will be doing the updating and planned programme maintenance.

The reductions that have taken place together with the planned reductions over the next three years will leave us in a good position. We will continue to review it and if there is surplus staff we will have to find ways of addressing it. However, the output of the service has increased and, as I said earlier, so has the profit.

Deputy Ardagh

Mr. Benton says that the Office of Public Works has not set out exactly what maintenance is to be incurred on the various buildings. In 1994, the Department of Finance asked the Office of Public Works to inspect all Government property at least once every two years and to provide for the occupiers a comprehensive maintenance schedule setting out in detail and in order of priority the maintenance works which should be carried out and to carry out that work for the occupiers on a full repayment basis provided that the work can be carried out more efficiently and cost effectively by the Office of Public Works than by using a private contractor. There are three tasks: to inspect all Government buildings; to set out a schedule of works that need to be done; and effectively to bid for the work. How has the Office of Public Works done on those?

Mr. Benton

We have carried out very detailed inspections on these buildings. That process is about 80% complete. It should be looked at in the context of the total number of buildings. We have close on 2,000 buildings. To do a planned maintenance programme and to produce the manuals and documentation that will have to be adhered to is quite a time consuming task for close on 2,000 buildings. However, that is virtually 80% complete. That is the road down which we intend going with the BMS staff in the exempted buildings once the draw-down contracts are in place. However, there are issues and I will not try to minimise them. Adopting planned maintenance brings a cost. We will carry out the planned maintenance in so far as our resources will allow us.

Deputy Ardagh

Every person who comes before us blames the computer systems. If garbage is put into a computer, garbage will come out. The competence of people performing the computer functions is questionable. The Murray report stated:

The support functions of finance and personnel should be an integrated part of the management of the building maintenance service, staffed with competent personnel with requisite skills, and operate on a full-time basis.

Of the 220 staff, how many work in the finance area and what qualifications do they have?

Mr. Benton

Can I take the computer issue first? We are not saying the computer was garbage. In fact the computer system is a very versatile system and we hope to extend its use to other areas in the office.

Deputy Ardagh

I did not say the computer system was garbage. I said if garbage is put into a computer, garbage will come out.

Mr. Benton

Yes and I would be the first to put up my hand and say there was a problem with the management of that system. Now we have addressed that. However, there was a problem.

Deputy Ardagh

Mr. Benton was blaming it on the computer system originally.

Mr. Benton

No, I was carefully making the point that it is not the computer system.

Deputy Ardagh

Let us move on from there. How many staff does the finance function have?

Mr. Benton

Is the Deputy asking about the finance function within the BMS?

Deputy Ardagh

Yes.

Mr. Benton

None. There are different ways of approaching this. I do not necessarily agree with the recommendations in the Murray report. I have to manage the finance function and the human resource function for the whole office. I have to determine how that is best done. We have a central finance and human resource function which provides a service in respect of all the business units in the office. We do not have finance and personnel people in our architectural service, project management service or maintenance service. It is a centralised function to all of them. However, we have put in place support systems now which will ensure that the computer system is properly managed and we can draw down the kind of management information that we need which will highlight shortcomings such as those identified in the report.

Deputy Ardagh

If there was a job of painting this room, how would the Office of Public Works calculate the time required, the cost per hour and the bid? Who would calculate that?

Mr. Benton

The service managers in the appropriate district would come in, measure the room and say what the cost would be.

Deputy Ardagh

What is the hourly charge out rate for a painter?

Mr. Benton

I do not have that information off-hand.

Deputy Ardagh

Or a general operative?

Mr. Benton

We are operating now on the standard commercial rates for that. I would be happy to supply that information if the Deputy wants it.

Deputy Ardagh

The whole problem is a question of full costing. If all the support services needed for the BMS are not fully costed into any bid for the work to be done, the whole system is not operating on a full cost basis. This means the Office of Public Works is deceiving itself into thinking the cost for a job is limited to the cost of wages. Are any systems in place and, if so, who operates them? Who is responsible for ensuring that a full cost basis is used for any job that is bid for on a competitive basis - for example, a Garda station or the courts?

Mr. Benton

I take the point. We have been improving, maybe modestly. Today, many of the overheads are included in the charges. The Deputy asked me who oversees this. We get advice from our independent accountants on what should be apportioned by way of overhead charges and on the space we occupy and the energy we use.

Deputy Ardagh

Is Mr. Benton saying there is not one cost accountant doing the job of financial cost management in the building maintenance service, which has a staff of 220?

Mr. Benton

No.

Deputy Ardagh

That is a deficiency that needs to be looked at.

Mr. Benton

As with all our services, we outsource, take in and buy in the requisite skills as necessary. That is one skill that we buy in at present.

Deputy Ardagh

Buildings like Dublin Castle, Government Buildings, the Royal Hospital in Kilmainham and others are fabulous. They involve a huge cost but they are worth it.

Chairman

Why has the Office of Public Works failed to employ a qualified accountant to carry out the finance functions of the BMS since November 1999? How much has the Office of Public Works paid Newmarket Partnership Ltd. in consultancy fees since April 2002 to provide a limited advisory role in relation to BMS financial matters?

Mr. Benton

I do not have that information to hand but I will gladly supply it to the committee.

Chairman

The BMS examination found that while data entry appears to have been operated satisfactorily, performance reports generated by the system are incomplete and unreliable. Recognising these deficiencies, the Comptroller and Auditor General's staff prepared a revised set of financial statements during the course of their examination. Is this unprecedented?

Mr. Purcell

It is hard to say if it is unprecedented. It was certainly unusual. At the time, the data were all available but the organisation did not have the software and the expertise needed to exploit the software possibilities. We used our own expertise and computer interrogation software to produce the data in question. This gives a more realistic view of the financial operations of the BMS over the four year period.

As I alluded to in my opening remarks, I have a general problem with the concept of notional income and matching it with notional expenditure. Certainly, these activities have to be costed to make a judgment on how economical is the delivery of the service. However, I do not know whether it is right to mix it up with what one is doing on a quasi-commercial basis. There are dangers of mixing apples and oranges in that scenario. As I understand it, the notional profit for 2002 is calculated on the basis of mixing apples and oranges. It comes with a health warning.

Mr. Benton

I understand why this is difficult from an accounting point of view. However, in terms of management and trying to benchmark what one actually does as distinct from what one is actually paid for, it is important to break down the costs associated with all individual activities. It is just as reasonable to include actual costs as notional costs in these circumstances in which we are providing a service. From our point of view going forward, we have to know how efficient we are compared to the private sector. That is the purpose of having notional figures. I take the point that it comes with a health warning and understand the difficulties in terms of normal accounting practices. However, it is absolutely vital in terms of management.

Chairman

The Murray report recommended that the BMS introduce new streamlined materials purchases control procedures to replace its central materials stores. If this system is operating well, why has there been such a dramatic increase in the value of materials used per hour between 1998 and 2001?

Mr. Benton

I am not certain and will have to consult my colleagues, who have more information on this matter. However, the system is in place and it is working very well. One aspect of the issue concerns the nature of the work and the volume of the work carried out. I want to check the details.

Chairman

In the same period, the increase in the prices of building and construction materials was 11% while the value of materials used per hour charged to jobs increased by 77%.

Mr. Benton

Very significant work was carried out. This period covers the special projects carried out at Farmleigh. I would like to see an exercise carried out that would extract the Farmleigh work, which was once-off and specialised, from the figures to be sure we are comparing apples with apples.

Chairman

All BMS maintenance jobs are assigned to specific tradesmen. The 1998 report recommended that the BMS should have all operational personnel trained to some degree in some specific skills. Why has this not been done?

