COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 24 Mar 2005

Vote 25 — Department of the Environment, Heritage and Local Government.

Mr. N. Callan (Secretary General, Department of the Environment, Heritage and Local Government) called and examined.

Chairman

The committee will now consider 3.15, correspondence dated 23 March 2005, from Mr. Niall Callan, Secretary General of the Department of the Environment, Heritage and Local Government, concerning storage arrangements for electronic voting machines and 3.16, correspondence dated 23 March 2005, from Mr. Niall Callan replying to the committee's letter of 26 January 2005 in respect of the procedures for collecting liquidators' contracts and obligations, ISPAT Limited, which is also relevant to today's meeting.

Witnesses should be aware that they do not enjoy absolute privilege. Members' and witnesses' attention is drawn to the fact that as and 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 rights 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 production 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 in the course of proceedings who are not present may have to be made aware of these rights and provided with a transcript of the relevant part of the committee's proceedings if the committee considers it appropriate in the interests of justice.

Notwithstanding this provision in the legislation, I should 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 of 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 provisions of Standing Order 156 that the committee shall also 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. Callan to introduce his officials.

Mr. Niall Callan

Ms Maria Graham is principal officer in the housing policy section; Mr. John Kelleher is the departmental finance officer; Mr. Michael Layde is principal officer in the waste management section; and Mr. Terry Allen is principal officer, water services section.

Chairman

I invite the officials from the Department of Finance to introduce themselves.

Mr. Jim O’Farrell

I am a principal officer and I am accompanied by Mr. Jim Doyle, principal officer, and Mr.Gary Tobin, assistant principal officer.

Chairman

I invite Mr. Purcell to introduce Vote 25.

Mr. John Purcell

The committee will recall that due to extensive discussion on electronic voting at its meeting on 3 February 2005, the committee did not have sufficient time to consider the Vote for the Department of the Environment, Heritage and Local Government on that day, hence today's meeting.

As the title of the Vote suggests, it covers quite a wide range of services which are mostly delivered through local authorities and other agencies such as An Bord Pleanála and so on. The bulk of the annual expenditure of €2.3 billion comprises approximately €1 billion in grants for housing, almost €500 million for water and sewerage schemes and another €500 million in payments to the local government fund.

Gross expenditure is €2.341 billion and this matches the Estimate almost to the penny without recourse to Supplementary Estimates. This reflects a combination of good estimation on the part of the Department but also a degree of flexibility associated with additional funding of local authorities through the local government fund.

Besides the expenditure on electronic voting, there were no other issues arising from the financial audit that, in my opinion, merited a public accountability.

Chairman

I invite Mr. Callan to make an opening statement to the committee.

Mr. Callan

I have circulated a written statement which I am prepared to have taken as read in order to afford more time.

Chairman

I invite Mr. Callan to give a brief summary of the statement to get the proceedings under way.

Mr. Callan

Certainly, Chairman. As the Comptroller and Auditor said, the Department faced many challenges during 2003. The Department continued with major programmes benefiting the social housing sector in particular and developed a number of new initiatives, such as the affordable housing initiative, during this time.

Progress on the water and sewerage capital programme continued. A major effort was required in the Department to gear up for the Environment Council during the Irish Presidency. This placed great demands both in the preparatory phase which covered most of 2003 and during the first six months of 2004. The Department was also preparing for the complex task of putting an emissions trading scheme into operation which is required as part of the European Community's effort towards compliance with the Kyoto Protocol. I am glad to say those arrangements are now just about up and running but work began in 2003.

By 2003 the Department had well absorbed its new responsibilities for heritage and good work was being done under that heading which may be of interest to members. It was necessary to reorganise the Department to deal with the influx of more than 1,500 new staff. Latterly this number has been somewhat reduced because some of the new functions have been shared with the OPW.

Those are some of the headline issues affecting the year 2003 and they are set out more fully in my written statement.

Chairman

May the committee publish the statement as drafted and circulate it?

Mr. Callan

Certainly Chairman.

Chairman

Thank you.

Deputy Fleming

I thank Mr. Callan for his synopsis of his opening statement. The Comptroller and Auditor General has stated that most of the moneys allocated to the Department were expended during the year without recourse to Supplementary Estimates. I wish to concentrate on one or two issues. In particular, I wish to comment on local authority and social housing programmes.

In the year under review, 2003, the Estimate provided by the Oireachtas for local authority social housing was €1.116 billion. The amount spent by the Department was €989 million, leaving a shortfall of €26.5 million. This was money the Oireachtas voted for providing houses to people who are not in a financial position to provide houses for themselves. We find that at the end of the year €26.5 million was not spent on that purpose in 2003. The only information I can glean from the figures contained in the detailed opening statement that Mr. Callan circulated to us is that 13,577 families were provided with social or affordable housing as a result of the various schemes operated by the Department. Given that €989 million was spent, the average cost per accommodation unit was approximately €73,000. I estimate that the €26 million not spent in 2003 could have provided at least 350 housing units. At the end of 2003, notwithstanding that the Oireachtas provided the money, it is probable that 1,000 people were not provided with local authority houses.

We all know about the record increase in housing construction. The Government and the Oireachtas are trying to match this with increased funding for local authority and social housing programmes. It is disappointing to review the accounts for the year and find that €26.5 million was not spent. We all know that housing lists represent a considerable issue in every county. As Oireachtas Members, we find it indefensible. Every local authority is complaining about the lack of funding and yet either at local authority or some other level in the system, funds were not spent where they had been allocated. At what point in 2003 did the Department realise that the target for spending on housing programmes would not be met? What steps did it take at that stage to try to rectify the problems?

Mr. Callan

As the Deputy will see, taking the housing group of programmes — subheads B.1 to B.4 — overall, the underspend involved was not €26.5 million. That arises on subhead B.1. It is a good deal less than that, at approximately €7 million, when the Estimate provision is netted against outturn. That said, I wish to emphasise that the allocation under the core provision, which is subhead B.1.1, or local authority housing was fully spent and was, in fact, slightly exceeded. We were allocated €601.5 million for the provision of local authority housing and we spent €602.15 million during the year. Extra money was required. The major shortfall came as extra money was required in the event. The Deputy will see this from the appropriation account on housing grants, where almost €20 million extra was injected into that subhead.

The real underspend — if I can talk in real as opposed to accounting terms — arose under subhead B.1.2 — regeneration and remedial works. This programme covers, most importantly, the major programme of regeneration being undertaken in Ballymun but also in a number of inner city locations in Dublin, Cork, Limerick and perhaps in a small number of other locations as well. We suffered from well publicised difficulties in progressing the Ballymun project in 2003. Some of these continued into 2004. A number of planning permissions were appealed to An Bord Pleanála and judicial review proceedings were initiated in the High Court in a particular instance by third parties. Sites were closed due to health and safety issues. Unfortunately, some tragedies have occurred while carrying out works in Ballymun. The Health and Safety Authority has quite properly, in terms of its responsibilities, seen fit to intensify inspection of construction work in Ballymun and to shut down operations for lengthy periods where it was not satisfied.

Two contractors also withdrew from contracts they had been awarded for their own reasons, which caused further delays. In 2004 there was delay in progressing work towards demolition because of the discovery of certain asbestos-containing materials in the ceilings and floors of some, not all, of the tower blocks. These factors have taught us something that perhaps we should have appreciated earlier, which is that carrying out a major and at times dangerous programme of building works in an area that is still highly populated is difficult and is likely to progress somewhat more slowly than in more conventional or greenfield circumstances. That was the main factor in slowing real spending on housing programmes in 2003. The other programmes either spent out more or less fully or, indeed, needed to have further moneys allocated.

Deputy Fleming

I appreciate that. The regeneration of the Ballymun flats is obviously a mammoth project. The report before us states that €160 million had been expended by the end of 2003. That is now 15 months ago. What is the current final estimated cost of the project?

Mr. Callan

The estimated final public costs are just over €600 million at 2003 prices. There is also significant private sector investment in Ballymun because as many and perhaps more private sector houses are being built as part of the regeneration as public sector ones. It is not just housing either, some very important public facilities are being procured as part of the project.

Deputy Fleming

It will obviously be 2006 or 2007 before the project is completed. With inflation since 2003, that €600 million will become at least €700 million. How does this compare to the original estimate when the project was launched?

Mr. Callan

We can take the initial date of the project as being approximately 1999. Its timescale was then envisaged as requiring approximately ten years. The estimate I gave the Deputy of just over €600 million is from 2003. I do not have before me an earlier estimate or the estimate at the initial stage. The project evolved over some time. The 2003 estimate is relatively comprehensive and was undertaken fairly recently. I do not have the earlier figure with me.

Deputy Fleming

The reason I want to ascertain the figure is that estimates come before the committee every week for projects which often exceed by multiples the sums originally suggested.

Mr. Callan

The main public cost will involve the construction of 2,800 units of public housing with ancillary community facilities which will benefit a population of approximately 20,000. Approximately one third, or 600 to 700, of the houses have been built or are well advanced.

Deputy Fleming

The housing programme is one of the more significant functions people associate with the Department of the Environment, Heritage and Local Government. Approximately how many houses were completed by the end of 2003 under the Part V programme of the Planning and Development Act 2000? The percentage of a development to be set aside for social affordable or voluntary houses can be up to 20% in some local authority areas and a great deal less in other. If 70,000 houses are to be built each year, one would hope 10,000 will be provided under Part V. How are the numbers panning out?

Mr. Callan

An expectation of 10,000 houses per annum from Part V is highly optimistic. According to the statistics available, 46 houses accrued through Part V in 2002, 163 in 2003 and, according to our forecasts, approximately 600 for 2004. We project the provision of approximately 1,500 houses under Part V in 2005.

Among the factors according to which we cannot assume that 20% of private sector housing output will be set aside are measures introduced in late 2002 to permit various types of trade-offs between planning authorities and builders. Part V applies only to groups of four or more houses on lands which are zoned for housing development. One-off housing, three-house developments and larger developments subject to certain zoning and location conditions may escape the Part V regime.

Deputy Fleming

In other words, the Part V process will not produce a great many houses for a variety of reasons. The numbers will be relatively modest.

Mr. Callan

The process is gathering momentum. When one combines Part V housing with that coming forward through the affordable housing initiative, it is possible to project a target of 10,000 to 11,000 houses during the next three years.

