COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 22 Feb 2007

Chapter 5.1 — Landfill Targets, Local Government Fund Accounts 2005 and Environment Fund Accounts 2004 and 2005.

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

Chairman

Witnesses should be aware that they do not enjoy absolute privilege. Their attention and that of members 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 has granted certain rights to persons identified in the course of the committee's proceedings. These rights include: the right to give evidence; the right to produce and 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 or 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 be exercised only with the consent of the committee. Persons invited before the committee are made aware of these rights and any person identified in the course of proceedings who is not present may have to be made aware of them 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 remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions in 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. There is some relevant correspondence which arises on foot of a letter received in respect of cable network diversion costs on roadworks.

I welcome Mr. Callan and the officials from the Department of the Environment, Heritage and Local Government. Will Mr. Callan introduce his officials?

Mr. Niall Callan

With me are Gerry Galvin, principal adviser with water services, Liam Whelan, principal officer with the planning division, Maurice Coghlan, principal officer with the local government and franchise division, Peter McCann, finance officer, and Des Dowling, assistant secretary with the housing division.

Chairman

Will the officials from the Department of Finance introduce themselves?

Mr. Jimmy Doyle

I am Jimmy Doyle, principal officer with the sectoral policy division. I am accompanied by my colleague, Gary Tobin, who also works in the division and who is responsible for dealing with the environment Vote.

Chairman

I call on the Comptroller and Auditor General, Mr. Purcell, to introduce Vote 25 — Department of the Environment, Heritage and Local Government, chapter 5.1 — Landfill Targets, Local Government Fund Accounts 2005 and Environment Fund Accounts 2004 and 2005.

Chapter 5.1 of the annual report of the Comptroller and Auditor General reads:

5.1 Landfill Targets

Biodegradable municipal waste (BMW) is waste that is capable of undergoing decomposition over time through natural processes. It comprises household waste as well as commercial and other waste which, because of its nature or composition, is similar to waste from households. It is typically made up of organic waste such as food and garden material, together with other biodegradable materials such as paper and cardboard, wood and textiles.

State Obligations

The 1999 EU Landfill Directive imposed obligations on Member States in relation to Waste Management. The principal obligations imposed by the Directive include the requirement to

progressively reduce the level of BMW disposed of by landfill in stages up to 2016

publish a national strategy on waste management.

Ireland was required to bring into force, by July 2001, laws, regulations and administrative acts to give effect to the Directive. The Waste Management (Amendment) Act, 2001 was passed on foot of this obligation. Over the years the Department of Environment, Heritage and Local Government introduced a number of regulations to deal with aspects of the Directive – these were consolidated in 2004.

National Policy

The Department has issued a number of policy documents in recent years to address the waste issue, the first being Waste Management-Changing Our Ways published in 1998. This document set out national targets for municipal waste recycling and biological treatment, to be achieved over a fifteen year time period. These are the targets that are used by the Department when benchmarking progress.

The 1999 Directive required the submission of a national strategy on BMW to the EU by July 2003. The National Strategy on Biodegradable Waste was published by the Department in April 2006. The Strategy describes a range of measures designed to enable the State to meet the landfill diversion targets as set out in the 1999 Directive.

Implementation of Measures

The Waste Framework Directive of 1975 established the requirement for waste planning, licences for carriers and the polluter pays principle. On foot of obligations deriving from the Directive, waste management plans were prepared by each of the local authorities. The Waste Management Act, 1996 required local authorities to produce waste management plans either individually or jointly with other authorities. Subsequently, seven regions evolved, each representing a number of local authorities. Each of the seven regions produced a waste management plan for their areas, apart from three local authorities which prepared individual plans. In 2005 the regions published their second round of plans, generally for a five-year period up to 2009 or 2010. A Policy Statement produced by the Department in 1998 was based on an internationally adopted hierarchy of options for dealing with waste management. These options were, in order, prevention, minimisation, reuse, recycling, energy recovery and disposal. According to the Department's Overview Report on Waste Management Plans, published in 2004, the options chosen by local authorities in their waste management plans were recycling, thermal treatment and landfill, with recycling being the most favoured option.

Recycling is facilitated by segregated household collection, bring banks, civic amenity sites, materials recovery facilities or transfer stations and biological treatment facilities. The provision of biological treatment facilities, which would deal with organic waste, is only at proposal stage in local authorities in all but two of the regions. However, increasing numbers of private sector facilities are coming on stream with others at the planning and development stages.

Although progress is evident in recycling some items of municipal waste such as glass and ferrous metals there is not the same success with BMW. A high proportion of organic materials and textiles are still being sent to landfill.

Reporting Progress

An EU Waste Statistics Regulation came into force in December 2002, with an obligation on the State to report on the 2004 data by June 2006. This will require greater harmonisation of waste statistics. The State has an option to apply for a derogation from this 2006 reporting date in relation to certain waste categories.

At national level the Environmental Protection Agency (EPA) is responsible for the collection and reporting of national statistics on the generation and management of waste. Since 2001 it has published information in relation to BMW. The information is based on an annual collection of data from local authorities and waste licence permit holders, using questionnaires.

A report by the Department noted that local authority waste management plans highlighted the lack of consistent, reliable information on waste generation within the regions and that different approaches to data and statistics have been taken in the plans with the use of a variety of data estimation and presentation practices. Some plans used target rates or quantities, others expressed targets in terms of increases in the rates or quantities recovered or recycled, while targets were expressed in other plans in terms of decreases in the rates or amounts of waste to be managed in other ways (e.g. landfill). It also noted that the target achievement dates varied between plans and ranged from 2004 up to 2013.

A report published by Forfás advocated greater co-ordination in the implementation of waste management plans and more effective national and regional co-operation in order to achieve an integrated network of waste management facilities.

The EPA recommended in its 2004 report that waste data should be supported by audits and other verification exercises by local authorities in order to enhance the credibility of the data, and that the development of waste information management systems at local and national levels should be actively supported.

Targets for Reducing Landfilled Biodegradable Municipal Waste

The reduction in the amount that could be sent to landfill under the 1999 Directive was set by reference to the total amount by weight of BMW generated in 1995. The maximum amount that could be sent to landfill was to be no higher than the following percentages of the 1995 level

75% by July 2006

50% by July 2009

35% by July 2016

The 1995 baseline figure for BMW generated was agreed between the EPA and the Department at just under 1.3m tonnes. This figure was arrived at after taking account of information and knowledge accumulated by the Agency since original 1995 data was compiled and was included in the Agency's National Waste Report 2004 which was published in 2006.

The 1999 Directive allows Member States which consigned more than 80% of collected municipal waste to landfill to postpone achievement of these targets by a period not exceeding four years. According to the National Waste Database Report 1995 Ireland consigned some 92% of municipal waste to landfill in that year. The European Commission was formally notified by letter of 22 December 2005 that the National Strategy on Biodegradable Waste will be based on a first phase target date of 2010 (deferred from 2006) and a second phase target date of 2013 (deferred from 2009), with the stated intention that the Irish authorities are strongly committed to achieving the targets at the earliest possible dates and that efforts will focus on achieving the necessary BMW diversion from landfill in advance of these revised target dates.

The National Strategy also states that Ireland will review the position in relation to the available four-year derogation from 2016 to 2020 and will come to an informed decision on the prospects for achievement of the third phase diversion targets as soon as practicable.