Mr. Benton

Again, we must consider the multi-skill issue. It is not straightforward in terms of the negotiations that will have to be concluded with the union. However, we have made progress in upskilling a number of our workers, as I mentioned in my response.

Chairman

The Comptroller and Auditor General's analysis of the utilisation of BMS tradesmen and general operatives found that downtime amounted to just over 20% of working hours. This figure has remained constant in spite of some restructuring in the organisation. Downtime amounted to 47% of working hours in the north central district over a period of 37,000 hours, as shown in figure 3.6.

Mr. Benton

We had a system of measuring downtime which was not the norm in the industry. We have changed it and the downtime has been improved significantly. For example, travel to and from jobs was always considered downtime, as was preparing for a job. As the Chairman knows, this is regarded as contributing to the actual work in the industry.

Chairman

Why is the downtime as high as 47% of the total number of working hours in the BMS when it was just 12% in the Oireachtas?

Mr. Benton

There are variations across all districts and I cannot give the Chairman a straight answer to that.

Chairman

The level of overtime working by the BMS is substantial. Can the chairman tell the committee how much the high level of absenteeism contributes to the high levels of overtime?

Mr. Benton

Obviously, they are related but there are special circumstances in the BMS that do not apply across other services. Much of the work is carried out after hours and at weekends so as not to disrupt the normal, day-to-day operations of offices and services. That partly accounts for it. If there is absenteeism it has to be covered, particularly if one is responding to urgent or emergency jobs. There is a relationship.

Chairman

Sick leave also represents a considerable overhead for the BMS. How many working hours were lost in the BMS through sick leave in 2000 and 2001?

Mr. Benton

I do not have those figures but the rates pertaining to absenteeism and sick leave are from 9% to 10% at the moment. This is a marginal reduction on what was reported in the Comptroller and Auditor General's report. However, it is worth repeating that if one ignores the 12 employees who are on long-term sick leave, the absenteeism rate of the remaining workers is 4%. That compares well with the industry norm.

Deputy Connaughton

A level of 10%, one tenth of the workforce, is very high. What plans has Mr. Benton to combat that? He should forget about the figure of 4% because the level will remain at 10% unless he does something about it.

Mr. Benton

There is much tighter management of that now. It is in line with the normal practice in the Civil Service. We work closely with the chief medical officer and others. There is a lot of continuing contact with people who are persistent absentees.

Deputy Connaughton

What are the criteria in those cases and when does an employee on disability benefit become unemployed with the Office of Public Works?

Mr. Benton

We rely on the advice of the chief medical officer, who will tell us when a person is no longer employable.

Deputy Connaughton

I assume it is not the intention of the Office of Public Works to carry people who cannot turn up for work on a reasonably regular basis.

Mr. Benton

We must apply the normal rules, but ultimately the decision is taken by the chief medical officer. Due to the more rigorous management of this, a number of employees have already retired on the grounds of ill health.

Deputy McCormack

When there is a contract for a new school or barracks how and when is it decided to put it to tender to the private sector or carry it out internally? Is there a cut-off point in the cost?

Mr. Benton

As a general rule, all contracts go out to the private sector. The Office of Public Works does not have a huge building arm - it has a maintenance team. All new major construction is tendered through the private sector because we do not have a building workforce.

Deputy McCormack

If the Office of Public Works has to repair, for example, a school, does it test the cost of the same work carried out by a private contractor?

Mr. Benton

We do. We charge commercial rates. Whatever we do the work for is roughly what the private sector would do it for. Any significant work is tendered out because we do not have the workforce for those jobs.

Deputy McCormack

When the Office of Public Works goes to the private sector, does someone in the office oversee that work? What is the process?

Mr. Benton

The Office of Public Works oversees the procurement and the carrying out of the work on behalf of the client.

Deputy McCormack

What was the interest cost during the year when the Office of Public Works lost €4 million and how was that loss managed?

Mr. Benton

It was not an actual loss - it was a notional loss. Therefore, there is no question of interest charges. We did not receive money from other Government Departments. We had provision within our overall Vote to provide a level of service but the fact that we did not either charge or get all of the money that was due to us did not result in any interest charges. No money was lost to the Exchequer.

Deputy McCormack

How did the Office of Public Works eventually cure its difficulties with the computer system?

Mr. Benton

We brought in a new firm to manage the system because the firm we originally used was no longer in a position to provide the kind of service we wanted. The new firm has full familiarity with the product and we are so satisfied with their performance that we are seriously considering extending it to other areas of the office.

Deputy McCormack

Is that company part of what you call the "buy-in" staff?

Mr. Benton

Yes.

Deputy McCormack

Who makes the decision as to which staff are bought in? Is it cheaper to buy-in staff than to have them in-house?

Mr. Benton

There is no simple answer. We try to have a core staff in place who can handle the normal level of activity in the office. If one can manage that, it is the most cost-efficient way of doing so. However, because our work is project-based and programmable, it can increase quite dramatically. Putting a core staff in place to handle the peaks in the workload may not be the most efficient way of managing the process because, as the work dips one is left with permanent staff who are not fully occupied. We have to try and balance it all the time.

Deputy Boyle

I want to get some information on the listing of exempted buildings and the process of exemption. There seems to be much uncertainty as to what is exempted and how it is exempted. There is an initial list which seems to be exempted by a confidential circular issued by the Department of Finance in 1994 and it seems buildings may be added as determined by the Commissioner for Public Works. However, there seems to be a third category that the Office of Public Works has decided it would not charge and put in its own exemptions. Can we have clarity as to what the policy is on exempted buildings and on current practice?

Mr. Benton

I will try. There is a group of exempted buildings which do not need much explanation - cultural buildings, historical properties and so on - and included on that list is the Department of Agriculture and Food. One has to ask why a block like that is an exempted building, but the explanation is partly that it is on the campus of Government Buildings and that staff from the Department of Finance occupy the building. We have an arrangement in place for managing this campus and Agriculture House is included in it. That is as clear as I can make it. Generally, the list includes cultural buildings, historic properties, our own buildings and the Department of Finance as well as places such as Áras an Uachtaráin.

Deputy Boyle

I do not think anyone could put the Department of Agriculture and Food in the category of a building with architectural merit. Why are other Government Departments included which are not on the Government Buildings campus, such as Áras MacDiarmada - the offices of the Department of Social and Family Affairs - and the buildings of the Department of Defence?

Mr. Benton

Bus Áras is regarded as an architectural gem and it is one of our protected structures, which accounts for the inclusion of the headquarters of the Department of Social and Family Affairs. As regards the Department of Defence in the Phoenix Park, it is an important historic Gandon building.

Deputy Boyle

I understand in general terms that there is an original circular and the Commissioner of Public Works has identified particular buildings that were subsequently added to the list. However, I cannot understand the third category and how the Office of Public Works has itself decided that work would not be charged for and introduced its own exemptions for certain Dublin courthouses, Dúchas properties and so on. What were the criteria used and is thatpractice still operated by the Office of Public Works?

Mr. Benton

The courts referred to are the Four Courts, which the Office of Public Works owns.

Deputy Boyle

That is not made clear in the appendix.

Mr. Benton

I accept that. The Dúchas properties are either national monuments or historic properties.

Deputy Boyle

How widespread is the practice of the Office of Public Works making an independent decision about an exemption that does not refer to the circular of the Commissioner for Public Works?

Mr. Benton

Subject to correction, it has not arisen in my six years in the Office of Public Works. It only relates to that period. I am not aware of anything being added on in recent years other than cultural institutions.