Deputy Fleming

I appreciate that. Can Mr. Callan explain the tendering process for voluntary and co-operative houses? While the local authority tendering process is carried out in accordance with normal Government and EU tendering requirements, voluntary and co-operative housing schemes involve private companies and publicly funded contracts which are not placed by public bodies. Do the voluntary organisations in question have the authority to invite tenders on a selective basis or are they subject to the normal rigours relating to public contracts?

Mr. Callan

Our guidelines recommend competitive tendering for the procurement of social housing.

Deputy Fleming

While I would have assumed there would be a requirement for competitive tendering, I wonder who can tender. A public local authority contract for a scheme of houses involves an open, public process which can be followed on the Internet. What is the tendering process for voluntary and co-operative housing programmes? Can a co-operative or voluntary body simply invite three builders with which it is familiar to tender? Such tenders would, presumably, be competitive. I do not see as many advertisements for such tenders as I do for local authority housing contracts.

Mr. Callan

Applications for individual schemes are vetted in the Department. It is our wish that good market testing takes place in such circumstances. It would be better for me to secure a note for the Deputy to provide greater detail on the extent to which we require transparent publication of notices of tender and whether we allow tenders to be invited informally.

Deputy Fleming

I would be satisfied with that. Mr. Callan has used the terms "guidelines" and "wish", whereas in the case of a local authority he would presumably refer to "rules". The difference in tone I detect suggests there is quite a difference in the requirements for openness and transparency for what are ultimately publicly funded contracts. I would like to know the procedures involved.

Mr. Callan

I will respond in greater detail on the point of information the Deputy has put to me. The costs at which we procure voluntary housing currently are not significantly out of line with those applying to local authority houses.

Deputy Fleming

I appreciate that. The Estimate for the water and sewerage programme was €471 million and the outturn was €450 million, which is another example of underspending. That the Department had more significant projects in previous years is not the issue. Knowing that it would deal with a larger number of smaller projects, the Department sought an Estimate of €471 million which the Oireachtas provided. Of that, €21 million was not spent. While most politicians at national and local level are continually harassed by communities which cannot obtain group sewerage and water schemes, €21 million set aside for this purpose was not spent. Can Mr. Callan explain why this happened? The same principle seems to be involved as in the case of housing. Perhaps there is a good reasons for it.

Mr. Callan

The Deputy has put his finger on the key reason we did not hit our spending target for water and sewerage capital in 2003. By that year, almost all the very large wastewater treatment schemes which had been the mainstays of the programme for four to five years were reaching completion stage. The tempo and complexion of the programme changed in that we wanted to build up the portfolio of smaller, rural schemes. Approximately two thirds to three quarters of our funding had been used to implement the urban wastewater directive prior to 2003. Since 2003, we have been trying to face another issue, namely, increasing the quality of rural water supplies and getting momentum going in the group scheme sector and otherwise to assist in that purpose.

While there is difficulty, by definition, in dealing with a greater number of projects, it is to be noted that we have expanded the rural water sector considerably in 2004 and 2005. In other words, the sector has been on an upward trajectory, which continues, although it did not rise quickly enough for us in 2003.

Deputy Fleming

My final point relates to the local government fund. How are allocations to individual local authorities arrived at? The local government fund and motor taxation income are major elements of the allocations. Although the latter is processed through the local government fund, it is a separate account.

When the motor taxation issue arose some years ago, I understood that a specific proportion of approximately 80% to 85% of revenue from domestic as opposed to commercial vehicles would be allocated to local authorities, with additional funding provided from the local government fund. Is there a correlation between the amount of motor taxation collected in a local authority area and the amount of money the relevant local authority receives through the local government fund?

Mr. Callan

The short answer is that there is no correlation. Legislation introduced in the late 1990s established that the local government fund, a new fund being established at that stage through legislation, would be resourced through the totality of motor taxation income and a supplement, for which certain criteria were laid down, to be provided by the Exchequer. The combined total of these two sources forms the local government fund which benefits all local authorities. The disbursement of moneys from the fund to individual local authorities is operated by Ministers for the Environment, Heritage and Local Government according to certain criteria. In practice, the Department makes an allocation for roads, on the one hand, and all other purposes — known as general purposes — on the other. This is not a matter of legislation but continues a practice developed in the Department prior to the establishment of the local government fund in the late 1990s. I understand the practice dates from 1996, when an intensive effort to more systematically improve non-national roads began.

Deputy Fleming

The reason I raise this issue is that people at local level have pointed out that their postal addresses do not necessarily correspond with their local authority functional area. Some people in Laois, for example, have informed me that their motor taxation is paid through County Kildare because their address happens to be in that county. Mr. Callan's answer appears to indicate that Laois County Council is not losing out as a result and that there is no problem in this regard.

Mr. Callan

The Department establishes with each local authority what are the administrative expenses of each motor taxation office and pays them through the fund, which is a national kitty.

Chairman

Before I call Deputy Deasy, I will raise a housing question given the context. I understand responsibility for rent subsidies is being transferred from local health authorities to local authorities. Have the arrangements been finalised and when will the new mechanism commence?

Mr. Callan

It commences this year in respect of seven pilot areas. In other words, it is not yet being established nationally. It is, however, a significant change which has been under discussion for a number of years. To finance the transfer of responsibilities in the seven pilot local authority areas and allow the initiative to proceed, some €19 million or €20 million of financing is being transferred from the Vote of the Department of Social and Family Affairs to the Department's Vote.

Effectively, what will happen in the pilot areas is that the local authority will assume responsibility for the rents of approximately 19,000 recipients of housing benefit through the SWA system who have been identified as needing the benefit on a long-term basis. The individuals in question will no longer be paid supplementary welfare by the Department of Social and Family Affairs and, instead, the local authority will enter into a direct relationship with their landlord. This measure follows a great deal of discussion of this issue. The experience of how the system progresses this year will inform how quickly we can roll out the change to the other local authorities.

Chairman

I have two short supplementary questions. When the health authorities, acting on behalf of the Department of Social and Family Affairs, allocated rent allowance, the perception locally was always that it was a temporary mechanism and responsibility for housing remained with the housing authority, that is, the local authority. This meant that a person in receipt of rent supplement would live in private rented accommodation for a period but remain on the housing list of the appropriate local authority. Now that this responsibility is being transferred to the housing authorities, will a housing authority which provides rent supplement have fulfilled its obligation to meet the housing need of an individual or a family?

Mr. Callan

A national assessment for social housing purposes is taking place this year and the people in question will be assessed. If the housing they enjoy is a satisfactory option, it may be open to the local authority to conclude that this is the case. On the other hand, it may be the case that the people in question need or prefer an alternative and a better option is available in some of the sectors for which the local authority is more directly responsible. If their location in the private sector accommodation is satisfactory, this may be noted.

Chairman

This is a major practical and philosophical shift. If it is deemed that the provision by a local authority of a rent subsidy fulfils a housing need, we will have moved to a position in which people in need of housing may be housed long-term in private rented accommodation with the assistance of the relevant local authority. I am not objecting to this position but trying to establish if this is the thinking. If this is the case, it will not constitute a minor change of policy or amount to no more than a decision to allocate responsibility to a different parent Department and local authority. On the contrary, it will be a major change if the subsidisation of private rented accommodation is deemed sufficient to fulfil a housing need.

Mr. Callan

The housing need would be fulfilled through a stable contractual arrangement between the local authority and a private landlord. That is not a contingent position but a stable framework underwritten by the local authority as housing authority. While I accept that there are institutional differences between how this scheme would operate and how traditional social housing operated, it has been examined in policy terms over a long time. Similar experiences and developments have occurred in other developed countries. We believe this is a meritorious and reputable way of adding, as it were, an instrument to the repertoire of housing authorities in meeting housing needs. The scheme is at pilot stage and if difficulties appear in its operation, we will take account of them.

Chairman

I am not arguing the merits of policies, which is not the job of the committee, but trying to establish the facts. I thank Mr. Callan for his reply. Has the Department sanctioned additional staff for the local authorities involved in the pilot scheme, given that they are being assigned a considerable additional quantum of work?

Mr. Callan

The Department leads an implementation team which involves local authority players. We have already sanctioned a team of regionally based local authority programme managers who will have appropriate support. I do not have the details of the additionality but in principle we know that this is a new initiative demanding appropriate resources and we will support it in that way.

Deputy Deasy

With the Chairman's indulgence I will stay on the subject of housing. I have wanted to ask these questions for some time. They have to do with building standards generally rather than just the social housing with which the Department is directly involved. I hear a great deal about this matter. As Mr. Callan is aware, houses are very expensive throughout the country but in many cases they have been badly built, especially apartments. In some cases, one can hear the alarm clock going off in a neighbouring apartment.

Housing stock has increased dramatically in the past three years especially in response to a demand from the private sector as well as from social housing. Does Mr. Callan have any concerns that the construction of recently built houses might in some cases be substandard? Are there any procedures within the Department to check on those building standards? Has Mr. Callan examined this or does he have any concerns in this regard?

Mr. Callan

Obviously modernising and improving building standards is a concern of responsible central government administrations in all developed countries. One key driver of this process is the need to increase energy conservation performance in housing. That has the twin objective of making people more comfortable in their homes, more economical in their household budgets and it also helps in the reduction of emissions.

We have been upping the ante in stages in terms of the energy management and insulation requirements for housing. Deputy Deasy is right that apartment and condominium developments pose different problems. We have been addressing many of these issues. There are also costs involved. It is an evolving issue because at all times we have to consult with consumers and the building industry in order that the new standards to which we aspire are deliverable within the time specified in the regulations.

This is a constantly evolving area on all fronts. We have put in new requirements in regard to disability, which the Building Regulations Advisory Board examines. The floor area compliance certificates, which are linked to stamp duty exemption, issued by the Revenue Commissioners still involve inspections by our housing inspectorate. There has been a concern about the ability of building control authorities, that is the main local authorities, to carry out the enforcement job assiduously enough. Some years ago the County and City managers Association established a benchmark that a minimum of 12% to 13% of new buildings should be inspected prior to sale in all local authority areas or at the appropriate stage. In the main that is now being done.

Deputy Deasy

Let us forget about energy efficiency for a moment. One can hear conversations in the apartment next door in many of the apartment buildings that have been built in the past two years. Building standards have not kept pace with the rate at which these apartments and houses have been built in their thousands. I contend that appropriate buildings standards have not applied in many cases. There is not enough enforcement by local authorities in this area. Mr. Callan stated that new standards are in place. I do not believe they have kept pace with requirements. One is mainly dealing with issues such as breeze blocks being used in construction. Sound insulation appears to be the biggest problem, including problems arising from timber floors.