Current Performance on Diversion from Landfill

The biodegradable element of municipal waste was first itemised separately in the EPA's 2001 National Database Report. BMW is categorised under the headings of wood, paper and cardboard, organics and textiles.

In 2004, the latest year for which statistics are available, some 1.3m tonnes of BMW was still being disposed of by landfill. The total amount of BMW being produced was over 1.9m tonnes.

When this production is broken down by category the position is set out in Table 25.

Table 25 Biodegradable Municipal Waste Managed in 2004

Category of Waste	Tonnes Managed	Tonnes Landfilled	Tonnes Recovered	% Landfilled
Wood	175,330	14,180	161,150	8.1
Paper and Cardboard	821,903	446,306	375,597	54.3
Organics	780,460	696,955	83,505	89.3
Textiles	157,521	146,986	10,535	93.3
Total	1,935,214	1,304,427	630,787	67.4

Waste recovered in 2004 was diverted from landfill mainly through recycling and other recovery operations. This was implemented through separate collections of mixed dry recyclables via kerbside schemes and organic waste, together with dry recyclables collected through bring facilities.

Two major trends are apparent in the management of BMW in recent years

The overall amount produced has grown significantly since 1995 and is continuing to grow – up from 1.5m tonnes in 2001 to 1.9m tonnes in 2004. This upward trend over the period has been ascribed to population growth and increased economic activity.

There have been some inroads into reducing the proportion sent to landfill. By 2004, 67% was going to landfill compared with 85% in 2001. However, in absolute terms slightly more was being landfilled in 2004 than in 1995.

Diversion Required to Meet Targets

Notwithstanding the reduction in the percentage of BMW going to landfill it has been estimated that, taking account of the expected growth in the BMW production, the amount diverted from landfill would need to increase as set out in Figure 3.

Figure 3 Diversion necessary to meet targets

Audit Concerns

While the overall percentage of BMW going to landfill has been reducing the volume going to landfill has continued to increase in the period 1995 to 2004. It would appear, therefore, that there is a significant risk that Ireland will fail to meet the targets set down in the Landfill Directive. In the light of the possibility of EU financial penalties arising from any such failure, I sought the views of the Accounting Officer on the effectiveness of the measures taken to date and on the action proposed to meet the specified targets.

Accounting Officer's Response

The Accounting Officer informed me that he is confident that the National Strategy on Biodegradable Waste forms a credible basis for the achievement of the landfill diversion targets. The Draft National Strategy on Biodegradable Waste was subjected to a public consultation process under which submissions were received from many key stakeholders. These submissions facilitated the preparation of a more informed, robust and coherent Strategy, which should have high levels of support from stakeholders. The published strategy forms a comprehensive programme of measures and actions which is designed to comply with the Landfill Diversion targets as contained in the Landfill Directive.

He pointed out that considerable progress had already been made on the management of BMW between 1995 and 2004. Almost 33% of waste was recycled in 2004 compared with 11% in 1995. This is shown in Table 26.

Table 26 Biodegradable Municipal Waste Recycled 1995, 2001 - 2004

Year	Gross Quantity Available Tonnes	Landfill Tonnes	Recycled Tonnes	% Rate
1995	1,289,911	1,147,320	142,591	11.1
2001	1,525,315	1,291,464	233,852	15.3
2002	1,727,490	1,365,628	361,862	20.9
2003	1,855,505	1,317,560	537,944	29.0
2004	1,935,214	1,304,426	630,788	32.6

He also outlined the measures which are proposed within the Strategy, in addition to those in operation in 2004, in order to facilitate achievement of the landfill diversion targets in the areas of prevention, recycling and biological treatment, and residual waste treatment.

Prevention

National Waste Prevention Programme – a module to deal specifically with BMW is to be developed following publication of the Strategy.

The introduction of a "Pay-by-Use" system of waste management on 1 January 2005.

The continuation of the "Race against Waste" campaign with the objective of improving environmental behaviour.

Recycling and Biological Treatment

A Market Development Group of key stakeholders was established in late 2004 with the objective of driving forward the development of existing markets for recyclables and identifying new applications and markets for recyclables and secondary recycled products. Separate Working Groups were established for the priority BMW streams of paper/ cardboard and organics.

Local Authorities will use the Waste Collection Permitting system to introduce a requirement for separate collection policies in a uniform manner across their functional area.

Bye-laws governing the presentation and collection of waste will be adopted by local authorities to support the implementation of separate collection systems.

Regulations will be reviewed on a regular basis to ensure that the legislative provisions for waste collection and waste treatment facilities support the objectives of the Strategy to the greatest extent practicable.

The provision of pre-treatment (e.g. Material Recovery Facilities) and biological treatment facilities by local authorities will be supported by capital grant assistance.

Residual Waste Treatment

Residual waste treatment will be required to at least cater for the proportion of BMW which cannot be prevented or recycled (including either material recycling or biological treatment) and which is not allowed to be landfilled under the provisions of the 1999 Directive.

Thermal Treatment with energy recovery is seen as a robust residual waste treatment technology which can also cater for non-BMW and industrial wastes. The 10 Waste Management Plans for the regions/ counties of Ireland recognise this integrated policy role of thermal treatment and facilities have been proposed by local authorities for the treatment of residual waste within 6 of the regions.

Mechanical-Biological Treatment (MBT) – generally followed by thermal treatment or landfill — can also play a role in the pre-treatment of residual waste, particularly in the short-to-medium term when thermal treatment capacity is being developed. MBT capacity developed should be compatible with the treatment of source-separated organics in the future.

The Accounting Officer stated that the National Strategy on Biodegradable Waste sets out the total annual tonnage which must be diverted from landfill at a national level each year to meet Irish landfill diversion targets. These diversion requirements correspond to the available capacity which will be needed for alternative treatment methods to process the BMW diverted from landfill. The capacity will include appropriate waste collection infrastructure, pre-treatment infrastructure (such as Material Recovery Facilities) and final processing capacity for the prepared recyclable materials.

In order to optimise flexibility for the Strategy to achieve national targets, latitude was devolved to individual waste planning regions/ counties to decide how their Waste Management Plans could best address the landfill diversion requirements within the overall framework of the national targets. Each region/ county would be required to either provide the required capacity directly or alternatively to source the necessary capacity outside the region/county. These projected figures for alternative treatment requirements are to be kept under continuous review and updated regularly by each region/ county in order to ensure that sufficient capacity is available to facilitate the achievement of the required BMW diversion targets.

Evaluating Performance

In terms of the performance evaluation of local authorities by the Department, the Accounting Officer stated that the success of implementation of the management measures for the BMW stream will be measured against the level of waste generation, the rates of recycling and recovery for various materials, and ultimately the amount of BMW sent to landfill. The Strategy will be reviewed at regular intervals and will be subject to further development which will be designed to deliver the principal objectives and targets which have been established.

The Accounting Officer acknowledged that monitoring and review of strategy implementation will be crucial if the challenging targets are to be achieved. The following monitoring measures are proposed

Simple performance indicators outlining current performance and future targets in terms of BMW generation, paper/ cardboard recycling rates, textile recycling rates, wood recycling rates, biological treatment rates for organic waste, residual waste treatment rates and the level of landfill of BMW (See Table 27).

The EPA will issue regular reports on these performance indicators in its National Waste Report publications.