Chairman

The Office of Public Works is itself a major client of the BMS. It also has direct responsibility for the maintenance of many of the exempted buildings that the BMS services. Does the chairman not agree that this only re-emphasises the need for a business plan for the BMS which would clarify its relationship with the property maintenance service and other Office of Public Works units?

Mr. Benton

I certainly agree with the Chairman and that is the intention. When we have the revised structure in place some time later this year, there will be a business plan attaching to the BMS which will cover all aspects.

Chairman

The results of the survey should help to inform future maintenance decisions which will facilitate a preventative maintenance system. Would this new system have detected the danger posed by the use of asbestos here in Leinster House?

Mr. Benton

That was surveyed separately. In that case, however, we would have been aware of the existence of asbestos in Leinster House and would have had a management plan in place to handle the problem.

Chairman

Who was responsible for setting the charge rates for general operatives between 1998 and 2001?

Mr. Benton

That was the BMS management itself.

Chairman

Did they take into account opinion on market rates?

Mr. Benton

The official charge may have reflected the going rates but they did not update it in line with the movement in charges in the industry.

Chairman

The revised 2002 charging structure represents a significant increase in the cost of BMS services to its paying clients and could reduce its ability to compete for business.

Mr. Benton

The experience, in fact, is quite the opposite. More and more of our clients are using BMS as their preferred service provider.

Chairman

Has the BMS reviewed its skills deployment policies for different kinds of work as recommended by the Comptroller and Auditor General in the report?

Mr. Benton

We have. The process is ongoing but it is something we are considering actively.

Chairman

In the period 1998 to 2000, €1.7 million of chargeable income due to the BMS was not invoiced to clients. This represented about 12% of the total income due in that period. Has the BMS developed satisfactory procedures for monitoring debtors and recording payments against outstanding debts?

Mr. Benton

All of those issues have been rectified.

Chairman

Has the BMS developed any procedures for enforcing debts?

Mr. Benton

We cannot enforce debts against other Government Departments, apart from threatening, as we often do, to withdraw services.

Chairman

Has the BMS commenced a policy of refusing to carry out further work for clients who owe it money?

Mr. Benton

We have threatened clients with this and they usually come around. There are health and safety issues, however, when it comes to maintenance work left undone. The relationship with client Departments is such that, according to the pattern of the use of the BMS, they are coming to us now as the service provider of choice.

Chairman

The value for money examination found that 9%, or €814,000, of the total invoiced to clients in 2000 remains unpaid. Can the chairman name the offenders in this regard?

Mr. Benton

We have very detailed information and we have sent out bills. I am not overly confident of being able to collect the money but we have details of the Departments. Not all of it was to do with the Departments themselves; some of it was the fault of the BMS for undercharging for the work. Where Departments did not pay bills, we certainly have the details.

Chairman

Are these Departments' officers not bound by the Prompt Payments of Accounts Act 1997, which states that when making payments for work carried out by the Office of Public Works or on an agency basis——

Mr. Benton

I only wish they were.

Chairman

Are they not?

Mr. Benton

No.

Deputy Fleming

The entire report deals with the Dublin operation. What proportion of the total operation does this represent?

Mr. Benton

We have a very small number of people in BMS office in Cork city. Of the total, probably around 4% or 5%——

Deputy Fleming

So most of the operation is based in Dublin.

Mr. Benton

It is mainly Dublin - around95%.

Deputy Fleming

Page 23 of the report refers to the question of bad debts. In 2001, there were €325,000 of bad or doubtful debts and over the four-year period this represents a figure of €1,139,000. Given that the BMS was undercharging or not charging at all, how can it be that these are reputable values for bad debt? Are the bodies now refusing to pay for the reduced bill they got in the first place?

Mr. Benton

We have difficulties collecting the outstanding money - I would not try to minimise that. We did actually stop work in one or two areas for a certain amount of time until the situation was addressed.

Deputy Fleming

I notice that this is specifically referred to——

Mr. Benton

To amplify that, we own the properties and are responsible for maintaining their value. If we do not carry out work and nobody else does either, this can ultimately come back as a charge on ourselves, so there is always a judgment call to be made.

Deputy Fleming

The BMS may ultimately have a responsibility for the building.

Mr. Benton

Yes.

Deputy Fleming

Page 35 of the Comptroller's report mentions that BMS's market share, so to speak, of the maintenance work carried out by the various bodies seems to be about 20%. Do the other bodies ever talk to the BMS about its rates, compared to the 80% they are dealing with in the private sector?

Mr. Benton

We use independent advice when it comes to market charges. In many of those cases we employ the people on behalf of the client Department, so we are aware of their charges.

Deputy Fleming

I refer to the section on finance in the statement that was presented to us today by the BMS. It states: "The charge-out rates applied by the Building Maintenance Service for its services to paying clients were increased from January 2002 in line with commercial rates." The report also mentions the rate that was being charged prior to this and the increase that would be needed to bring it up to the estimated full cost recovery rate. How does the full cost recovery rate compare with commercial rates in the private sector? Are they the same thing?

Mr. Benton

They mirror each other.

Deputy Fleming

On the losses that were incurred, the report states:

This is now being addressed and bills have been sent out for 2002. In 2002 a figure of €948,000 actual loss was turned into a notional profit of €1.26 million by increasing charge out rates.

I do not understand this at all. How can it be turned into a notional profit?

Mr. Benton

The way it is stated there is somewhat confusing. It means that the loss from the previous year turned into a notional profit for 2002. It could have been clearer.

Deputy Fleming

I am concerned with the concept of notional profit. I am a mere accountant and I do not understand it.

Mr. Benton

The notional profit reflects activity. We have to be able to measure activity.

Deputy Fleming

That is an internal accounting exercise.

Mr. Benton

Yes.

Deputy Fleming

It should not appear in external reports. It is an internal management tool.

In that section, it is also stated:

A criterion previously used was for strict charging of time actually used on the job. Heretofore all works requested by client Departments were carried out on demand and only in exceptional circumstances were quotations sought. Quotations are now being issued in respect of all jobs where requested.

I am curious about the last sentence. Does it mean that even now, if somebody does not request a quotation, none is sent out? Standard practice should be that even if a quotation is not formally requested, the company should prepare and issue one.

Mr. Benton

I agree with the Deputy. At the moment——

Deputy Fleming

In other words, if a client seeks a quotation one is issued while if he does not, none is issued. That is not the way the Office of Public Works should run its business. It should have a standard practice regardless of what the client requests.

Mr. Benton

Yes. This is an interim arrangement; during the course of this year we will achieve what the Deputy is talking about.

Deputy Curran

I listened with interest to Mr. Benton's reply about the bad debt scenario. He seemed to say that the only sanction he has for bad debts, despite these all being Government Departments or State entities, is to withdraw service. He then said that he could not do that because the Office of Public Works owns the buildings and would have a liability. The issue is hanging in mid-air and it is inevitable, therefore, that it will carry forward. Are there ongoing disputes between Government Departments that are saying "this is an Office of Public Works building and it is the landlord's responsibility"? Is that the nature of some of these debts? It is unsatisfactory that there is a procedure in place that is not working.

One would have thought that Departments would have honoured their debts if they viewed them to be proper. I cannot accept this. Deputy Fleming mentioned the year on year figures and there is a bad debt every year and there is no reason to expect it not to carry forward.