The rules appear to vary between local authorities. Essentially, this is a quality of life issue. People pay €350,000 for an apartment yet they can hear a conversation next door. People frequently tell me that is the case. There is a problem with regard to the construction of these apartments. There needs to be more rigorous enforcement or at least scrutiny when it comes to the construction of apartments and houses. The Department should examine this matter. I accept there is a conflict between investment and the cost involved. I am afraid that at present it is weighted in one direction. The people who are suffering are those who have bought these houses for a great deal of money. Their lives are badly affected as a result. The Department should re-examine the matter.

Mr. Callan has provided the committee with a report on the storage arrangements for the electronic voting system. From what I can gather from the one page letter he issued in this regard, he has made it clear that this matter is the responsibility of returning officers. It struck me that to a certain extent responsibility is being devolved from the Department. Mr. Callan has gone through every county involved. Does he have any general impressions about this system or its effectiveness? Was it good value for money for the taxpayer? Would he do the same thing again? What would he have changed with regard to the deployment of electronic voting machines?

Mr. Callan

The premise on which this arrangement was undertaken was the need for local deployment of voting machines. The thinking was that it was not sufficient to have these machines deployed at the very last moment, let us say within a matter of days or a week or so before an election. In their discussions with us about how to deploy the electronic voting machines, returning officers had expressed their concern that the machines should be available to them for some time in advance of an election so as to ensure the orderly conduct of elections and the adequate training of new staff. That consideration in the main underpinned our decision to have the storage of machines undertaken at constituency or county level in the same way as equipment for paper-based elections is stored. Our advice to local authorities issued in early 2003 was to try to source this kind of accommodation locally and as cheaply as possible. We had some hope at that stage that a good number of returning officers might be able to find free accommodation in public buildings, including local authority buildings or courthouses, as they had been doing in respect of other equipment. In the event it transpired that they were having difficulty in getting local authorities and those in charge in the Courts Service to provide free accommodation. We now accept that through no fault of their own they were pushed towards what we felt should have been the last option, that is, sourcing accommodation commercially. If I am not mistaken, only four of the 28 returning officers involved were able to source accommodation in the traditional way, namely, in courthouses or local authority offices. What has emerged from this process is that many of them were told that the squeeze was being put on them by the owners of these properties in respect of the storage rights which they had traditionally enjoyed. In other words, they would have to move other equipment and accommodation would be needed elsewhere.

Deputy Deasy

I am asking what oversight was there within the Department during this process. Was anyone appointed within the Department to look at what was going on around the country? Did anyone raise a red flag to indicate that the returning officer in Sligo was storing equipment for nothing while the returning officer in Waterford was doing so at a certain cost? Did anyone ask questions about the procedures and processes involved within the Department or did Mr. Callan devolve powers to returning officers and issue them with a circular?

Mr. Callan

Returning officers are not direct agents of the Department. In the normal sense, they are not under its direct control. It is a sui generis relationship. We issued general guidance to them. It has always been their responsibility to look after the mechanics of running elections. In line with this general responsibility which is in the main discharged autonomously by returning officers, we asked them to use their local knowledge and know-how to source accommodation for the machines in the appropriate way, having regard to considerations of economy. We believe that in the main the outcome of the further inquiries undertaken on behalf of the committee appears to show that there was good market testing in virtually every case. As far as we can see, returning officers went to considerable lengths to get a number of bids for suitable local properties and only entered into arrangements after this had been done. It is not clear to me that a degree of supervision by the Custom House would have added huge value or achieved much greater economies in this exercise, given that it had been decided to carry it out on a local basis.

Deputy Deasy

The returning officer in Waterford asked the local auctioneer to look for premises. The auctioneer in question came back to the returning officer, having received the specifications from the Department, to state he was interested in making a bid. Should the returning officer not have made it clear at that point to the individual involved that he should remove himself from the process? Does Mr. Callan know of the six premises involved? Does he know the number in which the auctioneer and his partner had an interest?

Mr. Callan

On the last question, I do not have the knowledge required. The procurement was being undertaken at local level by people who had been entrusted with a good degree of autonomy in carrying out their functions. In line with the committee's concerns, we have sought to establish the details across the country as best we can and believe they indicate a situation that is generally creditworthy in respect of how returning officers went about their business. Obviously, we would prefer if some of the costs were closer to the average cost but difficulties were encountered locally which did not make that possible.

Deputy Deasy

Has the Department discussed the possible use of electronic voting machines in the referendum on the EU constitutional treaty?

Mr. Callan

The date of the European referendum is not known to us. It is a matter for decision by the Government. There is variability attaching to when it may take place. The practicality of using the machines would depend on the imminence or otherwise of such a referendum.

Deputy Deasy

I will ask the question again. Has the possibility of using electronic voting machines in the EU constitutional referendum been discussed in the Department?

Mr. Callan

Our focus is on developing the testing and validation of the electronic voting system in order that it can be deployed with confidence in any relevant election.

Deputy Deasy

Therefore, it has been discussed.

Mr. Callan

We continue to prepare the system to do its job in all possible elections.

Deputy Deasy

I am Chairman of the Joint Committee on European Affairs and noted the Minister had made some comments on the possible use of the machines in the referendum on the constitutional treaty. One reason the Nice treaty referendum failed initially was the low turnout. I suggest to Mr. Callan that the use of these machines in the referendum on the constitutional treaty will depress voter turnout.

Mr. Callan

It is a matter for the Minister to decide on the deployment of electronic voting machines in any given election by ministerial order. Our task is to prepare the system for deployment in any possible circumstance. It would then be a matter for the authority of the day to decide whether to deploy the system.

Deputy Deasy

I thank Mr. Callan.

Deputy Curran

I welcome Mr. Callan whose Department covers such a range of areas that I will stick to two or three. As a Dublin Deputy living on the east coast, I was interested in his comments on the Sellafield plant. He mentioned that legal actions had continued against the United Kingdom. In one such action important legal precedents regarding Ireland's rights under the OSPAR Convention to access information on the marine environment were established.

From time to time State agencies and emergency services in Ireland engage in a variety of exercises to measure the response to major accidents and disasters. The issue arises occasionally in the context of possible incidents, be they acts of terror or accidents, at Sellafield. People in the Dublin area do not have much confidence in the information coming from Sellafield. Incidents that occur there are either not fully reported or not reported at all. One hears sometimes that spent fuel is not accounted for. What is the Department's view of this saga?

Mr. Callan

The State's first action against Sellafield under the OSPAR Convention resulted in a recommendation that Ireland is entitled to good environmental information on the operations at Sellafield and that co-operation between Ireland and the United Kingdom should be intensified. The two Governments acted on that and in December 2004 signed a formal agreement pledging full co-operation in the event of any significant nuclear incident. In the context of this agreement, a package of measures was announced which will better facilitate visits by the Radiological Protection Institute of Ireland, an agency of the Department and the Garda Síochána to Sellafield. Among other details, the agreement includes giving the Radiological Protection Institute of Ireland real-time access at all times to the UK radioactive incident monitoring network, RIMNET.

Notwithstanding the Government's continued opposition to various operations in Sellafield, particularly the mobilisation of the new MOX plant, we co-operate better with the United Kingdom in acquiring useful information about what is happening from an environmental and, to an extent, a security perspective.

Deputy Curran

In light of the Government's opposition to the operation of the plant, in what actions is the Department engaged?

Mr. Callan

We continue to pursue an action under the UN law of the sea conference against the United Kingdom. A tribunal of this case began in The Hague in 2003 but the European Commission intervened and claimed that Ireland's hearing of that case by the UN forum was inappropriate in view of EC competence in this area. It added that the matter should be heard by the European Court of Justice. The UN tribunal adjourned the case pending a hearing in the European Court of Justice as to whether Ireland is competent to take this action alone, without EU cover. Sweden has joined Ireland in this action and the United Kingdom has joined the Commission. We expect a hearing to take place by June and an outcome perhaps later this year.

Deputy Curran

On the housing issue, Mr. Callan quoted figures under Part V and indicated that last year the State secured approximately 600 houses. He also stated that this year the figure will be closer to 1,600. The total output for the two years will probably be similar. What is driving the increase?

Mr. Callan

More planning permissions under Part V are coming on stream. Previously, non-Part V planning permissions were available to builders who wanted to maximise those from a commercial point of view before constructing Part V linked buildings.

Deputy Curran

There is a time lag in terms of catching up.

Mr. Callan

Yes, Part V arose from the Planning and Development Act 2000, which came into effect in 2001. Part V was amended at the end of 2002.

Deputy Curran

If Mr. Callan does not wish to answer the next question now, he may forward the answer to the committee at a later date. He said that in 2004 local authorities had varying regulations on the percentage of building that would fall into the Part V category. The authorities also came to other arrangements with the result that the 600 units do not fully reflect the contribution to the State. Is that correct?

Mr. Callan

That is possible. The figure would not reflect straightforward financial transfers or sites.

Deputy Curran

We have only one half of the equation which looks poor because it is less than 1% of housing but there is another side to that. Does the Department have information on that? Without that figure it is difficult for the committee to monitor the effectiveness of Part V.

Mr. Callan

We do not have the information with us but we can obtain it quickly. However, the information on sites may take a little longer to compile. In principle, I agree with the Deputy that it should be available.

Deputy Curran

The committee is examining how this is being administered while each local authority has its own scheme and administration. We need the Department to say how it controls the overall position in order to ensure that Part V operates effectively.

Each local authority has its own Traveller accommodation programme and in the area I represent there is a significant improvement in reducing illegal Traveller encampments at the roadside. However, the programme can only be as effective as its weakest link. There is no point in some local authorities concluding their programmes, while others do not do so. From a national point of view, how well is the programme operating?

Mr. Callan

It is operating rather well. A recent census shows that there are almost 7,000 Traveller families in the State, an increase of over 1,400 since 2000-01. Despite that, we have reduced the number of families living at the roadside since 2001 by well over 300. In 2003 the overall figure was down to 788. Between the years 2001 and 2003 we have increased the number of housing units available to Travellers from 4,734 to 5,688.

Deputy Curran

How many units of accommodation was the Traveller accommodation programme supposed to provide nationally over its entire life? Was the programme meant to run for five years?

Mr. Callan

In the four-year action plans we are now getting from the local authorities we have annual targets——

Deputy Curran

Has Mr. Callan the starting point? He referred to 2001, when a census was done. Each local authority prepared a programme. All of these combined would have given us a national figure of units to be provided over the following four-year period, if I am not mistaken.