Each Annual Implementation Report to be prepared by local authorities on the implementation of the Waste Management Plan will record progress made in relation to the National Strategy on Biodegradable Waste over the previous year.

The Strategy Implementation Group will provide qualitative information in relation to the particulars of Strategy implementation and will make recommendations on the manner in which improved performance can be achieved.

In terms of the individual materials within the BMW stream, the following target levels are proposed.

Table 27 Proposed Target Levels

Material Recycling	Targets
Paper/ Cardboard	55% in 2010, 65% in 2013 and 67% in 2016
Wood	90% to 95% between 2010 and 2016
Textiles	15% in 2010, 20% in 2013 and 25% in 2016
Biological Treatment	Targets
Overall Diversion of food and garden waste	35% in 2010 and 48% in 2016
Home Composting	13.5% in 2010 and 2013, 16% in 2016
Separate Collection and Centralised Biological Treatment	25% in 2010, 33% in 2013 and 36% in 2016

Mr. John Purcell

I will start with chapter 5.1, which reports on the steps being taken to meet the targets imposed by a 1999 EU directive that requires member states to reduce the amount of biodegradable municipal waste being sent to landfill. The reduction was set with reference to the total amount, by weight, of biodegradable municipal waste generated in 1995. That is the baseline figure. The first target was that the amount of such waste sent to landfill by 2006 should be not more than 75% of that baseline figure. The corresponding targets for later years were 50% by 2009 and 35% by 2016. The directive allows certain member states to postpone the target dates by four years. Ireland has availed of this option in respect of the first two target dates. A decision on whether to invoke the derogation for the final date has not yet been considered.

Although good progress has been made in diverting waste from landfill in recent years, mainly by way of recycling initiatives, we are at the same time producing more biodegradable municipal waste. According to the most recent figures from the EPA, we consigned a greater volume of such waste to landfill in 2005 than we did in 2001 or even in the base year of 1995. In numerical terms, over 1.3 million tonnes went to landfill in 2005. However, the ultimate target to be met by 2016 — or 2020, if we invoke the four-year derogation — is 451,000 tonnes. That provides an idea of the extent of the challenge we face. Meeting that challenge will be all the more difficult in an era of strong economic growth and increasing population.

The direct financial consequences of not meeting the targets stem from the possibility of the imposition of fines by the EU Commission at some stage in the future. However, there are also environmental and health implications of the continuing resort to landfill as the default option. Bearing this in mind I sought the views of the Accounting Officer on the effectiveness of the measures being taken to meet the targets set in the directive. Page 75 of the report indicates that the Accounting Officer is confident that the national strategy on biodegradable waste forms a credible basis for the achievement of diversion targets. He goes on to outline specific measures being undertaken to that end. Delivering on the targets will primarily be the responsibility of the local authorities, with the Department overseeing strategy implementation by way of performance monitoring and review.

Expenditure on the Vote for the year totalled €2.5 billion. The main components of the expenditure were: €1.12 billion for local authority and social housing programmes; €418 million for the water and sewerage services programme; and €500 million for the local government fund. The fund, which has been in operation since 1999, contains the proceeds of motor tax as well as the Exchequer contribution from the Vote, and is used to make general-purpose payments to local authorities and to meet most of the expenditure on non-national roads. There was a surplus of €61 million in the fund at the end of 2005.

The environment fund accounts for 2004 and 2005 are also being considered by the committee — I believe for the first time. The environment fund was established with effect from July 2001 and is funded from the proceeds of the plastic bag levy collected by the Revenue Commissioners and from the environmental levy on the landfilling of waste collected by local authorities. The primary focus of the fund is waste management. There was a surplus of €45.6 million in the fund at the end of 2005. Both funds received clear audit reports for the years in question.

On the Vote, the committee expressed an interest in a few issues in recent times. The Tribunal of Inquiry into Certain Planning Matters and Payments is now in its tenth year. The cumulative expenditure to the end of 2005, shown in note 14 to the appropriation account, was €46 million and had risen to €62 million at the end of 2006. Those are figures supplied by the Department of Finance. However, it is a matter of conjecture as to how large the ultimate bill will be. During last week's meeting, the way in which the costs of the tribunals were controlled and assessed was the subject of a general discussion with the Accounting Officer from the Department of Finance. However, he was not in a position to be specific about the individual tribunals and how they operated. He suggested that the relevant sponsoring Departments would have more information.

The second issue concerned the ongoing cost of €700,000 for storing the electronic voting machines. Members will probably be aware of some developments in this area and I will leave it to the Accounting Officer to update members of the committee. There was also the arbitration award of €32 million on a drainage scheme in Limerick city to a contractor who had been removed from the job by the local authority. Strictly speaking the Exchequer contribution to that award is a 2006 account item.

To complete the picture, I will mention the following: the extent of the uptake of the rental accommodation scheme which emanated from my value-for-money report on rent supplements; the cost of remedial works at the Irish ISPAT site in Cork — a topic previously discussed by the committee; and developments in local government audit and accountability. As the Chairman mentioned, we also have the subject matter of the relevant correspondence for today's meeting, the cable network diversion costs on road works.

Chairman

Mr. Callan circulated a very full statement to us for which I thank him. He indicated that he would summarise it in his address to the committee. He has the floor.

Mr. Callan

That is correct. On the generality of the Vote and of the business of the Department in 2005, obviously the continuing and rapid growth in the population and economy in that year formed the background for most of the Department's activities during that year. In managing the largest capital allocation of any Department, we continued to advance major housing and water programmes under the National Development Plan 2000-2006.

Under our mandate for sustainable development, the Department oversaw important work on climate change, waste recycling and enforcement of environmental regulations. The Government aligned the national spatial strategy with the emerging new NDP, and the physical planning system continued to keep pace with the development demands of the country. New institutional arrangements were launched in the shape of the affordable homes partnership and a new industry initiative for recycling electric and electronic waste. The Department continued to support local government, as its most important business partner, in improving the efficiency, customer quality and e-enablement of its services.

As the Comptroller and Auditor General has said, total voted Exchequer expenditure by the Department in 2005 amounted to €2.393 billion, including the full elimination of a capital carry-over of €75.6 million from 2004. The environment and local government funds provided a substantial supplement to this, allowing for a total outturn of €3.239 billion. The Department availed of the flexibility under the capital envelope agreement to carry over some €76 million of capital into 2006. By the end of 2006, this carry-over had been fully spent and the forward carry-over into 2007 reduced to €20 million, just 1% of the Department's overall capital provision.

Our housing capital allocation supported the provision of more than 5,100 social houses in 2005, together with 1,350 units of voluntary housing and almost 2,700 affordable houses. These programmes continue to provide good value for money. For example, the average cost nationally of a new local authority-provided house is €165,000 compared with €308,000 for a new dwelling provided by the private housing market. A policy document entitled A Housing Policy Framework: Building Sustainable Communities was published at end 2005. This updated and redirected key housing policies, and its principles have since been reinforced in Towards 2016, the new NDP and the recently launched Delivering Homes, Sustaining Communities.

On water infrastructure, some 90% compliance was reached by the end of 2005 with the environment standards of the EU urban waste-water treatment directive. The operation of waste-water treatment plants was regulated for the first time regarding odour and noise and the Department increased the rate of grant assistance to local authorities to incentivise water conservation. The EPA recently reported on drinking water quality for 2005. The overall picture is good, but more work is still needed to bring private group schemes into better compliance and to ensure systematic quality monitoring by local authorities in all cases.