Mr. Benton

The Office of Public Works, through the building maintenance service, would accept some responsibility for the bad debt situation. We were not always able to give Departments the information they needed to make a decision on how much was due, but that does not account for all of it. There was confusion but it has been addressed and with the call-off contracts in place, money will no longer flow in a circle between Departments. We will focus exclusively on exempt buildings. The new call-off arrangements will have detailed accounts going to individual Departments which they must pay to the contractor. We have taken ourselves out of that payment loop in relation to those buildings.

There was a problem and we used the only tool we had available to us, the withdrawal of services. We did that on a couple of occasions with a couple of Departments. If, however, there is a serious problem or an emergency, we have to attend to it and we cannot rely on the fact that we have withdrawn services - it is our building at the end of the day and we have to make good the structural damage.

Deputy Curran

So most of these debts are not bad debts in the true sense where someone is refusing to pay, they are disputed debts because the Office of Public Works did not go into the detail of what was involved.

Mr. Benton

Some of them are people refusing to pay and others are people not having sufficient information to justify payment.

Deputy Curran

Is it being clearly stated that there are Departments that have no dispute about the work done or the invoice value but are just saying they will not pay?

Mr. Benton

That has happened in the past.

Deputy Curran

Would it be possible to furnish the committee with details of those cases?

Mr. Benton

I would be happy to do that.

Deputy McGuinness

Is there a qualified person in the human resource section of the Office of Public Works to deal with this? In recent times the staff numbers have dropped from 254 to 222. Have any staff moved from Dúchas to the Office of Public Works?

Mr. Benton

No, but we are about to embark on negotiations about the transfer.

Deputy McGuinness

Have some staff from Dúchas moved to the Office of Public Works in Dublin or the rest of the State?

Mr. Benton

In the normal course of affairs there are transfers of staff between all Departments. I would not be aware if anyone had come from Dúchas to the Office of Public Works, no more than I would be aware if Office of Public Works people had gone to the Department of Health and Children. There is the normal mobility but there has not been a block of work with attached staff for which we have taken responsibility in the recent past.

Deputy McGuinness

But there might have been casual transfers?

Mr. Benton

There may have been individuals moving at times but it would not be a significant issue.

Deputy McGuinness

Are purchases made by way of three quotations in almost every job that is undertaken?

Mr. Benton

As a standard yes, but there will be circumstances where that is not possible. If the roof is falling in, it may be a question of getting a contractor who can respond quickly or getting two or three to look quickly at a problem and give a quotation. Emergency situations are exceptional. In general, there is a minimum of three quotations.

Deputy McGuinness

Even in an emergency, would a job be costed?

Mr. Benton

Absolutely.

Deputy McGuinness

What about the qualifications of those in human resources?

Mr. Benton

We have a central human resource division with the Office of Public Works that supplies a service to all of the business units, including the BMS.

Deputy McGuinness

Are the staff qualified in that area or are they people who have worked their way up through the system?

Mr. Benton

Generally, as in all Departments, there are people who have worked their way through the system but who have spent a long time in industrial relations and have done further qualifications in the area of human resources.

Deputy McGuinness

So they all have some form of qualification?

Mr. Benton

I would not say they all have a qualification but those at senior level are all experienced and, in a sense, that is the qualification. A number would have done other professional courses.

Deputy McGuinness

Do Office of Public Works employees still use the 1999 handbook which outlines allowances? Is it updated in the context of increases in various areas and will it apply to staff coming in the future?

Mr. Benton

We have a handbook that covers all aspects including those the Deputy mentioned. It will apply to everyone.

Mr. Purcell

To take up Deputy Curran's point about the bad debts, it is symptomatic of the lack of formality that can work well for both sides in a customer relationship but it illustrated that in many cases there was no business relationship. That must be put in place as we move forward.

Deputy Fleming mentioned the lack of estimates and asked how efficiency can be achieved in such a situation. That was at the heart of our approach to the issue. As they say in the butter advertisement, "it is part of what we are," but it was not conducive to efficiency.

At the risk of sounding like the bean counter from hell, I will take up the matter of notional profit again briefly. I was not for a moment suggesting that inputs should not be costed, particularly in a monopolistic situation, where there is a captive base. It is all the more important to know what the costs are and to keep an eye on them in such a case. It is a bad idea to mix up notional profit with actual profit. It is acceptable to do it internally but I subscribe to what Deputy Fleming said. I would be concerned if the committee thought I was suggesting costs should not be monitored very carefully. I am suggesting the opposite.

Mr. Benton

I take on board and agree with what the Comptroller and Auditor General is saying. Under the draw-down system there will be a very structured and detailed contractual arrangement in place with all the Departments during the course of the year.

Chairman

Mr. Quigley, are you happy with the costing arrangement?

Mr. Quigley

We are very supportive of what the Board of Works is doing. It is a progression of the situation that pertained a number of years ago. Considerable improvements are in hand at present and we are liaising with the office to ensure the various improvements will continue.

Chairman

Before we note the report, I should point out that while much has been done, much remains to be done.

Deputy Fleming

That is what we said last summer.

Chairman

A lot done and more to do. It is a clear marker for the future. Is it agreed that the committee can dispose of this issue? Agreed. I call on Mr. Purcell to comment on Vote 10 and Vote 44.

Mr. Purcell

Deputies are aware of what is contained in both Votes, so I will not detain them by outlining what is involved. There is relevant correspondence in connection with the Office of Public Works, including correspondence from the Accounting Officer of the Department of Finance and the Accounting Officer of the Office of Public Works. It relates to property, especially unoccupied property procured by the Office of Public Works on behalf of the Department of Justice, Equality and Law Reform for the purpose of housing asylum seekers and so on. The committee expressed a wish to explore that issue.

Chairman

In 2000, the Office of Public Works spent €21 million on seven properties to accommodate asylum seekers, but recent newspaper reports indicate that two of these properties, valued at €12 million, are vacant as a result of action taken by objectors. Worse, the Office of Public Works must pay hundreds of euro in security costs for these houses every day. What are its future plans for Brock House, Donnybrook, and Lynch's Lodge, Macroom, County Cork?

Mr. Benton

These properties were acquired for the purpose of accommodating asylum seekers. However, both are the subject of judicial review proceedings. They have not been used by the agency, they are vacant and we must secure them.

Chairman

Is it the case that security costs approximate to €500 per day?

Mr. Benton

I will need to check that, but I understand it would be of that order.

Chairman

Why have the properties not been sold?

Mr. Benton

We will act on the instruction of the Department of Justice, Equality and Law Reform. Where it is satisfied it does not have a future use for those properties, they advise us to dispose of them. The Devereux Hotel, Rosslare, is one such example. It is for sale at present. We await instructions in relation to other properties.

Chairman

What advice was given before these properties were purchased regarding valuation and difficulties with a resale?

Mr. Benton

The advice would have been that the properties were suitable for the purpose for which they were intended to be used. We would have operated them on the basis of legal advice we had obtained on planing permission. That sanction is being challenged through the courts process. We are not involved in leading it, but we support the Department in its discharge of its functions in that area.

Chairman

What is the timescale for the resolution of these difficulties?

Mr. Benton

We are waiting for fixed dates for the proceedings.

Deputy Connaughton

The report indicates that the Office of Public Works secured a good rental income from the communication masts located in Garda stations. What is the relationship, uneasy or otherwise, between the Garda, the Office of Public Works and the many community groups that do not want to see these masts in place? I appreciate that the Office of Public Works are only partly responsible for this area. Is it the case that events have proved that Garda stations were the only suitable locations for the communication masts? How does this impact on the Office of Public Works?