Mr. Callan

Under the national development plan we had a figure of nearly 1,200 Traveller-specific units to be provided or refurbished, and 500 families to be removed from the roadside.

Deputy Curran

I am not sure we are talking about the same figures. As I understood it, Mr. Callan referred to 2001, when a census was carried out by each local authority.

Mr. Callan

The census to which I referred is the most recent one and its results have just been issued. It was undertaken at the end of 2004.

Deputy Curran

Mr. Callan may correct me if I am wrong. Some time around 2001, all local authorities conducted a census of Travellers in their areas to find out how many there were, if they were indigenous to that area, what accommodation they had and so forth. Based on that, the local authorities developed a programme for the next four years, if I am not mistaken, to provide accommodation. Is that correct?

Mr. Callan

Yes. I do not seem to have the specific figures which derive from 2001, but since that year we have increased overall accommodation for Travellers by nearly 600 units. By 2003 we had reduced the number of families on the roadside by more than 300.

Deputy Curran

I am not disputing those figures. Mr. Callan may respond to us in writing. The first need is to identify what the local authorities said they were going to do. I am more concerned now with looking at what progress has been made by each local authority. It is of concern to me that some local authorities might be performing while others might not. The idea was to have all local authorities performing at the same time in an effort to solve the problem for once and for all by means of a national programme. It is not necessary for Mr. Callan to respond today but he might inform the committee later by means of correspondence.

Mr. Callan

We will do that. The national Traveller accommodation consultative committee is monitoring all this too. The data should be available and I am sorry I have not got it with me.

Deputy Curran

Mr. Callan understands what I am looking for.

Mr. Callan

I do.

Deputy Curran

The concern would be that different local authorities may not be performing equally. Although I do not know how far the programme extends, we are well into it and we should now see very specific trends.

Deputy McGuinness

Is there a figure for the indebtedness or otherwise of each local authority? Is it the responsibility of the Department to establish, within that figure, the hard core element of that debt, the amount of debt within local authorities that is proving difficult to reduce? Are those figures available to the Department?

Mr. Callan

The indebtedness figures should be available within our system. I suspect they are published in some of the volumes which we make available concerning local authority income and expenditure. The Deputy's second question is a little more difficult in that it seems to involve some element of subjective judgment in terms of what is the hard core or intractable element of the debt.

Deputy McGuinness

As the Department considers the local authority debt on a year to year basis, it could establish over a number of years that the authorities have in a way traded into a position where a hard core element of the debt has emerged. I want to establish what that might be. I know what it is in my own local authority and want to know what it is throughout the country. If Mr. Callan does not have those figures now, he might make them available later.

Mr. Callan

We know that at the end of 2003, most local authorities were in surplus, a number were in debt and a further number in considerable debt. We have such figures.

Deputy McGuinness

Is that a matter of concern?

Mr. Callan

Obviously it is. The managers of the particular counties will know how they stand in the scheme of things and will certainly notice the position in terms of the constraints under which they put together their budgets. At budget time, some local authorities have to deal more than others with these constraints.

Deputy McGuinness

Can Mr. Callan provide us with those figures?

Mr. Callan

Yes.

Deputy McGuinness

Regarding Trim Castle, has the money given to the local authority to purchase a site for a parking area at the castle, which was later sold on and is now being used for a hotel, been refunded to the Department? From previous reports to this committee, I understood that an audit was undertaken in that regard, that a full report was to be made available and that the money given by the Department would be refunded. Is the report available and has the money been refunded?

Mr. Callan

The money has been unequivocally promised to the Department. To the best of my knowledge it has not yet reached the Department's account but it is not an issue between ourselves and Meath County Council. We requested the money back and were promised a cheque. I am not sure whether the cheque has been lodged to our account.

Deputy McGuinness

Has the Department examined how the situation came about? Has it looked at the procedures adopted by that local authority, members or management, to establish that all protocols or guidelines were followed? It took considerable efforts by a local public representative to unearth this situation, to bring it to public light and to ensure that the money was returned. As a result of the publicity attached to this situation, the fact that the amount was identified and that repayment was promised, I am surprised it has not already been paid back and that the report promised from the local government auditor's office is not made available publicly either to the Oireachtas Library or elsewhere. I ask for that to be done.

Mr. Callan

The local government auditor is competent for the investigation and the report he mentions. He is currently dealing with the matter. He has invited public submissions as he is obliged to do. The closing date for those submissions was 19 February, but the auditor, following any submissions he receives, intends to complete his report, which will encompass all the issues the Deputy mentioned, and publish it within the next few weeks — by the middle of April.

Deputy McGuinness

Will that report be made available to members of this committee?

Mr. Callan

Yes. It will go to the council in the first instance, but subject to any procedural proprieties it can enter the public domain.

Deputy McGuinness

How long has it been going on? What year was that grant made available?

Mr. Callan

The Department's grant is not the sole issue regarding what the auditor is dealing with, according to my understanding of the situation. That element of the matter has been resolved by the return of the moneys concerned. A complex of issues is involved in the Trim car-park question.

Deputy McGuinness

It has been going on since when?

Mr. Callan

From the perspective of the Department's involvement, I believe the former Department of Arts, Heritage, Gaeltacht and the Islands came to some form of agreement in principle to give grant assistance towards the car park to facilitate visitors to Trim Castle as far back as 1997 or 1998.

Deputy McGuinness

It has been a public issue almost since that time, yet it is still unresolved. I look forward to seeing the report. On page 4, the report refers to natural heritage and the SACs. In respect of the major river systems, the Nore is included to support the conservation of salmon and so on. On page 1, it refers to the EU urban wastewater treatment directive. Therefore, it is conscious of the issue of the salmon in the Nore and the EU directives. Are we paying, or have we paid, any fines regarding the EU urban wastewater treatment directive?

On the same issue, is Mr. Callan concerned at the speed, or lack of speed, with which local authorities are achieving their spending on the upgrade of wastewater treatment plants? I think in particular of a €6 million grant made available to my local authority which is still not spent while the Nore is regularly being polluted by thick sludge, and residents in one area are having to move out of their homes. I could link that question to benchmarking, for which the councils received further moneys. Has the payment of benchmarking and the establishment of directors of services in local authorities increased the efficiency of service delivery to the public and the spending of departmental moneys as allocated through grants or direct funding?

Mr. Callan

The Deputy mentioned the EU urban wastewater treatment directive with specific reference to issues affecting the Nore. Ireland has never had to pay fines to the European Commission or the European Court in respect of any environmental directive. Generally speaking, we have made satisfactory progress with implementation of the directive, which, for the benefit of members, establishes environmental treatment standards for waste water discharges that vary according to the size of the population equivalent involved.

The Commission has raised with us regarding major urban areas the failure to proceed more quickly with the completion of secondary treatment facilities for Bray, Howth, Letterkenny, Shanganagh — that is linked to Bray — Sligo and Tramore. There are different reasons the progress of schemes to improve treatment in those areas was delayed. Suffice it to say at this stage that planning, and in some cases physical work, is now well in hand to bring those schemes to completion. They are well mapped in our water services programme.

The EPA produces a report on compliance by local authorities with the EU urban wastewater treatment directive every two years. Getting the modernised treatment plants in place is certainly one part of the solution. The other is the effective management and operation of water treatment systems, whether they be new or not so new. That sometimes gives rise to concern. I will not pretend that at times the management of certain water treatment systems does not fall below good standards. The EPA exists to police that and draw the attention of local authorities to it. Through its Office for Environmental Enforcement, it brings enforcement provisions to bear on local authorities if they do not heed the counsel of the EPA in managing treatment facilities more effectively.

Regarding the Purcell's Inch plant in Kilkenny, we recognise that improvements are needed, and we are ready, within the framework of the water services programme, to facilitate Kilkenny County Council as soon as possible.

Deputy McGuinness

I highlight this because the grant of €6 million was given, yet it is not spent. The river in question is constantly being polluted. It is a matter of efficiency in the Department to ensure that those grants are spent. The EPA was at the plant within the past week. The residents referred the plant to the European Commission, and I have also lodged a complaint. It is of major public concern — as well as to me as a member of the committee — that grants made available are not being spent at the speed that one would witness in the private sector.

While we talk up our commitment to environmental issues, the local authorities seem to be a major problem when it comes to delivering the types of services that might prevent such pollution. It is not a question of money, since the funding is there. I suggest that the Department has a role in ensuring throughout the country that such grants, made available several years ago, should be dealt with more efficiently, particularly when, on the other side of the coin, we are paying substantial sums for benchmarking, as is outlined in the report. We should expect a greater degree of efficiency in the delivery of the services where there is no problem with money.

We discussed the regeneration of housing estates, and Mr. Callan referred to Ballymun. There was one in Kilkenny — a standard 1950s estate. With great fanfare, the former Minister of State, Deputy Molloy, announced approximately IR£1 million in funding. Mr. Callan is familiar with that, since he has had great public complaints regarding Ossory Park in Kilkenny city. That scheme has not been completed at all. If one third of the houses have been completed, then it is surely no more. Once again, that is money made available by the Government, yet it seems to be sitting there. It is not being spent. I am concerned about the efficiency of the spending of Government grants throughout the system. They could provide great benefits such as better services for the tenants of local authority houses. We were supposed to have greater efficiency in the public service which was to be linked to benchmarking. Is Mr. Callan happy that this is happening in many local authorities? What is being done to give value for money?

Mr. Callan

A few years ago the local government sector was given a target of a sliding reduction of 1,000 in the 33,000 employed by local authorities at the time. They were asked to reduce their numbers by this figure over a period of three years. They are set to meet this target.

We are also trying to bring greater transparency to the issue of performance, a matter about which the Deputy is concerned. Last year the then Minister launched an initiative on performance indicators which will bear fruit in the public sector this year. A total of 42 performance indicators have been identified, against which local authorities will be measured. They will submit statements through a central assessment committee which will then be sent to the Minister and published by mid-2005. Some of the indicators clearly relate to environmental parameters, while others relate to housing. They extend across the range of local authority operations. All this will bring much greater transparency to the debate. I believe it will show some good performances, reflecting the modernisation which has taken place. It may also show up some local authorities which lag behind and may encourage them to intensify their efforts towards best practice.

Deputy McGuinness

Mr. Callan told us there would be a reduction of 1,000 staff. Can he let us know, by way of a note, how many chiefs and how many Indians are included in that figure? We seem to have very few Indians on the ground.

Mr. Callan

We will get those figures.