The national target to recycle 35% of municipal solid waste by 2013 was effectively reached in 2005 and will be well surpassed. This is relevant to the examination by the Comptroller and Auditor General of our landfill targets to which I will return. A new industry-led scheme was rolled out for recycling electric and electronic waste, with immediate success. The EPA reported in 2005 on its examination of the problem of large-scale illegal dumping whose discovery some years back provoked widespread and justifiable concern. The office of environmental enforcement of the EPA concluded that large-scale illegal dumping is no longer taking place. Appropriate action on identified contraventions is being actively pursued.

An emissions trading scheme was put in place by the Department and the EPA in 2005 for a three-year pilot phase which will prepare major Irish industrial emitters of greenhouse gases for their more onerous objections in the 2008 to 2012 phase of the Kyoto Protocol. The necessary national allocations plan was approved by the EU Commission.

The Department continued to support the local government system in improving and modernising its performance. The second annual report on service indicators, published in July 2006, measured the following: the impact of a range of services provided to customers in 2005, for example opening hours of planning offices, libraries and motor tax offices; responsiveness of on-line service delivery, fire service mobilisation times and preplanning consultations; and overall scale of operation. In July 2005, the Department published two sets of guidelines for local authorities which are designed further to enhance the customer focus of local authority activities.

In line with a recommendation in the Indecon local government financing review, a new legislative provision was recently enacted to provide for the mandatory establishment of audit committees in local authorities. This was previously a discretionary matter. The committees, which it is intended to establish this year, will have an independent role in advising councils on financial reporting processes, internal control, risk management and audit matters as part of the systematic review of the control environment and governance procedures of local authorities. These strengthened provisions take into account the findings and recommendations of a follow-up report on the development of internal audit in local authorities, undertaken by the Local Government Audit Service value-for-money unit.

The results of a comprehensive new pavement condition study on non-national roads were published in 2005. These indicated that there has been a large growth in traffic volumes and the number of heavy goods vehicles on our roads in the past ten years. The study concluded that the economic upturn since the 1996 pavement condition study had fundamentally changed the loading regime on the non-national roads network, with much higher and more frequent loading by heavier vehicles now being the norm. The overall conclusion of the study was that the existing restoration programme required re-focusing to ensure that counties with the highest proportion of deficient roads would have their needs addressed in a reasonable timescale. The process of re-focusing priority investment under the restoration programme to areas of most need was commenced in 2005 and has been continued and strengthened since. Since 2006, the non-national roads investment programme has also supported the provision of strategic non-national roads which facilitate the implementation of the national spatial strategy.

Take-up by the motoring public of the on-line motor tax service operated by the Department from its Shannon office continued to grow in 2005 and by year's end some 30% of eligible business was being conducted through the system. The service was also extended in 2005 to include online first licensing of new and imported vehicles. The online service is used by at least 34% of eligible customers nationally and approximately 50% of eligible customers in Dublin.

I will abbreviate my prepared statement on the chapter on landfill targets. We have made considerable progress in certain areas of recycling. Unfortunately, some of this progress dovetails with work which needs to be done in increasing the diversion of biodegradable material from landfill. For example, packaging waste includes a significant proportion of biodegradable material. However, all packaging waste has been banned from landfill since 2003.

Recovery rates for wood, paper and cardboard are quite high and it is feasible to expect these waste streams to reach their targets by the various deadlines in accordance with the current rate of progress. However, we agree fully with the analysis of the Comptroller and Auditor General that we face a steep challenge. Recycling rates for textiles and, in particular, organics, that is, food and garden waste in the domestic context, are still low and we have considerable ground to make up in this area. The Department takes seriously the need to accelerate progress towards the targets. The preparation of a national strategy following widespread consultation with stakeholders speaks for this and gives us an important platform for the work we must do.

I have appended some diagrams to my prepared statement which show the various elements involved in implementing the strategy. Suffice to say, all these elements — not only some of them — will need to be deployed to improve our performance in managing biodegradable waste.

On prevention and reduction, we have tasked the Environmental Protection Agency with important work, particularly of developing a national waste prevention strategy. We are seeking a reduction of 6% in the generation of biodegradable waste from this type of work. On source separation, we aim to achieve 50% coverage in brown bin collections from householders and 70% coverage from the private sector. We need to increase home composting of relevant waste by 40% and recycling of paper and cardboard from 46% to the current target of 67%.

All of this will demand that collection and treatment infrastructure be built up, quality standards for compost be developed, markets be developed and industry and business be engaged. We have already taken some steps. For example, in December 2005 funding of €10 million was committed for two biological facilities in the Dublin region, at Kilshane Cross and Ballyogan. When constructed, these facilities will provide the necessary infrastructure to enable householders to be provided with a brown bin for food and garden waste.

In the area of composting infrastructure, the Department understands there are now 37 composting facilities in place countrywide. Some of these are relatively small-scale but, nonetheless, this figure compares to only ten in place in 2003. There will be a substantial amount of residual biodegradable waste to be managed after opportunities for recycling and biological treatment have been fully deployed.

With the landfill route excluded by the directive, waste-to-energy treatment is likely to be one of the environmentally required solutions, as is already the case in European Union countries such as Germany, Denmark, the Netherlands, Austria and Belgium. At present, proposed facilities in counties Meath and Cork have received the necessary regulatory approvals but are subject to judicial challenge. The proposed facility for the Dublin region, which has featured in the news since I sent the committee my statement yesterday morning, is also going through the regulatory process.

In summary, our experience and track record in dealing with other challenging waste targets gives us confidence regarding the undoubtedly difficult task ahead of achieving compliance with the landfill directive.

Chairman

Thank you, Mr. Callan. May we publish your statement?

Mr. Callan

Certainly.

Deputy Deasy

Mr. Purcell referred to last week's appearance before the committee of Mr. David Doyle from the Department of Finance. I understand Mr. Doyle indicated he was not in a position to indicate to the committee how much the tribunals would cost. He also suggested that the question be put to the sponsoring Departments. In the case of the Mahon tribunal, on which the media has focused in recent years, the sponsoring Department is the Department of the Environment, Heritage and Local Government. How much will the Mahon tribunal cost?

Mr. Callan

As the Comptroller and Auditor General indicated, total costs paid out by the Department to the end of 2006 in respect of the Mahon tribunal stand at €62 million. Most of these were administrative and legal costs. Costs of third parties only began to be adjudicated on by the chairman of the tribunal in late 2004 and payments under this heading only commenced in 2005. In that year, €45,000 was contributed from the relevant subhead to the payment of third-party costs. A much more substantial amount, some €6.642 million, was committed in 2006. So far in 2007, a sum of €340,000 has been paid to reimburse third-party costs. The total of payments in the three years in question stands at just over €7 million. This figure covers some 28 claims from the period dating from the tribunal's commencement until 2002.

Claims are ruled on by the tribunal which does not speak for the quantum of claim. The bills are then submitted from the tribunal to the Department and processed by us through a legal cost accountant. This is a process of negotiation which is acceptable to most claimants. Nearly all claims so far have been settled on a voluntary basis and without final recourse to the taxing master.