In 2001 there was an ongoing investment of €10 million on Farmleigh. A sum of €1 million has been earmarked for 2002 or 2003. Is that for maintenance and will this cost €1 million a year? If not, what are the maintenance costs?

According to the report, someone received a payment of approximately €2,000 for what is termed exceptional performance in respect of the foot and mouth disease outbreak in 2001. What kind of performance was it? Where does the new, recently announced, Department of Agriculture and Food district livestock office at Galway fit into the Office of Public Works's future building programme?

Mr. Benton

Some of the information relating to the questions raised by the Deputy is being checked. The special foot and mouth disease payment was made to our engineer in the Cooley peninsula who worked around the clock during the crisis.

Deputy Connaughton

We wish him well and we send him our gratitude.

Mr. Benton

The figure for Farmleigh would not be the average maintenance charge. It includes the cost of the development. We call it the boathouse. Farmleigh has proved so successful with the public that there was a demand for teas and so on. We have furnished a facility which has mixed uses, including refreshments for visitors.

Deputy Connaughton

What is the expected annual cost?

Mr. Benton

Realistically, approximately €400,000 to €500,000 per annum. It is a big estate, comprising approximately 80 acres. There are a number of buildings, including housing. There are regular major events and functions which must be factored in. The maintenance comprises more than the normal requirements for a house.

Deputy Connaughton

The taxpayer will foot the bill of approximately €500,000.

Mr. Benton

Yes. However, more than routine maintenance of the fabric is required.

There have been problems with the erection of Garda masts in some stations. It is generally managed by the Garda authorities and the Department. We execute the works. We are not unaware of the issues. They have been resolved in some instances, but in others, progress has not been so rapid in view of local community reaction. Generally my experience in the recent past has been that there is more of an acceptance of them and we are meeting less and less hostility towards these developments.

Deputy Connaughton

What about the building programme for the new livestock office in Galway announced by the Department of Agriculture and Food recently?

Mr. Benton

I will have to check that issue and come back to the Deputy. It is not in the programme with which I am familiar.

Deputy Connaughton

I did not think it was.

Deputy McGuinness

I want to get back to the purchase of the properties around the country and the expenditure of €21 million. I want to understand from the Office of Public Works the method by which these properties were purchased. We know the stated reason for these properties. For example, when the Office of Public Works is asked for advice on the purchase of the properties, is it a question of, say, the Department of Justice, Equality and Law Reform asking the Office of Public Works to purchase a property in Wexford, Kilkenny, Dublin, or Carlow and that the Office of Public Works would spend X amount on a property and that is the extent of its involvement? Would the Office of Public Works turn to the Department that asked it to purchase a property and say it may have a problem or there may be a problem in regard to the property?

I will give the example of the two properties in my constituency. It appears from the report we were given that the indications were pretty clear during the purchase of these properties all over the country that there was going to be an issue regarding planning or the legal process and how the order from the Minister was made. That is borne out by the purchase in March 2002 of the property in Kilkenny which led to a judicial review in June in Dublin and October 2000. Legal action was taken in these cases regarding the purchase and still the Office of Public Works purchased the properties. Having purchased the properties they remain idle. A court case is pending in each case. I assume the properties have been run down or has the Office of Public Works maintained them? If so, what was the cost of maintenance and security in respect of each property under its control? What is the cost of public liability regarding each of those properties? Has the Office of Public Works advised the single Department in question that it has a problem because it must have a problem regarding the costings? Has the Office of Public Works at any stage, since the purchase of the properties, brought that matter to the attention of the Department? I am particularly interested in two locations.

It is incredible how the deal in Kilkenny seems to have been done. In a separate note from the Office of Public Works we are informed that the property is on licence at €184,000 per annum which, I understand, is currently being paid. Perhaps Mr. Benton can clarify if it is being paid? If it is being paid, the property is not in use; it is vacant. The note also states that in excess of €2 million worth of material is currently being stored. Is that an open-ended contract in terms of storage and, if so, will it be covered completely by the Office of Public Works? Underlying the report is one of the great scandals of our time regarding the purchase and use of property by the State. I have other questions but I would like to hear the answers to those.

Mr. Benton almost dismissed Myshall. It was purchased to accommodate asylum seekers, it is not occupied and subsequently it was transferred to the Department of Health and Children, as if that was the end of the problem. Mr. Benton and I know that is not the end of the problem. It is still not in use and negotiations are still ongoing. What will happen to that building?

Mr. Benton

In relation to Kilkenny, we have rented the properties concerned at the figure mentioned, €184,000, on a six months basis initially. After the licence period a lease for four years and nine months would kick in if we go ahead and use it. That reflects a fair rental value for the property concerned and we would have advice to that effect. As regards the materials that were purchased by the contractor, that contract has been abandoned and the contractor has been suspended and paid off. There are no further amounts owed to the contractor. Meanwhile the actual materials are in storage and we have been able to use some of them. Pending the outcome of the court case we are not in a position to form a view, that will be a matter for the Department of Justice, Equality and Law Reform.

Deputy McGuinness

May I have clarification on that issue? As I understand it, Mr. Benton has said the Office of Public Works is paying €184,000 per year for a piece of land in Kilkenny that would not get planning permission, as stated by the local authority, and yet the Office of Public Works is still paying it without having one block on that site. It is not a serviced site and the Office of Public Works continues to pay €184,000 for it. Mr. Benton said the Office of Public Works pays that amount for a six-month period and then it kicks into a lease.

Mr. Benton

A six-month period initially.

Deputy McGuinness

The Office of Public Works must now be in the lease period.

Mr. Benton

The lease has not been exercised yet.

Deputy McGuinness

In the interests of the State, would it not be important for the Office of Public Works to cancel its arrangement because it stands to lose almost €2 million? It has been abandoned at a cost to the State of in excess of €2 million. There is a further cost because the Office of Public Works is currently paying storage costs on the €2 million worth of equipment or buildings or whatever else is there and it still persists. Has the Office of Public Works received advice? Even in commercial deals regarding the purchase of a single house or a site for a house, the purchase would state, "Subject to planning permission." The Office of Public Works did not insert that in the purchase deal it did with the contractor in Kilkenny. It relied on the order that a Minister issued. The Office of Public Works already had experience from the other sites that this would have ended up in court because all the others did. There was clear evidence from debates in this House and matters raised by me on the Adjournment and by way of parliamentary question that this matter was of significant public concern. The local authority indicated to all those concerned that it would not tolerate this, that it was a site that would not have gained planning permission in the normal process, yet the Office of Public Works continued to persist with it. I need to get answers. That argument will, perhaps, shed some light on the reasoning behind the Office of Public Works's continuance with the other sites.

Chairman

That is a major question.

Mr. Benton

The Deputy raised a number of points and I will try to pick up on them all. The Deputy mentioned storage. No storage charge is currently being paid. There was a charge initially but all that material is now on our own property. Currently there is no charge.

Deputy McGuinness

I am sure there is a notional charge.

Mr. Benton

On the issue of planning permission, the Department of Justice, Equality and Law Reform would have the advice of the Attorney General which might conflict with the view of the local authority. That is an issue which the court will ultimately decide on. In the meantime, the Department would wish to keep the option open in relation to that site. I cannot second guess the Department on what it proposes to do. Our advice in relation to the site would be purely on the technical issues and the build ability on that site. The Department will determine the precise location and the extent to which it will provide accommodation for asylum seekers in any given site and we act as its agents. The policy decision will be taken by the Department, not by the Office of Public Works.

Deputy McGuinness

May I have answers to the other questions on the other sites?