Deputy Boyle

Mr. Callan seems to be taking a degree of pride in the fact that the European Commission has not fined the Government for breaches of environmental law. Surely he should have used the phrase "not yet". In the five years prior to the accounts we are examining today, those for 2003, Ireland was the subject of the second highest number of environmental complaints to the Commission. It was the subject of the the highest number of per capita complaints in the European Union. By June 2004 there were 60 infringements being investigated by the Commission, a threefold increase in 18 months, as there were only 18 such infringements by December 2002. In January 2005 the Commission decided to take eight legal actions against the Government. If any or all of these actions are successful, it could result in fines of up to €10,000 per day for each day there is non-compliance with environmental directives. Has the Department put together any contingency plans in case any or all of these cases are lost?

Mr. Callan

We take all of these issues very seriously. In 2001 an OECD environmental performance survey complimented Ireland on having a modern environmental legislative and regulatory framework in place. It stated that, compared to many other countries, our legislation was comprehensive, modern and of recent origin. However, difficulties arise in Ireland and elsewhere in the implementation and enforcement of legislation. These difficulties have different causes. The implementation processes for directives are very complex and require major changes in behaviour on the part of those subjected to them such as farmers and businesses. Negotiations can take some time to complete as they involve arrangements which are environmentally valid but which cannot impose unnecessary regulatory burdens on businesses.

Deputy Boyle

European directives are first developed in draft form. They then become effective and countries are given two years to enact national legislation or adopt the directives as national law. I asked whether a contingency fund was being set up in case any or all of these cases are lost. They could result in the State losing €10,000 per day as long as the directives are not implemented.

Mr. Callan

There is no such fund and we do not contemplate such a fund. We work with the European Commission to reach satisfactory solutions to difficulties which arise because of the complex nature of these issues.

Deputy Boyle

I can take it that the Department is contesting every one of these actions brought by the European Commission.

Mr. Callan

We are working towards solutions that will satisfy the European Commission. The nitrates directive is a current example. Under Sustaining Progress, we listed the completion of a nitrates action programme as a key issue on the Government's agenda, although we knew this would pose difficulties for farming interests with whom we have been dealing for a longer period than we expected. We are also dealing with the Commission but a solution is now in sight.

Deputy Boyle

Is the legal process not a long one? The decision in January 2005 to take eight actions was taken after several years of involvement between the Department, the Government and the European Commission. First, a complaint is made by individuals or groups of individuals. Next, the validity of the complaint is assessed which is followed by an investigation. Finally, after a long process, a decision is made to institute a legal action. I can only assume the Government is contesting each of the eight actions now proceeding. It is not a matter of engaging in further negotiations as there has already been a period of negotiation between the Government and the Commission. For strategic or policy reasons, it has been decided to contest all of the actions.

The Commission is taking legal action over the failure to submit a plan with regard to a limit on certain air pollutants. The State has also failed to properly implement the European directive on the use of environmental impact assessments or to submit supports on the use of ozone depleting substances. These matters have had a long run-in period and a subsequent detailed period of legal action between the Commission and the Government.

Mr. Callan

With regard to environmental impact assessment directives, Ireland carries out more EIAs than any other European Union country. The issues which arose were highly technical and marginal. The Irish authorities, in good faith, felt pressed not to take an unduly bureaucratic approach to the regulation of minor peat cutting operations. This is a fairly small issue in the context of the EIA system in Ireland. The Government of the day decided that issue should be defended but the ruling went against us. We will respect that ruling and are moving to implement a system——

Deputy Boyle

We do not have environment impact assessments in this country. We have environment impact statements. Mr. Callan should not apply it to a particular item. The issue is how we put those plans together and who gets to do so. The people who promote developments often get to set their own environmental agenda. That is the case in point.

Mr. Callan

The EU directive imposes the responsibility for preparing the statement on the developer.

Deputy Boyle

I am disturbed to discover there is no contingency. The likelihood is that these actions will proceed and that there will be a cost to the State. In my opinion, we will revisit this matter in the future.

There was a second area of correspondence with regard to the Irish ISPAT plant. The Department of the Environment, Heritage and Local Government is the lead Department in terms of dealing with the situation. I am not sure the extent to which Mr. Callan can answer rounded questions on the matter because it involves several Departments, including the Department of Enterprise, Trade and Employment. The court cases, which came to a conclusion some weeks ago, involved the Departments of Finance, Communications, Marine and Natural Resources and Defence. However, we have been told that the Department of the Environment, Heritage and Local Government is the lead Department in terms of co-ordinating information. Perhaps Mr. Callan could follow through on a number of questions.

Court cases involving the liquidator interpreting how costs could be recovered by the State came to an end a number of weeks ago. The State decided not to proceed with the final court case. It also decided to meet all of the liquidator's costs with regard to the court action. What is this cost to the State?

Mr. Callan

I do not yet have the figure but I will make it available as soon possible. The cost will be considerable but has not been assessed at this time.

Deputy Boyle

There were a number of court actions. There had been a High Court decision on the previous occasion Mr. Callan came before the committee and it was uncertain as to whether this decision would be appealed to the Supreme Court. The Government decided not to proceed. Subsequent court actions were then moved. Why was there a dual-track approach in terms of the court actions taken? Why was there a subsequent delay with regard to final court decisions?

Mr. Callan

The main substantive action, on which judgment was delivered in July 2004, was effectively a contest between the priorities of company and environmental law. Company law, which is a very established body of law in terms of liability and situations involving liquidation, won out. The judgment was not prepared to state that environmental liabilities could attach indefinitely to a matter which had gone into liquidation.

We were prepared to consider an appeal because the principle of environmental liability is important. However, the Attorney General advised that the matter might better be addressed in the context of new legislation or regulations to implement EU requirements on environmental liability. It would cost more money to try to vindicate ourselves or get the High Court decision overturned in the Supreme Court and the outcome would be uncertain. If we want to improve the position of environmental legislation, vis-à-vis companies legislation, we might better achieve this through primary legislation than by trying to win a battle in the courts. That is the gist of the advice which the Government received and followed.

A parallel and subordinate action was taken under common law against the liquidator. That offered a limited prize to the State in that the maximum amount that could be awarded against ISPAT Mexicana would be confined to a portion of the €2.4 million to be determined by the court. As we were not going to proceed further with the primary action, it would not be very clever to pursue this action either. It was more likely to succeed if we had succeeded in the first action. The financial prize was not as great as that which could have been secured had we won the first action.

Deputy Boyle

Legal costs would have risen. However this plant existed for 70 years, the last five of which involved a separate company. We are, therefore, speaking of at least one fourteenth of the responsibility. During a previous visit to this committee, Mr. Callan said that the environmental clean-up costs were likely to be in the region of €30 million.

Mr. Callan

That was a desktop figure given to us by Enviros Consulting. I mentioned the figure but it is not my own estimate.

Deputy Boyle

I would like to question Mr. Callan further on the matter. He describes the timetable as ambitious with regard to how and when material will finally be removed from Haulbowline Island. According to the timetable, none of the material will be removed until at least 2006. As it is two years since the last meeting, there will be inflationary aspects as to when the material is eventually removed and the bill will be higher than €30 million.

The Minister of State has stated that the extent of the clean-up depends on the end use. Some 80,000 tonnes of toxic and hazardous material still remain on the island. There are also hundreds of thousands of tonnes of slag material in the same area. While this material may not be toxic, it carries environmental defects. Does the amount of €30 million, and possibly more, relate only to the 80,000 tonnes of toxic material? Have any costings or money been put aside in terms of the total clean-up of Haulbowline Island to ensure its future use?

Mr. Callan

The sum of €30 million will address all likely environmental liabilities. However, that was an early desktop estimate. We will only begin to get a handle on real costs through the intrusive survey which is now being commissioned. The Deputy is correct to state that the passage of time may result in some inflation of costs. Once remediated, there may be commercial or other opportunities for future use. More buoyant economic conditions may also help with that element of the equation in future. When, as we hope, the survey is completed in autumn this year, the matter will become clearer.

Deputy Dennehy

I have two questions, the second of which concerns the issue of solid waste management nationally, but the first concerns the Haulbowline island site. The history of Irish Steel, subsequently ISPAT, played a big role in my own life, as I worked there for over 20 years. Thankfully, I survived the toxicity. We got through the 70,000 tonnes and I am still here to talk about it. I am not overly concerned with the site's history but with its future direction. I have never seen a specification of €30 million from any liquidator before. I am not a legal expert, but I did not see anyone being made liable to hand over €30 million to the State. Possibly, it was a silly figure to put forward, in the absence of a survey. According to the comments of Mr. Callan and his predecessor, no survey was carried out. It is crucial to do so to establish the site's present situation and future direction. A figure of €150,000 has been spent to get rid of a few transformers, waste oil, and grease. Who paid that money?

Mr. Callan

The Department.

Deputy Dennehy

The Department of the Environment, Heritage and Local Government paid it.

Mr. Callan

Yes.

Deputy Dennehy

Cork County Council is handling the work and employs two people on site.

Mr. Callan

The Department funds the county council which acts as our agent.

Deputy Dennehy

Does the Department reimburse the council?

Mr. Callan

Yes.

Deputy Dennehy

I do not wish to sound naive but, as Deputy Boyle noted, four Departments are involved. The issue of what is to be done with the site is crucial. The schedule states that the Department of the Environment, Heritage and Local Government should receive completed tenders by April 8 2005. The field has been narrowed down to six qualified groups and the successful tender will possibly be selected by early May. Despite this, we do not appear to know what is to be done with the site. We do not know what the successful tenderer will do or what the programme will be. Although I have asked about the demolition of buildings, no one appears to know or have any set programme of work. What are people actually tendering for? This is important because the site's intended future use will have a major bearing on the cost of what is actually done there.

If people argue that the slag systems mentioned by Deputy Boyle must be retrieved and dug up in the area of several acres known as the east tip, then almost the entire island must be excavated. When I worked there, which was not in prehistoric times, its extensive inland waterways were filled in with slag, the residue of steel manufacture, the same material that was dumped at the east tip. We must know the potential use being planned for the site, be it by the Department of the Environment, Heritage and Local Government, the Department of Enterprise, Trade and Employment or whoever has a role in the decision.