To give members an impression of the effectiveness of our processing work on claims, €7 million in claims has been paid out to date. The gross bill for those claims was €9.18 million, so we have achieved a 23% reduction on the face of the claims sent to us.

Interest has focused on future claims and I have not concealed that. I have discussed this issue with the committee in previous years, albeit not that extensively. When third-party claims are submitted to the Department in significant numbers, significant liabilities will arise. From the tribunal, we know that there is a balance on claims up to the end of 2002, which is likely to cost €5 million to the Department on top of the €7 million which we have paid so far. We have not got certainty on these because they have not been processed yet, but that is a ball-park figure.

Deputy Deasy

Does the Department have a contingency fund for this?

Mr. Callan

No.

Deputy Deasy

Why not? It was pointed out that the Department of Education and Science has a contingency fund for liability issues.

Mr. Callan

The Department of Education and Science has operated a contingency fund for claims that will be made on it from the redress board. It deals with other commissions without a contingency fund, such as the commission on child abuse. My understanding is that the arrangement was made for the redress board at the suggestion of the Comptroller and Auditor General and agreed with the Department. The redress board is dealing mainly with awards of compensation. The planning tribunal is not dealing in that currency at all, but with legal costs.

The six or seven Accounting Officers responsible for other tribunals which will generate legal costs are in the same position as I am regarding the non-provision of a contingency fund. We are open to a hearing from the committee about what it would wish us to do in this area, but we currently have limited hard information on the likely quantum of future claims. It is not impossible to chase these down, but it will be difficult to do so.

Deputy Deasy

It would be useful if the Department did that. It would be useful if Mr. Callan had an opinion on whether it was closer to €300 million or €1 billion. The Secretary General of the sponsoring Department does not have an opinion. It would be useful to have that kind of information so that people could make a policy decision. Is that not Mr. Callan's role? Is it not incumbent upon him to provide advice on the ultimate cost to the State, be it a legal cost or otherwise?

Mr. Callan

The Department is not running the tribunals. The computation of a credible and detailed estimate of all future costs from the work of the planning tribunal would have to be undertaken by the tribunal. We can provide assistance, but we do not have the access to the details that would allow us to make these calculations.

Deputy Deasy

How is it the case that Mr. Callan's boss came up with the figure of €1 billion? Did Mr. Callan have any input into that?

Mr. Callan

Different figures have been mentioned in the last week. What is common to all who participated in that debate is the uncertainty of the future amount of damages that is likely to arise.

Deputy Deasy

I want to get to the bottom of this. Mr. Callan is the head of the Department and his boss has come up with a figure of €1 billion, and he has been supported by the Tánaiste. Has Mr. Callan no role in this? Did he have any input into this? Does he have an opinion on it?

Mr. Callan

The Minister is clearly able to speak for himself. I am not aware that he came out with the figure mentioned by the Deputy, but that is a matter for the Minister.

Another part of the Department's role is relevant in considering this question of whether the committee would want us to change accounting procedures so as to better embrace future contingencies. It is arguable that it may not serve the public interest for the Department to be making an over-expansive estimate of future legal costs. On behalf of the taxpayer, we are now trying to manage those costs down and we are doing so with some success. That is also part of my role.

Deputy Deasy

My opinion is that the Secretary General should try to get his head around this and come up with some kind of figure. It would be useful if the sponsoring Department involved had some idea about how much this will cost. Mr. Callan is giving us the impression he does not have an opinion on this issue and is not too bothered about the overall outcome and cost. I think that is wrong.

Mr. Callan

It is not a question of having an opinion. At the moment, my position is that accounting procedures do not require this and do not authorise me to do this. I readily accept that the committee may wish to suggest a change in accounting policy, whereby we would compute these future liabilities. If that recommendation were made, we would certainly——

Deputy Deasy

In fairness, I thought the Secretary General would say that. Accounting policy does not require him to do that. Surely after the last couple of weeks, Mr. Callan would have some human curiosity to find out what exactly this will cost the Department. Surely the head of the Department would try to come up with some idea of how much this will cost. Mr. Callan is obviously not going to answer the question and that is fine.

Mr. Callan

The Department has made adequate provision for all of the costs of the tribunal in all of the years in which it has operated, without the need to transfer in extra money. We have prudent and appropriate provision for the expenses of the tribunal.

Deputy Deasy

I will try to summarise what the Comptroller and Auditor General said about landfills and our position on the EU waste directive. He has some concerns that we could be heading into a situation in which potential fines arise. The response from the Department's Accounting Officer was quite reassuring, as it seems that measures are being taken that would prevent that from occurring. Does Mr. Purcell believe that we are heading towards the imposition of fines by the European Union owing to the transgression of the directive?

Mr. Purcell

A great deal of progress has been made in diverting biodegradable municipal waste from landfill. At the same time, we are producing much more waste owing to an increased population, increased commercial activity and so on. We are currently producing 1.9 million tonnes. The latest figures from the EPA are for 2005, which state that 1.3 million tonnes of waste are still going to landfill. We have sought and received a four-year derogation. We will need to reduce that figure to 967,000 tonnes by 2010, which is very challenging.

Deputy Deasy

So we will incur fines.

Mr. Purcell

It is difficult to say. The Department's record in reaching targets in other areas of the environment has so far been reasonable, which gives the Accounting Officer confidence that the strategy will work. I am not technically competent to say whether the measures will work. Some of the measures coming on stream are dependant on thermo-solutions, such as incineration and so on. Until they come on stream it will be difficult to meet the initial target I just set out.

Deputy Deasy

I have a figure that 65% of waste still goes to landfill. Mr. Callan mentioned waste to energy in his opening remarks but for ten years we have heard about this Government's incineration policy and that the Department is putting a scheme together but there has not been much progress.

Mr. Callan

That is one instrument among others and while it is important it is not the only one. I have stressed that the strategy rests on four or five key elements. Progress is as was set out in my statement. Waste-to-energy installations have successfully moved through the planning and environmental regulatory processes in two instances, Meath and Cork, although they are now subject to judicial review, and there is a planned project in Dublin which, as one might expect for an issue that is so environmentally vexed, is meeting a certain amount of opposition but is making its way through the planning and environmental regulatory processes.

More generally, on the likelihood of the imposition of environmental fines, from my position as head of the Department, we take this issue very seriously. The Commission made it clear that across a range of areas, particularly the environment, it will become more active in the imposition of fines on member states. Four member states, all with long records of environment activity, have already been subjected to fines for breach of environmental directives or are about to be in that position. Greece and Spain have both received environmental fines and Italy and France are on the way to having fines imposed on them by the court. That speaks for itself. The risk is real for all EU member states. We take it seriously and try to manage programmes to avoid this risk.

Deputy Deasy

Waterford County Council is a pioneering local authority with a good recycling, composting and waste separation regime. It has state-of-the-art materials recovery facilities. Over the last five or six years, waste volumes and, therefore, costs have increased. In the last year, a €150 charge has been levied on each household in the area. People were asked to involve themselves in this process and they did so willingly. There was an initial feel-good factor about what they were doing to the benefit of the environment and they bought into the plan. Since then, however, their costs have risen rapidly and substantially.