Mr. Benton

The Deputy mentioned that we had encountered these difficulties on all sites. That is not necessarily the case. We have Brock House and Lynch's Lodge, together with Kilkenny, and as I understand it, they are the only three sites which are subject to judicial review.

Deputy McGuinness

I cannot accept that. It is not accurate. The fact is that those three sites are the subject of judicial review.

Mr. Benton

No.

Deputy McGuinness

There was an indication as far back as 2000 in regard to the property in Rosslare and the property in Myshall, that there was a huge public outcry against the use of the property for the specified purpose. There was a clear indication that this problem existed with every site purchased. I cannot understand why the Office of Public Works, at the height of the property boom, continued to purchase property and not advise the Department of Justice, Equality and Law Reform that it had a serious problem and that there would be a serious ongoing problem in relation to security, maintenance and insurance of the properties. The Office of Public Works now proposes to sell some of the properties at a time when the market is down.

Mr. Benton

The total number of properties involved was ten. Six of them are in use. Four of them, including Myshall, are not in use but the Department of Health and Children had a requirement for Myshall. I am not in a position to say what the Department of Health and Children proposes to do with it at this stage but the other three properties are the subject of judicial review. Six are in use.

Deputy McGuinness

No. The Rosslare site is not in use. The Kilkenny site is not in use. Brock House is not in use. Lynch's is not in use. Myshall is not in use. Mr. Benton might have referred them to the Department of Health and Children but I ask him again whether he has advised the Department of Justice, Equality and Law Reform and the Department of Health and Children of the problems he must be experiencing in managing those properties.

Mr. Benton

To put on record, Atlas House in Tralee, Atlas House, Killarney, Park Lodge, Killarney, Parnell Rest Hotel, Dublin, Cork Airport Hotel and the Johnson Marina Hotel are all properties that were purchased and are currently in use.

Deputy McGuinness

I am speaking about the ones not in use.

Mr. Benton

Yes, I know, but I am just making the point that six are in use.

Deputy McGuinness

A substantial amount of money is tied up in the properties not in use——

Mr. Benton

Agreed.

Deputy McGuinness

——and the Office of Public Works continues to hold them in its portfolio without doing anything about it. The front page of the report recognises the fact that the numbers have dropped from 1,000 in 2000 to 39 in the first eight months of 2001 yet Mr. Benton is telling the committee that the Department of Justice, Equality and Law Reform might need the other properties. Is it not time to cut our losses and get out of these properties?

Mr. Benton

I cannot answer for the Department of Justice, Equality and Law Reform. That is a question the Deputy will have to put to the Department.

Deputy McGuinness

Has Mr. Benton advised the Department of the difficulties he is experiencing?

Mr. Benton

It is well aware of the position——

Deputy McGuinness

Has Mr. Benton advised the Department?

Mr. Benton

——and it has legal advice on the planning situation which is the same legal advice we have.

Deputy McGuinness

Has Mr. Benton advised the Department of the difficulties and the costs being incurred by the Office of Public Works in the maintenance of the properties?

Mr. Benton

The Department is fully aware of the ongoing costs we are incurring.

Deputy McGuinness

The cost of the hotel?

Mr. Benton

Which hotel?

Deputy McGuinness

The one in Rosslare that the Office of Public Works bought.

Mr. Benton

The purchase price was €2.75 million.

Deputy McGuinness

What are the security, insurance and maintenance costs relative to each of those properties?

Mr. Benton

I do not have the detail. The maintenance costs would have been kept at an absolute minimum, whatever was necessary.

Chairman

If Mr. Benton does not have that information, can he furnish the committee with all of it?

Mr. Benton

We certainly will but in relation to public liability, the State, as the Deputy knows, carries its own insurance, so that does not arise.

Deputy Boyle

Are we considering this particular issue or are we doing all the——

Chairman

It is an open discussion on the two Votes.

Deputy Boyle

I want to comment briefly on the acquisition of buildings and put two questions on Votes 10 and 44. The information about security costs was supplied to the House in relation to Brock House and Lynch's Lodge Hotel by way of a recent question to the Minister for Finance but the rest of the information would be valuable. The information I seek concerns the divergence in the purchase price between Brock House and Lynch's Lodge Hotel. I am familiar with Lynch's Hotel. Macroom is about 25 miles away from my constituency. In terms of the floor space of each building, are they of similar size or is one larger than the other? Outside of Dublin property prices, is there something that justifies this huge divergence in the purchase price?

Mr. Benton

The main divergence in the purchase price relates to the location.

Deputy Boyle

Are the buildings of similar size?

Mr. Benton

Lynch's Lodge may be slightly bigger but one is located on an expensive piece of real estate in the centre of Dublin. The market might not demand that level in regard to the other.

Deputy Boyle

That answers a lot of other questions.

In relation to Votes 10 and 44, the concerns I want to raise relate to the response of the Office of Public Works to flooding and flood relief. The flood relief budget saw a surrendering to the Department at the end of 2001 of €600,000. I realise flood relief is about specific measures to do with individuals affected by flooding, and it is difficult to anticipate it in any one year, but while 2001 was not as bad as 2002 in terms of individual flooding incidents there was still serious flooding in areas like Ringsend in 2001. Why was money handed back under that funding category?

More particularly, under Vote 10 on the engineering works, I am interested to know about the smaller amounts of money expended under various headings including engineering, drainage and localised flood relief. On the reductions in Supplementary Estimates in 2001, did they occur on the basis of information supplied by the Office of Public Works to the Department of Finance that the money was not necessary or was it as a result of a policy decision in the Department of Finance? Given the degree of flooding that occurred in 2002 on the Tolka River in Dublin, in my own constituency in Togher and in Blackpool and other locations in the other side of Cork city, has the return of money both for capital works and for the current expenditure in 2001 proved to be a false economy?

Mr. Benton

The explanation in relation to 2001 concerns the foot and mouth disease crisis. As the Deputy is aware, the work we do requires access through land so all of that work was suspended for the period. That largely accounts for it. It is an accounting procedure. It was not a policy decision on the part of the Department of Finance or anybody else.

Deputy Boyle

Would it be fair to say that the foot and mouth disease crisis could have been a contributory factor to the degree of flooding that occurred in 2002 because of the failure to put necessary works in place?

Mr. Benton

I am not sure if the level of expenditure involved would have prevented all the flooding that occurred in 2002 but——

Deputy Boyle

The reduction was considerable. We are talking about a couple of million pounds under all the headings.

Mr. Benton

That is an explanation as to why there was an under-spend in that Vote. There is nothing we can do about that. We just could not access the lands during that period. It is as simple as that.

Chairman

I want to put one or two questions to Mr. Benton before I call Deputy Fleming. With regard to rental from tenants, which section of the Office of Public Works is responsible for the collection of rents from its public sector tenants?

Mr. Benton

Our property management section.

Chairman

Does it have the same problems with non-payment as the BMS had with payments in regard to its charitable work?

Mr. Benton

No.

Chairman

Does that section of the Office of Public Works have proper procedures for the collection of that rental income?

Mr. Benton

We have, yes.

Chairman

On decentralisation, the Office of Public Works rents 25% of the expensive office space in Dublin. It spent €98 million last year on renting office facilities in the capital. When the Government gets around to decentralisation, will that not result in major cost savings to the Exchequer in terms of reducing rent payments on office space alone?

Mr. Benton

Yes.

Chairman

Are we locked in to any long-term leases on properties? If a Department is to be moved, is it possible to get out of a long-term lease on a property? How can that contract be broken?

Mr. Benton

Generally, leases provide for a five year break.

Chairman

Or a renewal.

Mr. Benton

Or renewal, yes.