The loss of 500 to 600 jobs was a massive blow to the lower harbour area, but it also created marvellous potential. Even while I worked there, I felt there was potential for a hotel and marina. It is worth mentioning that the site was noted as having the best dry dock or graving dock in the British Isles when it was owned by the British navy. It is fabulous and is far superior to the shipbuilding dock further up the river. People should be realistic about this issue but I feel an ad hoc approach is being taken. Four Departments are involved. The Department of Defence will make a claim for the entire island but presumably will not get it. We need to know what the future use will be and it should be planned for now, with Mr. Callan’s colleagues. The site’s future use must be established first and the rest of the work may then be carried out around it. All the buildings I worked in must be demolished. I supervised the erection of some of them. As a nation, we must choose what to use the site for. Otherwise, potentially we could waste 50% of the money the Department is proposing to spend. Has Department of the Environment, Heritage and Local Government any outline of potential projects, tourist-related initiatives or anything else for the island?

Mr. Callan

The entire purpose of the intrusive and sophisticated site investigation we are in the process of commissioning is to inform thinking about future uses for the site. Specifically, it is to inform thinking about the environmental, health and economic viability of certain future uses. Although I do not have the contract documents with me, the request for tender makes what is expected clear to the tendering consultants. We want the preferred consultant to examine and scrutinise the site exhaustively to tell us what must be done in terms of remediation. I expect the preferred consultant to produce a menu of options. To take two alternative extremes, he or she might say that if the preferred use is industrial only, one would not perform as much remediation as if one was to build houses on the site. I understand the Deputy's wish to be better informed about possible future uses of the site. In a sense, however, we cannot be better informed until we acquire this assessment of site conditions and how much it might cost to remedy various materials on the site by taking them away or doing whatever is required. This is precisely why the investigation is the first major substantive step on the way.

We are doing one thing before the investigation is carried out. A small amount of scrap has already been sold on behalf of the liquidator and perhaps also on our behalf. Currently, a scrappage deal is being finalised for a larger amount of material and in the short term, it will see the demolition of the steel clad buildings. This will be carried out while the site investigation is under way. A certain amount of metal and scrap will be taken away from the island anyway.

Deputy Dennehy

The second question I wish to ask about the demolition concerns the successful tenderer in any scrappage deal. Will this process be separate from the groups tendering for——

Mr. Callan

An auction is being run on our behalf regarding the scrappage deal.

Deputy Dennehy

Therefore, this auction will proceed anyway.

Mr. Callan

Yes.

Deputy Dennehy

Arguably, this is the time and activity that will cause the greatest risk. I am worried about some of the headlines that emerged about the danger to health and safety. If health and safety difficulties occur, it will be during this period which is the only time when any real hazards might emerge during the operation due to the scrappage, the cutting down of the building and control of slag dust and mill scale.

Mr. Callan

Strict conditions will be placed on this activity. Dust decontamination must be carried out and remaining in liaison with the Health and Safety Authority and the Environmental Protection Agency will be part of the arrangement.

Deputy Dennehy

Was the figure of €30 million based on any realistic assessment or was it plucked from the air? It has made people feel very negative.

Mr. Callan

I do not wish to impugn the credentials of the consultants who gave the estimate but they would accept that it was a desktop estimate and that the real estimate could be higher or lower.

Deputy Dennehy

In fairness, Mr. Callan is covering all angles. A number of groups are interested in this issue, including former employers like me, the State, which will get any benefit from it, local residents and taxpayers who will have to pay this amount of money. Concerns are being hyped up. I worked in this area for 20 years and we were not aware at the time of the concerns. However, it is an explosive issue. Are we going to clean it up? Where will we get the €30 million from? I suppose that, as with the rest of our waste, it must now be exported to some country that is willing to take it.

Is there ongoing legal action and is there a claim on part of the reclaimed area? A group did much of the reclaiming in this area.

Mr. Callan

I am not aware of that but I will examine it and let the committee know whether an issue arises there.

Deputy Dennehy

Somebody has made a claim on it. I will leave the issue for the moment but I would like to progress it positively. The area should be levelled in two to three months and a decision should be made quickly on the slag heaps and covering issues such as whether they are toxic or can be covered over bearing in mind that the rest of the island is composed almost primarily of such slag heaps. I ask Mr. Callan to speak to the four groups about the potential future use of the island, even as the consultants are continuing their work. We need to be realistic about this. This island is in the middle of Cork harbour, which is the second best harbour in the world. We are too modest to say it is the best harbour in the world. We should have a good facility on that island for tourism rather than dirty industry.

Regarding waste management, is Mr. Callan satisfied with the reaction of the local authorities since the introduction of the pay by weight programme? I have descriptions of seven or eight different methods of supplying a pay by weight system.

Mr. Callan

The principle of pay by weight was clearly established by the then Minister for the Environment, Heritage and Local Government and his Department about a year ago. Local authorities have been mobilising in different ways to give effect to the pay by weight system. We are still assessing the position around the different local authorities. Not every authority has these systems fully implemented. It appears that some arrangements have the potential to operate more effectively and perhaps more fairly than others. We are not yet ready to assess the totality of the schemes around the country or the overall situation. We are examining the responses from the local authorities, some of which are not yet fully complete.

Deputy Dennehy

A small number of people have called for the non-payment of waste collection charges. However, these are in a minority and the majority of people support the concept of pay by weight. I compliment Cork City Council on the progress it has made in implementing pay by weight waste collection. However, I am concerned by a piece in Mr. Callan's report that states that by the end of 2003, the number of bring banks increased from 1,500 to 1,684. This is a minor increase and I would have expected it to be larger. Is a figure available for 2004? Bring banks must be part of the overall waste management plan. There was a similarly disappointing increase in the number of civic amenity sites from 48 to 55. I thought that the numbers would be much higher than that.

Mr. Callan

Unfortunately, my figures are only updated to the end of 2003 and they are pretty much as Deputy Dennehy quoted them. These figures mask very striking progress that is taking place in recycling. We believe that we have a recovery rate of 28.4% in municipal waste compared with a recovery rate of 9% in 1998, which is a considerable advance. The household fraction of municipal waste has risen from a 3.2% recovery rate in 1998 to 13% in 2003. By the end of 2003, we believe that over 44% of packaging waste was recovered. That figure puts us on course to meet the EU target of 50% recovery by the end of December 2005. This target was always regarded as extremely challenging so it is gratifying that we appear to be on course to reach and perhaps exceed it.

Deputy Dennehy

I would like to return to the issue of bring banks because they are crucial. I was Lord Mayor of the city in 1984 when the first bottle bank was opened. Throughout my time as a politician, the bring banks in my area have always been immaculate. However, I recently found waste for the first time near one. This waste had obviously come from a white plastic bag. There is now talk of closing down the bring bank in question because of the waste being dumped there. Bring banks must be protected. We need some kind of law to prevent pubs using bring banks or to prevent companies using bring banks to collect cardboard waste.

Mr. Callan

We acknowledge the concerns of Deputy Dennehy about the management of some of these recycling facilities. We know that these are valid issues that must be addressed if we are to continue to make progress with recycling.

Chairman

In the vote on the multi-annual capital commitments for water and sewerage projects, well over €200 million has been spent on the Limerick main drainage scheme. Could Mr. Callan update the committee on the progress of the scheme?

Mr. Callan

The original estimate for the scheme derives from June 1997 and was fixed at €140 million. The current approved cost of the scheme is €232 million. This represents a considerable level of inflation of 83% during the period in question. Part of this increase can be put down to inflation and price variations during the time it has taken to bring this major project to completion. We encouraged additional expenditure due to the ability of certain contractors to make a valid case regarding ground conditions that were different to those specified in the contracts. Approximately €20 million was due to variations, additions and extensions to the originally approved works.

The project has been significantly assisted by the Cohesion Fund, which accepted an eligible bundle of costs of €95 million for the project in 2000. The Fund accepted an eligible base cost of €143.68 million in 2002 and grant assistance of €107 million has been made available on that basis. In principle, we do not wish to witness such an escalation of costs. Within the water services programme, there is a much closer correlation between initial pre-tender estimations and outturns recently than in the Limerick case. Nonetheless, there was cost drift in this case because of the effluxion of time and various circumstances that arose during this project's progress.

Chairman

Are there completion and commissioning dates?

Mr. Callan

It is being commissioned at present.

Chairman

What is its condition at this time?

Mr. Callan

There is an outstanding portion where contract 42 was delayed due to a dispute.

Chairman

How does the compensation claim for one of the original contractors stand now?

Mr. Callan

The arbitration hearing has been completed and a determination arising from that process is expected by mid-2005.

Chairman

What was the recommendation at conciliation?

Mr. Callan

The recommendation was in favour of the contractor and would have awarded the contractor some €24 million or €25 million.

Chairman

What considerations would be taken into account before the Department of Environment, Heritage and Local Government would take them to arbitration? As time passes, the compensation that might be awarded at arbitration would be significantly higher.

Mr. Callan

The party to the arbitration is Limerick City Council and the Department is the paymaster. However, the council must assess these matters legally and contractually. Its professional advice was in favour of progressing the dispute to arbitration. This was the process envisaged under the original contract for resolution of disputes and it was as an exception that the parties entered conciliation prior to this. While I cannot speak for Limerick City Council, I assume it considered that the fuller hearing of issues and the ability to cross-examine and so on found in arbitration would enable it to put its case in a more favourable context and would secure for it a better outcome.

Chairman

When is the arbitrator's decision expected?

Mr. Callan

I mentioned mid-2005 but I cannot be absolutely sure. The hearings have been completed and it will only be a matter of months until a final decision is announced.

Chairman

There is a second local issue I will raise. Mr. Callan will recall that the Department forwarded advice from the Attorney General's office late in 2004 to Limerick City Council indicating it would not be legal for the council to make provision in its 2005 Estimate for a waiver scheme for refuse being collected by private contractors. Something seems to have happened prior to Christmas and a waiver scheme is still in place. Was the Attorney General's advice reviewed subsequently?

Mr. Callan

The matter was reviewed between Limerick City Council and the Department with regard to all issues in the case. The course on which Limerick City Council is now determined has the support and blessing of the Department, as this course is legally valid.

Chairman

To what degree has the Department had discussions with the Department of Social and Family Affairs about the introduction of a national means-based waiver scheme along the lines, for example, of the free electricity allowance or fuel voucher schemes? There was some discussion at departmental level but it did not seem to progress from there.

Mr. Callan

There have been such discussions from time to time but there is no Government position at present in favour of a national waiver scheme. The presumption is in favour of locally arranged waivers.

Chairman

Provided they are legally viable?

Mr. Callan

Of course.

Chairman

Mr. Callan told us during his previous visit that a major wide-ranging review of local government funding to be carried out by independent consultants was initiated in 2003, commenced in 2004 and was expected to be completed in 2005. Has Mr. Callan progress to report on that matter?