The officials who are managing the waste system in the local authority say the same thing again and again, namely, that the Department is not funding them properly. The Department is endangering the local authority's future involvement in the waste stream. It is coming under increased pressure to opt out and hand it over to private consortia, which will mean that the public will end up paying even more. The Department must look at those counties that have bought into what the Department asked them to do because they are not being properly funded.

The waiver system is a good example. It is hit and miss throughout local authorities. In Waterford, there is a waiver system but private companies in other areas do not offer one. The system is not perfect, I have even written to the Ombudsman about it, but in their favour, the officials say it would cost too much to extend the waiver. I asked some months ago if the Department of the Environment, Heritage and Local Government would contact the Department of Social and Family Affairs to establish a model for local authorities. I thought the Department might get back to me with some kind of response. Essentially, local authorities are asking for access to the social welfare database so they can transcribe it when it comes to a waiver system, making it easier for them to operate it. They do not believe they should fund the cost of a waiver system as well.

Mr. Callan

This is a complex area. Only ten years ago there were 200 landfills operating under local authority ownership. Now there are only 25 in local authority ownership and five in private sector ownership. Ten years ago, domestic waste collection was monopolised by local authorities but now 60% of collection is undertaken by the private sector. There are debates about the need to reduce reliance on landfill, to develop recycling and alternative methods of waste treatment. At the same time, if landfill continues to be seen as a cheap option, which it is often not, we disincentivise the emergence of desirable alternative forms of treatment.

Responding to that, the Department issued a consultation paper on a possible approach to waste regulation in autumn 2006. We have had a full response from stakeholders, industrial and commercial operations in particular, but also others. We flagged the issue of the possible need to build a public service obligation into the contracts under which private sector collectors work. There is a fear on the part of some local authorities in Dublin that some private sector companies are entering the market and cherry-picking middle-class areas of high consumption that are good payers for services while not offering services to less well-off communities.

All of these issues have evolved from rapid changes in the waste industry in the past decade. We do not have all the solutions, and we have put certain thoughts into the paper and received responses, some of which support us and some of which point to other solutions. The Minister will shortly respond to these.

Deputy Deasy

If I said to Mr. Galvin that in conjunction with the Department of Communications, Marine and Natural Resources, the system by which water and sewerage infrastructure is provided is so slow that it holds back development, be it a housing estate or marina, what would the response be? I have seen in my own county, particularly in the last five years, that projects are not coming onstream quickly enough. The process in the Department is so slow that it holds back development.

Mr. Gerry Galvin

During 2006 we took steps, in consultation with the City and County Managers Association, to streamline procedures for dealing with the small schemes advanced through the water services investment programme, more of which were advanced than had been the case prior to 2004. We reduced the number of stages at which local authorities must come to us for approval and we hope to see the benefit of this in the new schemes that will comence construction in 2007.

We continue to have difficulties with the number of statutory processes through which our type of scheme goes. These include our dealings with the Department of Communications, Marine and Natural Resources with regard to foreshore licensing.

Deputy Deasy

We will issue a report on this, which I hope will include a strong recommendation. What does Mr. Galvin mean? Is he referring to amalgamating the foreshore licence process with the planning permission process and streamlining this because it is Dickensian?

Mr. Galvin

The Department of the Environment, Heritage and Local Government is not responsible for foreshore licensing. That is governed by the Foreshore Acts.

Deputy Deasy

Is the Department taking it from the Department of Communications, Marine and Natural Resources?

Mr. Galvin

No, we have been in close communication with that Department with a view to streamlining procedures on our schemes.

Deputy Deasy

What does Mr. Galvin mean by "streamlining"?

Mr. Galvin

I mean speeding up the process.

Deputy Deasy

Does that mean putting a time limit on valuations?

Mr. Galvin

It means agreeing protocols with them which would facilitate their examination of our applications, agreeing the type of conditions in advance that would generally apply except in very particular circumstances.

Chairman

Before I call Deputy Curran, I want to explore briefly the issue of the costs of the Mahon tribunal with Mr. Callan. The Tánaiste and Minister for Justice, Equality and Law Reform has estimated that the third-party costs of the Mahon tribunal will be quite significant and that the total cost of the tribunal will be approximately €1 billion. That is unlikely to be a top-of-the-head sum given the Tánaiste's background as an eminent senior counsel who remains in close contact with leading practitioners in the Law Library. As Attorney General he would have had an informed view and the same is true of him as Minister for Justice, Equality and Law Reform. He must have had a basis for estimating it at €1 billion.

Mr. Justice Mahon, in his letter to Mr. Kieran Coughlan, the Clerk of the Dáil, said this was incorrect and that the costs would come in at a figure not exceeding €300 million. He was assuming in that figure that the legal costs of everybody who appeared would be paid but indicated that those who did not co-operate with the tribunal would not have their costs paid so his estimate is less than €300 million.

Mr. Doyle, the Secretary General of the Department of Finance was here last week and he advised that the members raise the issue with the Secretaries General of the sponsoring Departments of the tribunals, which for the Mahon tribunal is the Department of the Environment, Heritage and Local Government. In his introductory remarks to this section of the hearing, Mr. Doyle said that, in the costs of the beef tribunal, two thirds of the total were third-party legal costs and the remaining third included all other costs, administrative and legal. If one applied that rule of thumb, two thirds and one third, to the figures available at the moment for the Mahon tribunal, he estimated the cost would be €340 million. He added, however, that this might be an under-estimation because of the complexities of the Mahon tribunal and the issues that interlock and so on. He thought it would be significantly in excess of €340 million.

The Department of Education and Science has appeared before us. Mr. Callan mentioned a contingency fund in his reply to Deputy Deasy, but I and other members of the committee are concerned, not that the Department has a fund, but that it would acknowledge in its accounts that there is a contingent liability and estimate, in so far as it can, what that contingent liability might be.

The last time the Department of Education and Science came before us we noted that it had a footnote to its accounts expressing the view that it might have a contingent liability of €1.3 billion arising from the redress board expenses and payments out and legal costs. This is four times the original estimate to which the Department stuck rigidly for two years, until it eventually came up with a figure of €1.3 billion. I appreciate that its method of estimation is much easier than that of the Department of the Environment, Heritage and Local Government for the Mahon tribunal because, with the assistance of the Comptroller and Auditor General, the committee was able to establish the number of outstanding payments and, by multiplying the number outstanding and paid by the average payment plus 20% of legal costs, it was possible to come up with a figure. We think the Department has over-estimated the figure after sticking rigidly to €250 million for years. The committee's figure is closer to €1 billion or €1.1 billion.

The Tánaiste and Minister for Justice, Equality and Law Reform takes the view that the Mahon tribunal will cost €1 billion, Mr. Justice Mahon says it will be less than €300 million, the Department of Finance, speaking through its Secretary General, takes the view that it is in excess of €340 million and the Accounting Officer in the Department of the Environment, Heritage and Local Government has no view. That is why we are pressing the issue. Could Mr. Callan come up with a note on his Department's future accounts which indicates its best estimate of the contingent liability arising from the Mahon tribunal? Otherwise, because the sums of money are so large, there will be a fairly large black hole in the financial statements of the Department of the Environment, Heritage and Local Government, if there is a liability of €1 billion, which was not mentioned at all. Before Mr. Callan replies, I will ask Mr. Purcell to speak because he indicated last week that he would think about this and see if he could help the Department.