Chairman

The majority of the property rented in Dublin at a cost of €98 million is on a four years, nine months basis. Is that correct?

Mr. Benton

No, they would be rented on 20 to 25 year leases with five year break clauses written into them.

Chairman

Has the Office of Public Works done a cost benefit analysis on the difference in the price of accommodation elsewhere? Some €98 million per annum is being paid in respect of property.

Mr. Benton

I was corrected there, in that, the breaks clauses built in can be five years or ten years. There is generally a break clause in the leases. The cost of renting space outside Dublin is significantly lower. In so far as one can release all the space in Dublin by virtue of decentralising offices, it is not very complicated to work out the sums.

Chairman

With the slowdown in the economy I thought one could be locked into long-term agreements, which one could not vacate and, as Deputy McGuinness said, one could end up paying rent for a vacant property. That would not make much economic sense.

Mr. Benton

No, and it is an issue we have to consider in the context of any plan. As the Chairman will be aware, we own and lease property. We are anxious to get out of the unfavourable leases and we would use the opportunity that might be presented by decentralisation to get out of many of the less desirable leases.

Chairman

Has the Office of Public Works done a report on those less desirable leases?

Mr. Benton

No, because at this stage we are not clear on the extent to which decentralisation will happen or when it will happen.

Chairman

No report has been made.

Mr. Benton

There is no report.

Deputy Fleming

I want to raise the question of the property for asylum seekers. Four of them have run into difficulty and there are judicial reviews in respect of the planning. That is a bad success rate in regard to the ten or 11 properties. No private sector could afford to leave that percentage of buildings idle for a period.

As an official of the organisation responsible for advising and managing the State property portfolio, in the first instance would Mr. Benton not advise Departments, which seek advice and request it to inspect properties, on its assessment of the planning issues before a particular property would be purchased? I do not imagine it was an administrative official who made these decisions. I am sure Mr. Boyd was involved and he would have considered and advised on the suitability of the premises, but he should also advise on planning issues because they are relevant to the purchase of a property in regard to the purpose for which it is intended to be used. If he does not advise on planning issues, that is a major flaw and it is possibly one of the reasons we are here.

We could not expect officials in various Departments to be expert on those issues. They would look to Mr. Benton to provide expert advise on the property in question. This all goes back to the old attitude in the public service, that the planning laws are for Joe Soap but not for the public service. With regard to the famous Burren case, which was an excellent court case, the Office of Public Works was dragged kicking and screaming to go through the planning laws like everybody else in the country. There is an attitude in the organisation to the effect that the planning laws might apply to other people, but it is the Government and it can proceed with developments. This has probably caused some of the problems.

If this had happened in the private sector, all those properties would have been purchased subject to planning permission. This situation is abysmal. If a constituent told me he had bought a property for €9.2 million and he could not get planning permission on it, I would wonder what sort of an eejit he was and what sort of an eejit of a solicitor he had. I cannot comprehend that.

Deputy Rabbitte

It would not happen out my way. We would rezone it for him.

Deputy Fleming

Those days are gone - we hope. The Office of Public Works should advise on planning permission because it advises on State property. If it does not, it is a major flaw. I find it bamboozling that people can spend that amount of taxpayers' money on something about which there is a dispute. The Office of Public Works should have consulted the relevant local authorities to get a determination in the first instance. To say that this will be fought out in the courts is to say that case could go on forever. The Office of Public Works should have spoken to the local authority first. In regard to most of these cases, I suspect the local authorities were kept in the dark in the first instance and that is a major issue.

I wish to raise another question on the Vote. Mr. Benton might make some observation about who is responsible for assessing the planning situation before taxpayers' money is spent?

Mr. Benton

I cannot answer for the Department, but I am pretty confident it is fully aware of the planning implications in regard to developing any of those sites.

Deputy Fleming

Does the Office of Public Works not have a role in advising Departments that approach it? Its officials cannot all be property and planning experts. I would have thought that expertise is housed in the Office of Public Works in order for it to advise Government on properties it might buy. Does the Office of Public Works have a planning advice section?

Mr. Benton

We have very experienced people in the planning area. The issue is whether those developments can take place outside of the normal planning rules and whether it can be done by virtue of ministerial order. That is the issue and they are fully briefed on that.

Deputy Fleming

In relation to Vote No. 10, on page 72, there is a statement under the heading "Operating Cost Statement for 2001" and towards the bottom of the statement there is heading "Expenditure Borne Elsewhere" which covers superannuation and retired allowances, notional rents payable, notional rents receivable of some €74 million, and net allied service expenditure of some €186 million. Can one of the representatives explain what they involve and about the notional rent, which seems to be cropping up in these figures? If the representatives do not have the details of that with them, I would be pleased if it could be submitted in writing to the committee later. I hate to gloss over these matters. I am sure people must find them unusual.

Mr. Benton

The notional rents applies to State owned property. Where Departments are occupying a building, we attribute a notional rent to it. It would be related to the market rate for that type of building. That is what the national rent position is.

Deputy Fleming

Did those notional figures come into Office of Public Works's Estimates? I thought Estimates dealt with real figures, real money.

Mr. Benton

No, they do not. That is why they are specifically mentioned.

Deputy Fleming

To what does the net allied services expenditure apply?

Mr. Benton

That is work we carry out for other Departments free of charge.

Deputy Fleming

That is the free of charge element.

Deputy Rabbitte

I wish to question the Accounting Officer on a matter I have pursued for more than three years with his predecessor and with the Accounting Officer for the Department of Justice, Equality and Law Reform. There is a site in the ownership of the State in my constituency, a very small part of which is utilised for a Garda station. Divisional status for Tallaght has not been implemented because the Minister for Justice, Equality and Law Reform says there is not accommodation at Tallaght to house the gardaí. This matter has been going back and forward from one Department to another for a number of years. If there were a partnership with a private developer, the site has the capacity for a major development that would be a valuable enterprise for the State and at the same time would provide better facilities for the Garda.

I understood I had the agreement of his predecessor to put some kind of PPP or other mechanism in place at Tallaght. I understood from Mr. Dalton in the Department of Justice, Equality and Law Reform that there was a similar vague approval. I received a letter from the new Minister for Justice, Equality and Law Reform yesterday. Nothing is happening. He is implying that provision of accommodation is not a matter for him. He has many responsibilities such as the future shape of Europe and the nature of politics, but in terms of hard and fast things it is difficult to pin him down. This is not his business, he says in the letter, it is a matter for the Office of Public Works. I take advantage of this opportunity, which I would not normally do, by asking Mr. Benton how the building is coming along in Tallaght and when will people be able to move in?

Mr. Benton

The Deputy probably first raised this matter with me when he spotted the potential of this site. It has been looked at. We have developed, in some detail, a scheme for exploiting the potential of that site. We are in discussion with the planners at present. The idea is that we take it to the planning permission stage during this year, after which we would seek partners in releasing the value to fund the new development that is necessary. It is advanced and we hope to go public with the scheme shortly.

Deputy Rabbitte

Whatever the merit of the plans that have been devised and irrespective of the response of the planning authority, is there a danger that the absence of money might mean that we would go ahead and put up a makeshift addition to what is already an unsuitable Garda station and the project could founder because the finance is not available?

Mr. Benton

We hope we will release sufficient value to fund the Garda requirement. If that does not prove to be the case, we will have to look at the funds available for Garda development generally to see to what extent some of that might be needed. At this stage, however, we are hopeful, if we are not confident that the value we are releasing will more than match the cost of the development for the Garda.