Mr. Callan

Yes but I am limited in what I can say about it as the report has not been published yet. A final draft of the work of Indecon International Economic Consultants is now with the steering group, which is chaired by the Department of Environment, Heritage and Local Government but has representation from the Department of Finance and, to some extent, the private sector. We expect publication of this report within months.

Chairman

Does it deal with the allocation of Government funding or does it examine the possibility of raising funds independently?

Mr. Callan

It examines issues surrounding the financial well-being of local government, efficiencies, the flow of funds from the centre and the possibility of increasing revenue from local sources and so forth.

Deputy Fleming

I wish to speak briefly about Mr. Callan's opening statement concerning national heritage. He mentioned the special areas of conservation of the Barrow and the Nore. Was it in 2003 that the Department of Environment, Heritage and Local Government abolished some of the joint drainage boards? There was one on the River Nore which flows through Laois and rises to north Tipperary.

Mr. Callan

The Local Government Act 2001 may have provided the means for the abolition of such bodies. I am unsure about the well-being of the body to which the Deputy refers or whether it has been removed.

Deputy Fleming

However, they were abolished some time ago. The work is now undertaken by the relevant local authorities. What is the role of Dúchas and the wildlife service? The rivers Nore and Barrow have been mentioned. What input do they have in approving drainage works to be undertaken by local authorities? What is their role?

Mr. Callan

Within an SAC, unless the work involves planning permission, or some other form of consent, perhaps ministerial consent——

Deputy Fleming

I am talking about work carried out by the local authorities because they are the drainage board now. I am not talking about private work.

Mr. Callan

I believe, and I am interpreting the law in doing so, that such a scenario is governed by the habitats regulation. I am not sure if local authority work is exempt. If it were a private person carrying work and it was not approved by planning permission or some other form of licence, then the consent of the Minister is required in relation to works that could have a significant impact on the habitat. The national parks and wildlife service of my Department operates this consent process on behalf of the Minister.

Deputy Fleming

Work carried out by a local authority would require the approval of the wildlife service if the work is significant.

Mr. Callan

It is an important point, and I would have to check article four of the habitats regulation. I am not sure if local authorities are exempt.

Deputy Fleming

Perhaps Mr. Callan would send on a briefing note, because I have——

Mr. Callan

Absolutely, yes. I am sorry.

Deputy Fleming

——in the past few weeks attempted to submit two parliamentary questions on this topic. One was ruled out of order but I managed to get the other one answered. However I did not understand the answer. I thought I would use the opportunity here to——

Mr. Callan

The issue is clear if local authority works are disturbing a habitat or are having a significant impact.

Deputy Fleming

As agent for the Minister, the wildlife service must give its consent.

Mr. Callan

Yes

Deputy Fleming

We will stay on the topic of heritage properties. The report mentions maintaining properties in State care. Consultants reported in November 2004 and the report is being examined. Has there been some change in responsibilities form Mr. Callan's Department to the Office of Public Works, OPW? Will he explain the work they do in managing properties in State care compared with the work his Department used to do?

Mr. Callan

Yes, there was a change. It was made at the beginning of 2004. There are approximately 750 monuments and built heritage properties in State care. Ownership is vested in the Minister of my Department. Following an organisational review undertaken of the former Dúchas, it was deemed more effective to have care and maintenance of these properties and visitor centres carried out by the OPW. The staff involved — some 900 — had briefly come into my Department. The staff and the operational budget involved in these operations were assigned to the OPW.

The study mentioned arose because of the large portfolio of built properties. Occasionally, there can be justified complaints that State services cannot do justice to these properties. There are also calls on the State to take on board more properties as they come on the market. The Government does not rule out buying further built heritage properties. However, based on the experience of other countries, there is the opportunity for a trust or a number of such organisations which could manage built heritage properties in a more cost-effective manner. This might not eliminate all need for subsidy but it could reduce the cost to the public purse. There is no question of assigning the whole property portfolio to these people. We are not saying the State will never again buy property. We are trying to develop a different approach to the management and operation of heritage properties.

Deputy Fleming

When the transfer took place between the Department and the OPW for the maintenance of these properties, was the Vote also transferred to the OPW?

Mr. Callan

The current Vote has been transferred, the capital Vote stays with us. The capital Vote is for new acquisitions. If it is agreed that capital works are needed, such as the acquisition of a new property, we make over the money to the OPW. All the current money has gone to the OPW.

Deputy Fleming

Are these consultants reporting to the Department or to the OPW?

Mr. Callan

No, they are reporting solely on the last issue on which I spoke — the development of trust arrangements. The issues between ourselves and the OPW were dealt with in a reorganisation report in Dúchas. We published this in mid-2003 and it was accepted by the Government and implemented by the end of 2003. That is a different report.

Deputy Fleming

I want to make a final point, arising from page 174. There is a €4.5 million underspend under subhead E8. The report says: "Factors arising from the mid-term review of the National Development Plan inhibited spending on this sub-head." Work to the amount of €4.5 million which it was intended would be carried out was not. What went wrong? Why did the review inhibit this work being done?

Mr. Callan

The mid-term review of the heritage part of the national development plan had not been completed and the Department was not able to recommend new major spending in the heritage area. We had made a commitment to allocate spending on the basis of a review. As the review did not take place quickly enough, the money——

Deputy Fleming

There was a particular project in my county that was blocked. Now it seems to be progressing again. Whose fault was this delay? Work that could and should have been done was not because someone had not carried out a financial review. Was this an internal departmental review or were consultants involved?

Mr. Callan

I would not wish to blame any consultants in this instance. It was a time of considerable change for many of the staff involved.

In June 2002 the former Dúchas division was assigned to my Department. During the next nine months we had to work on a reorganisation plan for that new intake of staff vis-à-vis the previous structure of the Department. Many changes took place which did not, in fairness, help the staff in terms of meeting targets of this kind. We have now moved on and are spending our allocation. There was overspending too. One can see that the reconstruction of the Palm House in the National Botanical Gardens required more money than was initially envisaged.

Deputy Fleming

Yes.

Mr. Callan

I am not sure that there was a serious amount of money lost to the heritage sector.

Deputy Deasy

I wish to return to a matter I raised earlier. I asked about building standards and Mr. Callan mentioned that there were new standards on the building code. Could he indicate what are those new standards?

Mr. Callan

I do not have a comprehensive list with me. I mentioned energy conservation and there have been a number of regulations that have raised the bar in this area. Examples of other issues are access for people with disabilities and fire performance standards. There is a relatively active programme of work on this. We carried out and published a major study on timber frame standards approximately 18 months ago and there will be amendments to the code to facilitate the greater use of timber frame.

Deputy Deasy

The reason I ask is that sound pollution is a factor in the practical day to day existence of many people and it frequently arises as an issue. Are there any improvements in that regard as far as the standards are concerned?

Mr. Callan

I do not have that specific information. I give a commitment to forward a note to Deputy Deasy and the committee about the matter.

Deputy Deasy

I thank Mr. Callan. Generally speaking, I know he does not deal with hypothetical situations. From his standpoint as Secretary General, however, is this an issue? Has it been raised recently within the Department?

Mr. Callan

It has arisen in the context of parliamentary questions that pass my desk, occasional representations I see and issues raised by various interest groups.

Deputy Deasy

Does the Department believe it is a problem?

Mr. Callan

I cannot say that. We want higher residential density in parallel with better design. The Department has issued policy documents on that subject. We want a living environment that is sustainable for residents and communities.

Deputy Deasy

Does the Department have data or has it carried out any reports on the satisfaction levels among new householders, first-time buyers and people in the housing market in respect of the building standards they have inherited, particularly on the tens of thousands of houses that have been built in recent years? Does the Department deal with these standards on an ongoing basis?

Mr. Callan

The Department, in conjunction with the ESRI, carried out a survey of the housing stock and published findings approximately two years ago. That revealed a mixed picture of housing conditions in Ireland. We would say that, on the whole, it is not a bad picture, particularly as so much of our housing is of relatively recent origin and is under 40 years old. In the survey, An Irish National Survey of Housing Quality, 96% of people said they were either satisfied or very satisfied with the general condition of their accommodation. I am informed that the national housing committee, a consortium of people in the private and public sectors who hold biannual conferences on housing, will meet in Cork in May this year and the main theme of that conference will be living conditions in apartments and condominiums.

Deputy Deasy

If the Chairman will indulge me, I wish to raise a local issue with Mr. Callan. The members of the committee are not from Waterford but they will have seen regular reports on the sewage entering Tramore Bay. Does the Department have a completion date for the treatment plant there and the general infrastructural works in Tramore?

Mr. Callan

We acknowledge the priority and urgency of this scheme, which has been held up for many years. There was an earlier design which did not pass muster and we are now on the second design. As I understand it, the current position is that the Department has sought the necessary reassurances from the local authority on the tendering process so as to validate that procedure. We are not at all saying that there is something wrong with the procedure but that as the supervisory authority we need more evidence that the tendering process is everything it should be. When that information is supplied to us, we will willingly approve the project to proceed to construction stage.

Deputy Deasy

Will Mr. Callan provide some kind of timeframe with regard to the construction?

Mr. Callan

I am informed that the completion date is 2006.

Deputy Deasy

I am continually informed by people dealing with these matters — not just with the Tramore scheme but also with some of the main infrastructural projects, particularly those relating to sewage disposal — that they are frustrated with the procedures within the Department. They strongly believe the procedures for these projects should be streamlined as they are convoluted and not user-friendly from the standpoint of local authorities. There must be an ease when it comes to administration and dealing with the Department. The seven villages scheme has been delayed again. Mr. Callan has acknowledged that there have been delays with Tramore but this has gone on for decades and not just years. I ask him to comment on the issue of procedures within the Department.

Mr. Callan

I am glad the Deputy raised this point and I want to assure him of our earnest intent to resolve any difficulties of the kind he mentioned. At present, we have a special contact group with county managers and other senior local authority people to try to smooth out any difficulties of the kind Deputy Deasy indicated. A couple of years ago we introduced a new project management control system with a view to establishing a faster process for dealing with medium to smaller sized projects, in particular. In recent times we are tending towards design-build or design-build-operate systems which we believe, in many cases, are more efficient in their operation and in their design and construction than traditionally procured schemes. The Department is conscious of the frustration that public representatives and others awaiting some of these important projects must feel, but it is not responsible for delays. It is well resourced to take on new projects under the water services programme and will do so as efficiently and with as much co-operation from stakeholders as possible.