Mr. Purcell

At last week's meeting, we had a good general discussion with the Accounting Officer of the Department of Finance about this matter. I said in response to questions from Deputy Fleming and others that I would reflect on it to see if there was anything I could do. I have reflected on this in respect of the Mahon and other tribunals. I could examine the approval, recording and control systems in place because there is an administrative side to the tribunals. I would not get involved in any way in the judicial or quasi-judicial activities that are the mainstay of the tribunals. I intend to examine these matters after discussions with the chairpersons of the tribunals. I will report on that, probably in my annual report on the appropriation accounts for 2006.

When I do that, I will gain an insight into the feasibility of coming up with what I believe to be an accurate estimate of the contingent liabilities as we call them here. I may decide that it is not possible to do this. I have been through the mill already with the redress board. While I was finally vindicated, it was said that I was guesstimating, so to speak, and so on but, as I said at the time, I do not engage in that kind of activity. I will consider the feasibility of this when considering the systems in operation in each of the major tribunals.

On a point of clarification on what Deputy Deasy said, the Department of Education and Science does not have a contingency fund. The normal process for dealing with such matters is through the Estimates. The Department of Education and Science is the same in this regard as this Accounting Officer's Vote.

It is correct that there is a contingent liability. At my behest, the Department of Education and Science came up with a figure which has been changed over the years and has taken into account our work in this area. For 2005, the Department has an estimate for the Commission to Inquire into Child Abuse of €28 million. At this point, the Department estimates that a provision of €46 million will be required to meet the remaining costs during 2006-2008. This tentative estimate should be treated with caution, given that the commission has not yet completed the final assessment of a large part of third-party legal costs. We have tried to spread the gospel, so to speak, and it has been heard to some degree.

There is a broader question of recording contingent liabilities in the appropriation accounts proper. Last week, it was mentioned that the larger liability in future will be for public service pensions. While that is provided for under financial reporting standards in the semi-State area, we will have to move something in that direction when dealing with Vote accounts. I am in informal discussions with the Department of Finance concerning this.

Mr. Callan

I thank Mr. Purcell for his approach which I see as constructive and one with which the Department will co-operate. I am not withholding from the committee some better estimate of the likely totality of third-party costs of the tribunal. No protagonists in the debate of the past week have any certainty on the estimation of these costs. The Department is in the same position. We have not carried out a detailed exercise and we have not arranged to access the tribunal's records which would be necessary to carry out any authoritative exercise in estimating future costs.

It is my view, not disputed by the Department of Finance, that it is not required of us under present accounting conventions to complete such an exercise with an accuracy which the committee may appreciate. Therefore, it would be wrong of me to put another guesstimate, as it were, into play. If it is decided in accordance with a revised policy approach to these matters that we calculate future liabilities in finer detail, we will co-operate with that.

There is a question that these costs will not be ruled on until 2008 and 2009. Admissibility is still in doubt. The door is open for costs claims. It is not so much on an indefinite basis, but the tribunal has not yet formally invited cost claims for the post-2002 period. It may have received some but it has not actively encouraged the submission of claims. Most claims arising for this period will not yet have been formulated.

Deputy Curran

I appreciate the Comptroller and Auditor General's comments. It is prudent that for a tribunal that has been running for nine years, we should have some estimate of a contingent liability, if feasible. I welcome the intervention of the Comptroller and Auditor General in that regard.

The significant improvements made in the area of recycling and targets reached must be acknowledged. The committee has spent time discussing the issue of recycling and biological treatment. The volume going to landfill is ahead of target, primarily because of economic growth. Much emphasis has been placed on recycling. The internationally adopted hierarchy of options of dealing with waste lists measures such as prevention, minimisation, reuse, recycling and so forth. I am disappointed that there are no tangible examples of targets in this regard.

The Department highlights pay by use and the "race against waste" campaign with the objective of improving environmental behaviour. Much of this is directed at the consumer and the consumer responds. When recycling facilities are provided, people use them. However, few specific targets for prevention of waste have been set for the manufacturer, the distributor and the retailer. Are there specific annual targets in the prevention of waste?

Mr. Callan

As the Deputy properly implied, waste prevention represents the honours course in policy and measures to improve our waste management. It is true, as it is in other countries, that we have not developed as many concrete and effective measures under this heading. We have mandated the Environmental Protection Agency to produce a waste prevention strategy varying biodegradable waste targets. This will be introduced in a few months.

Deputy Curran

Is that strategy the first time that a serious effort has been made at the prevention end from the point of view of the producer rather than the consumer?

Mr. Callan

It is the first time we have tried to elaborate a range of measures to be taken under the prevention heading in a systematic way. That is why it is called a strategy. There may have been occasional initiatives which had this effect but this is the first strategic attempt in the area of waste prevention. From the tentative discussions we have had with the EPA, I have indicated that we expect a 6% dividend in the direction of our targets from what will come under this heading.

Deputy Curran

That means the reduced production of waste.

Mr. Callan

It means 6% of the necessary diversion of biodegradable waste from landfill will come from prevention measures. More will come from recycling and residual treatment and so forth.

Deputy Curran

My problem is that 6% seems a very small percentage in such a fast-growing economy. It will hardly make us stand still.

Mr. Callan

We would like it to be more. I agree with the Deputy. At the same time, we are late starters in this area. We have more of a head of steam built up under some of the recycling——

Deputy Curran

The diversion from landfill has primarily been as a result of consumer behaviour because consumers have recycled. I am looking at those at the other end, be they manufacturers, producers, wholesalers, distributors or retailers. They do not seem to come into the equation at the front end, which is where my point on minimisation would apply.

Mr. Callan

This area is complex because we are dealing with business and industry, which trade freely with other economies within the EU and throughout the world. A number of industry-led schemes are already operating in the recycling area. The longest-established is Repak, which deals in packaging waste. There are elements of its operation that encourage prevention. Repak imposes higher charges on its members according to weight of packaging and so on. One could say this discourages the heavier elements of waste packaging and encourages people to take a more benign attitude towards producing less waste by weight than they might otherwise do.

There may be other signals we can give through pricing mechanisms that would help this. Some stakeholders would wish the Minister to increase the landfill levy of €30 per tonne which has operated since the inception of the levy four or five years ago, and some consideration will be given to that by the Minister or his successors.

Deputy Curran

When will the EPA strategy be available?

Mr. Callan

It will be ready in a few months, certainly in the first half of this year.

Deputy Curran

Having considered the issue, while I acknowledge the improvements made, particularly with regard to recycling and the end user, prevention and minimisation do not seem to be keeping pace with growth. It is an area of concern. If Mr. Callan is back before the committee next year, we will see if he has made progress specifically at that end.

The Comptroller and Auditor General did not have particular problems with the Vote, and neither do I, but some issues come to mind. While the level of resources involved might be smaller when compared with other issues with which we have been dealing, it is still relevant. There was an underspending of approximately €10 million, or 20%, on private housing grants. Part of that was owing to local authorities recouping claims for the disabled person's grant and essential repairs schemes. As public representatives, we know the number of attempts to claim by individuals. Yet, when we examine the Department's figures, the schemes are not all taken up. What is the problem?

Mr. Callan

There are two elements that slow down the spend by local authorities. One is the time it takes to process claims and the fact some local authorities are less streamlined than others in running the necessary checks on claimants in terms of reports, be they reports from occupational therapists or otherwise. These administrative requirements, which have to be gone through before local authorities will pay a grant, may take different lengths of time in different local authority areas. Delay in some areas has led to perhaps fewer than expected claims from the Department.