Chairman

With regard to Vote 44, the interdepartmental review group on flooding policy is apparently considering the centralisation of all activities at the Office of Public Works. How does the Office of Public Works view this prospect?

Mr. Benton

No decision has been taken on that, Chairman. The review process is under way. We have met a number of times and hope to conclude our business by the autumn. In the meantime, we have invited comments from all interested parties and have arranged a series of bilateral meetings with people who have particular interests. Some of the parties to that process have a view that a single agency is the best way forward. That issue is still subject to discussion and no view has yet been taken on it.

Chairman

It is also envisaged that the Office of Public Works will be made responsible for the allocation of humanitarian relief. A newspaper report stated that humanitarian relief was allocated by the Irish Red Cross after the flooding in Dublin in early 2002. The same article claimed that people who were fully insured were not barred from receiving help. Has the Irish Red Cross allocation of expenditure been audited by the Office of Public Works?

Mr. Benton

We were particularly pleased with the service the Red Cross provided during the flooding crisis and the speed with which it was able to get money to people to allow them to replace some of their damaged furniture, repair their homes and so forth. One of the values of operating through the Red Cross is that it can operate with a degree of flexibility which a State agency would not necessarily have. The speed of the response was such that we did not receive a single complaint from anybody in the process.

I do not know whether individuals benefited to the extent suggested. However, on average, the pay-outs to individuals were significantly less than what insurance companies were paying. Overall, the speed and manner in which the Red Cross responded should be commended. From the point of view of the Office of Public Works, I am delighted with the service it gave.

Chairman

Did the people who were fully insured get compensation as well?

Mr. Benton

I am not aware that anybody who was fully insured got compensation.

Chairman

Would that have been audited in the Department of Finance by the Comptroller and Auditor General?

Mr. Dermot Quigley

I assume so. I have no reason to believe it would not be.

Mr. Purcell

Yes, I have a responsibility there. It was specifically referred to by the Department of Finance in giving approval to the Office of Public Works for operating the scheme in this way. I note from looking at some of the papers that it is not a question of compensation as such, but humanitarian assistance. It is coincidental that we are in the course of carrying out an audit of the 2002 expenditure in this area and we are getting records through the Office of Public Works from the Irish Red Cross.

Chairman

Thank you for that clarification.

Mr. Benton

Where individuals may have had insurance and where that insurance was inadequate, there was provision for topping it up by the Red Cross.

Chairman

Who would carry out that assessment?

Mr. Benton

The Red Cross.

Deputy McGuinness

I have a number of questions. What is the cost of the Myshall site? Can I get a note about the purchase of a site for a school, the School of the Holy Spirit, in Kilkenny? I am anxious to get some details on the background to that. On the flood relief scheme in Kilkenny city, what is the cost of the PCB monitoring, analysis and clean up following the spillage of PCB in the River Nore? Have the cost implications for the Department been analysed in relation to the houses and the commercial properties which, it is claimed, are damaged by subsidence due to the flood relief scheme? Are those costs within the budget or is there another mechanism to account for them or how they might be progressed? What is the position at present? Is the Office of Public Works looking at the properties affected? As the scheme is probably the biggest in the country in recent times, have arrangements been made to record it by video or photographs? That would be of help to the Department for future schemes. Looking at old photographs of the river, it will be changed remarkably when the scheme is finished.

Mr. Benton

The purchase price for Myshall was €1.33 million. I will send the Deputy a note on the school site. I do not have the information immediately to hand. With regard to the cost of the PCB monitoring in Kilkenny, that is ongoing and we cannot draw the line on it yet. I am not aware that it is significant, as of now, but it is something we are dealing with on a daily basis. The cost implications of making good any damage is dealt with within the contract. The information to date is that it is not significant in the context of the value of the contract.

Deputy McGuinness

Is it an insurance issue for the contractor?

Mr. Benton

No, there is provision within the overall project budget to make good this type of damage. Finally, there is a video record of the progress of the scheme.

Deputy McGuinness

Does Mr. Benton believe the recording is extensive enough, given what has happened with that scheme and the issues that have emerged? It is important to have a detailed record of the scheme in progress.

Mr. Benton

I agree. It is something I would be happy to discuss with the Deputy and I will take it up with the people involved. There are lessons to be learned, apart from the issue of transforming the appearance of the river, about how we do our business, how we relate to people and how we communicate. We have learned lessons on that and the project should serve as a template for major engineering works of that kind in the centre of a city like Kilkenny, particularly with its historic property.

Deputy McGuinness

Perhaps Mr. Benton would look at extending it. When the scheme was started the recording of it by way of video or photographs was somewhat limited in its approach. Now that Mr. Benton has seen how the scheme impacts on an urban centre such as Kilkenny, given the history of that city and for the benefit of his own records, money should be found to extend that project.

Mr. Benton

I agree with the Deputy. There are many issues around it which are worth recording. It would be a very interesting video.

Deputy McGuinness

In relation to the claims and on behalf of those who are genuinely affected by it, I ask the Office of Public Works to be pro-active in its approach to examining the property immediately and making records of its current state. Sometimes, in such schemes, money is spent, contractors leave and individual property owners are left to fight a court case. Such situations should be avoided at all costs. By intervening now to examine the individual properties concerned such an eventuality might be avoided in future.

Mr. Benton

My understanding is that kind of surveying is going on. If, however, there are issues about which individuals are concerned, the Deputy is aware that we have established a forum involving representatives of community groups and other local interests. That forum will meet regularly to tie up all the loose ends.

Mr. Purcell

I wish to pick up on the earlier point, which occupied the minds of members, regarding unoccupied buildings. There are serious issues to be addressed, some of which have been alluded to in the questioning. To take a fairly simplistic view, let us say the State buys 11 properties, five of which cannot be used for the purposes for which they were purchased. Regardless of where the blame or accountability lies - whether it is within the Department of Justice, Equality and Law Reform, the Office of Public Works, or the legal advice which was given - there is something wrong in a situation like that. I will examine this matter further and hope that further details can be included in my report on the 2002 accounts, which will be published before the end of September. I hope I will then have answers to some of the questions that have arisen.

Deputy McGuinness

While we exchanged views and information here today and questions were answered, it is not acceptable that the matter should be left like that and that the Department of Justice, Equality and Law Reform is left off the hook. The matter has to be followed up and we will have to bring some form of closure to it. We did not bring closure to it today. We asked questions and got answers but the issue has been left hanging in the air. It passes between this committee, the Department of Health and Children, and the Department of Justice, Equality and Law Reform but it has still not been resolved and is costing the State a fortune.

Chairman

On that point, the representatives of the Department of Justice, Equality and Law Reform will appear before the committee in the next three to four weeks. I welcome Mr. Purcell's comments that he will undertake a thorough investigation of the vacant properties for his report on the 2002 accounts to be published in September. I thank Mr. Purcell and his team for the detailed work they have undertaken. I also thank Mr. Benton and the Department of Finance officials. It has been a good debate which has put down a clear marker. In the interests of obtaining value for money, it is important that we should see best business practices being employed in every Department. That is my bottom line in most situations.

Before concluding, I wish to obtain agreement from the committee that it notes Votes 10 and 44. Is that agreed? Agreed.

Our next meeting will be on 8 May, the agenda for which will include: Vote 5 - the Central Statistics Office, chapter 3.1, census of population; and Vote 4 - Ordinance Survey Ireland, chapter 2.1, shortcomings in financial control. Is that agreed? Agreed.

The witness withdrew.

The committee adjourned at 2.05 p.m. until11 a.m. on Thursday, 8 May 2003.