Deputy Deasy

I would appreciate if the Department would keep the Tramore project in mind. This has gone on much too long and that must be acknowledged. It should be expedited to ensure that the completion date of 2006 is realised because there is much frustration within that community. What has happened in recent years is unacceptable, with sewage going into Tramore bay, which is a holiday resort. This project should be put at the top of the agenda.

Deputy McGuinness

When will the Heritage Council headquarters be completed?

Mr. Callan

My briefing tells me that the Heritage Council hopes to occupy the Bishop's Palace by the end of 2006, but the construction work to allow that would have to begin later this year. The Department is advancing the funds to enable this to happen.

Deputy McGuinness

Does this mean there is no delay?

Mr. Callan

No, there is no delay.

Deputy McGuinness

If a local authority provides a swimming pool, sports complex or fitness centre costing approximately €20 million and avails of the maximum grant of €3.8 million, does the Department then have a say in how the balance of the money is raised, for example by public private partnership? Does the Department have an input into the design, building or operation of the facility or does it set down the method of delivering the project? In other words, when the local authority has set out its financing of such a project and has availed of the grant, must this be cleared within the Department of the Environment, Heritage and Local Government or is the funding and method of delivery solely within the remit of the local authority?

Mr. Callan

That kind of project would not be supervised in detail by the Department, either its design or the method of procurement. I cannot speak for the Department of Arts, Sport and Tourism, which provides the basic grant of €3.8 million. I do not know what level of interest that Department would have in the details of such a project.

Deputy McGuinness

The question is whether the local authority can raise the €14 million itself.

Mr. Callan

No. The Department would get involved in such a project on the assumption that the local authority is resorting to borrowing to meet the balance required. Under the law, the appropriate Minister must fund the borrowing. All borrowing by local authorities requires ministerial approval. In most cases, that approval is given by the Department of the Environment, Heritage and Local Government, but where there is another appropriate Minister for a project, legally the approval should come from that Minister. However, two years ago the Department of Finance put in place a more formal tracking system for local authority borrowing and in the Budget it specified macro limits for annual borrowing by all local authorities. The Department of the Environment, Heritage and Local Government was given the task of operating that system and monitoring how borrowing by local authorities is progressing at the national level. To make this arrangement effective, the Department of Finance further stated that all sanctions for borrowing from other Ministers would have to be counter-signed by the Department of Environment, Heritage and Local Government.

Therefore, in the case mentioned, if significant borrowing is contemplated by a local authority, then that is an issue for the Department. The viability of the borrowing is looked at from the point of view of where it fits into borrowing by all other local authorities during the year in question. In other words, if sanction is given for the €14 million, will the budgetary limits set down by national Government be breached? Projects must be progressed and the Department is aware, from colleagues in local authorities, of the need for and the urgency of community projects of this kind. At times there may be delays while at other times the Department is able to give the required counter-sanction.

Deputy McGuinness

The bottom line is that the Department must sign off on such projects.

Mr. Callan

A couple of years ago it did not. In the case mentioned, a few years ago I would have said that it is a matter for other Departments, but the Department of Finance, in its wisdom has given this responsibility to the Department of Environment, Heritage and Local Government. At the beginning of each year, negotiations take place with Departments who will be in contact with local authorities. They are told, broadly, that their tranche of funding out of the limit imposed by the Department of Finance is "X" or "Y".

Deputy McGuinness

I have a question on the planning tribunals and costs. Some time ago, the former Minister for Finance, Mr. McCreevy introduced changes to how costs are incurred, particularly legal costs. What provision was made in 2003 and 2004, at what level are costs running now and have costs been reduced in any way? What is the current projection?

Mr. Callan

The cumulative costs, since the establishment of the Mahon tribunal in 1997, are approximately €38 million.

Deputy McGuinness

Is that to this year?

Mr. Callan

They may be slightly more now, but they were €38 million at the beginning of this year. The Department has been setting aside specific sums in its budget for the last couple of years, which in the event proved somewhat inflated. It was trying to estimate not just the ongoing legal and administrative costs of the planning tribunal but also what costs might be awarded to third parties appearing before the tribunal. The tribunal has not yet made any orders on costs. In fact, it made a ruling in 2004 that is likely to reduce significantly the costs of awards to third parties. The ruling will not eliminate the costs by any means but will make them less than it was feared they might be.

Deputy McGuinness

Has the Department no idea what the final outcome will be?

Mr. Callan

The idea the Department has is contained in the Revised Estimate for 2005, where there is a provision for the tribunal. The legal and administrative expenses can be subtracted from the total. The 2005 Revised Estimate for the planning tribunal is €12.3 million. That contains a significant element, which I am not sure should be identified, of estimation of possible awards of costs to third parties. It is by its very nature speculative. The Dáil agreed amended terms in late 2004 designed to speed up and terminate the work of the tribunal by 2007 and to permit its refusal to consider further issues. We have sanctioned the employment of additional staff to aid this increased work rate.

Deputy McGuinness

What arrangements are made for Irish public bodies' insurance, which covers local authorities in general? Not every local authority provides insurance cover for tidy towns committees and other voluntary organisations closely associated with the local authorities. Would Mr. Callan's Department not find it preferable to have a uniform system for insurance coverage and are there negotiations on this matter?

Mr. Callan

We have a limited role in this matter. Insurance decisions are largely left to local authorities. We may be able to provide general advice which I suspect would not be current. I will make inquiries into the lack of a uniform approach towards volunteers.

Deputy McGuinness

Volunteers assist with tidy towns committees in every county and in general are supported and funded by their respective local authorities. However, in some cases volunteers are not covered by public liability insurance if, for example, they fall from lawnmowers or into streams. With the help of the Department, general cover should be extended throughout the country to assist volunteers because otherwise local authorities' ability to provide services for communities would be limited.

Mr. Callan

My Department sponsored the tidy towns operation and I am certainly prepared to investigate whether there are anomalies or dangers.

Deputy McGuinness

Possibly due to the end of the dual mandate, cover is not available in Kilkenny. Mr. Callan might investigate this.

The Chairman raised the issue of housing projects which will see the Department of the Environment, Heritage and Local Government taking responsibility for 19,000 clients and €20 million. A deal is to be made which will provide stability to arrangements between tenants, landlords and local authorities. I am concerned that tenants may be placed on a differential rent scheme which will possibly result in increased rents. Currently it is possible to avail of the rent supplement or the supplementary welfare allowance scheme to assist in meeting the cost of rent. The minimum rent now payable is €13 but this will be much increased on a differential rent scheme. Will it be possible for the tenant to receive supplementary welfare allowance or will a change in legislation be required? A new local authority tenant normally does not mind paying increased rent because of the advantages involved but this new scheme is not advantageous for the tenant. I grant that stability and security will result but there are serious financial concerns about supplementary welfare allowance.

Mr. Callan

It is not intended immediately to extend differential rent arrangements to tenants in this situation. The tenant will presumably pay to the local authority an identical rent to his or her private sector arrangement.

Deputy McGuinness

That rent comprised a tenant's €13 contribution and a rent allowance. Health board officials appear to have been informed that the current rent payment system will progress towards a differential one. Huge liabilities would entail in this case for Mr. Callan's Department. It would be unacceptable to pass these on to clients receiving €148.80 per week. Serious issues arise for local authorities, health boards or other agencies.

Mr. Callan

It is intended to hold fuller consideration of the issues surrounding these pilot projects.

Deputy McGuinness

This is a major issue. The Department of Social and Family Affairs is moving 19,000 people to a different system. This has obviously not been fully thought through. Concerns exist that costs will arise for the State on this project. If differential rent is not to be introduced the present form of payments will have to continue.

I would like a note on this issue. We are not concerned here with political liabilities but certainly a risk of exposure exists. The mathematics of how tenants or the Department may meet the cost of rent has not been explained to me in layman's terms. I repeat that the health board officials who operate the supplementary welfare allowance scheme or the payment of the rental scheme have different information from that before me today.

Mr. Callan

I would be happy to prepare a note. To correct my earlier remark, 19,000 is the ultimate number of supplementary welfare tenants proposed to be transferred to the new rental accommodation scheme.

Deputy McGuinness

Do the seven projects then involve a smaller number?

Mr. Callan

The seven projects involve 5,000 tenants this year across local authorities, including Dublin, Galway and Limerick City Councils; South Dublin and Donegal County Councils; a joint initiative by Offaly and Westmeath County Councils; and Drogheda Burough Council. I apologise for my mistake.

Deputy McGuinness

I would welcome a brief on the matter before it affects a member of my constituency.

I do not wish to see local authorities following the route of Eircom or ESB by putting distance between callers — their customers — and live representatives. They are using communication systems to create a great distance. I hope that local authorities are not going the same way. If one telephones some local authorities, one is asked to press button one for this and button four for that and, while it may save time, it does not do much for customer relationships. Public representatives then get it in the neck when we meet the public. Perhaps it could be managed in a cost-effective manner that people would still answer the telephones.

Mr. Callan

As my Minister has expressed trenchant views on this, it can be left safely to his good offices.

Mr. Purcell

I have a suggestion for the work of the committee and it touches on something that both Deputies Fleming and McGuinness mentioned much earlier, which is things dealing with the local government fund. If the committee wishes to review local government funding in its totality, it must examine the local government fund in conjunction with the Vote. Deputy Fleming spoke about rural water schemes this morning. There is almost €10 million issued through the local government fund for rural group water schemes. Deputy McGuinness spoke about benchmarking and better customer service at local government level. Again, there was a payment to the initiatives fund from the local government fund in 2003 of €4.5 million and almost €5 million the previous year. This was to provide support and encouragement for local authorities to undertake new initiatives to improve efficiency and effectiveness in the manner in which they do their business and to develop new approaches to business planning. I would suggest that in future, when we are taking the Vote, we could take the fund into account. The fund for 2003 has been audited. To complete the picture there is also the environment fund that uses the plastic bag levy and the landfill tax to fund activities under the aegis of the Department. That is a suggestion that perhaps the committee might take up.

Deputy McGuinness

How do we achieve what Mr. Purcell is suggesting?

Chairman

The next time we take the environment Vote we will also include these funds for the purposes of discussion. We will take them all together to give a fuller financial picture.

Deputy McGuinness

Three officials from the Department of Finance who were present were not asked any questions. Perhaps we can address that at the next meeting.

Chairman

They had a hard day the last day. Is it agreed to note Vote 25? Agreed. I thank Mr. Callan and his officials and the officials from the Department of Finance for their attendance.

The witnesses withdrew.

The committee adjourned at 3.55 p.m. until11 a.m. on Thursday, 7 April 2005.