The other issue is that under the scheme that operated up to now, the Department has paid two thirds and the local authority has been liable for one third. In some cases, budgetary pressure may have constrained local authorities from dealing with all of the cases with which it might have been possible to deal within a given year.

In a sense, I am speaking about the past because, following a new housing policy statement announced by Ministers just last week, we are revising the schemes in this area applying to people with disabilities, older people and so on. We are looking at the experience and some of the failings of the schemes——

Deputy Curran

Is that to streamline them and make for a quicker turnaround?

Mr. Callan

Yes. We are reorganising the schemes. They have yet to be shaped in detail but they will operate from later in the year. There will be a mobility aids scheme, which will apply to fairly straightforward work and will fast-track limited grant aid, primarily to address mobility problems associated with aging. A housing adaptation grants scheme will be introduced to assist the needs of people with disabilities and a scheme of housing aid for older people will assist in making habitable the homes of older people living in unfit or unsanitary conditions. This will replace both the existing essential repairs scheme and the special housing aid for the elderly scheme.

Nothing stands still. We have been aware of shortcomings associated with a number of these schemes. We have redesigned them and announced our intentions.

Deputy Curran

The Department has redesigned the scheme. What specific changes have been made? They will still be administered through the local authorities so how can the Department ensure an improvement in the length of time from when a person makes an application until the grant is approved and the work can progress? It often happens that people apply for these as a matter of urgency — an elderly person might have slipped, broken a hip and gone to hospital — but they seem to take for ever to be processed.

Mr. Callan

We are dealing with that in several ways. First, the mobility aids grant scheme will have a modest cap in terms of a maximum of approximately €6,000. The quid pro quo is that far less bureaucracy will be associated with it. It will be intended to fast-track grant aid to people on lower incomes and there will be an income limit, with a maximum annual household income threshold of €30,000.

With regard to the more expansive scheme of housing adaptation grants for people with disabilities, we are increasing the maximum grant to €30,000 and the contribution to local authorities will also increase from its present level to 80% instead of two thirds. We hope these changes will deal with some of the blockages previously associated with the schemes.

Deputy Curran

With regard to Ballymun regeneration, which is a very substantial project, in the year in question the expenditure was €98 million, bringing the total figure to just over €400 million to date. The anticipated expenditure for the subsequent years is €196 million. This is substantial expenditure. Is that done through the local authority, Dublin City Council? What is the mechanism? While I do not mean to be critical — it is something that often arises — when a Department spends money, it often goes to the local authority and we lose track of it because a different auditor looks after it from there on. It is a substantial amount on a substantial project. Mr. Purcell might comment.

Mr. Purcell

A special company, Ballymun Regeneration Limited, was set up by Dublin City Council and it manages the project. We are carrying out an examination of the entire project and have been facilitated by both the Department and Ballymun Regeneration Limited in doing so. The field work for this review is complete and the report is almost ready to go. We also engaged an academic to consider the social aspects of the project. There is a social dimension to this issue and the report would be incomplete without input in this regard. We await that input from the academic in question, who is a specialist in this area, and I expect the report will be finalised within two months. Those Deputies who are lucky or unlucky enough to be members of the next Committee of Public Accounts can look forward to that.

Mr. Callan

I am aware that the Comptroller and Auditor General and his staff are carrying out this value-for-money review in respect of Ballymun Regeneration Limited. I welcome this examination and am confident that the project and its administration will stand up as the flagship we believe it to be.

Regarding accounting arrangements, we pay these substantial grants directly to Dublin City Council for onward transmission to Ballymun Regeneration Limited. The funds go through the council's administrative system. In most instances, however, claims are certified directly to the Department by Ballymun Regeneration Limited itself. For good accounting reasons, we do not pay the company.

Ballymun Regeneration Limited is a special vehicle body that was set up ten years ago, albeit with close links to Dublin City Council. It has facilitated an intensive focus for a considerable period on the needs of a particular deprived area. Social gain was the underlying objective and the results of many of the useful initiatives and programmes undertaken at Ballymun are becoming increasingly apparent.

Deputy Curran

How long has the project left to run?

Mr. Callan

It will run until 2010 or 2011.

Deputy Boyle

I have some questions on chapter 5.1, which deals with landfill targets. Ireland has a poor record in terms of waste generation per capita. If we can trust the figures in this regard, they show that the rates of waste generation per person are twice those of the Netherlands, for instance, a country with a population of 14 million and a land area the size of Munster. This is the prime factor we must tackle in dealing with the diversion of waste from landfill. Our recycling infrastructure is inadequate. We do not have a paper mill, for example, and the only glass recycling plant on this island is in County Fermanagh. There are some forms of recycling that we do not have the population volume to justify but there are other methods that should be available and are not.

Questions must be asked about the amount of material labelled for recycling that is sent out of the State. Does the Department have figures indicating the volume of this material and its end use? Is there any monitoring of whether it is recycled at the end of its term? There are press reports of huge volumes of material labelled recycled being sent all the way to China. What potential environmental benefit is there in sending such a volume of material such long distances and how is it counted against whatever criteria we are obliged to meet under the draft EU waste directive?

There is a lack of consistency in waste collection and recycling among local authorities. The Department does not seem to play any role in ensuring there are consistent standards in regard to the setting of targets and seeing how those targets can be met. That is an inconsistency between local authorities and within local authority areas themselves, and the existence of both a public waste collection system and a private system seems to introduce far too many variables for the Department to control in terms of meeting our obligations under this directive.

Mr. Callan spoke of the necessity, as he defined it, of what he referred to as waste-to-energy plants in meeting our obligations under the landfill directive. He is aware of a draft directive is going through the European Parliament in respect of which there was a vote last week against the incineration industry which wished to have incineration reclassified as a recovery rather than a disposal method. The vote was comprehensively beaten.

I am disappointed to hear in Mr. Callan's presentation, and in constant policy references by the Department, incineration referred to as waste to energy. It is an expensive method of achieving energy and is a possible contributor to greenhouse gas emissions because it is a combustion process. I fail to see the logic in promoting incineration. I can understand its promotion as an easy disposal option and how that is supposed to encourage less waste because incinerators will have a capacity that will need to be fulfilled in any case. However, it seems to be an admission that the waste will have to be created to provide that capacity.

Incineration reduces the volumes of landfill but it is still necessary to send to landfill at least 30% of the waste that is originally put into incinerators. There is a particular problem in regard to toxic waste incineration which is proposed for Ringaskiddy in Cork. There is no toxic waste landfill facility in the State and there is a recommendation from European directives that such a facility should be located no further than five miles away from a toxic waste incinerator. It seems there is no policy to meet this recommendation. What is the Department's policy in this regard?

Mr. Callan

I will try to take all the Deputy's questions. The Deputy is broadly correct that in EU terms, we have a relatively high rate of domestic waste generation per capita. It has been marginally reducing as a result of some of the successful efforts on recycling that we have made but it remains high. There are two reasons for this, the fact that we also rank high in the European spectrum in terms of economic prosperity and GDP and that we are relatively late starters in regard to recycling and more advanced methods of solid waste treatment.

Deputy Boyle also spoke about the lack of indigenous facilities for recycling, the loss of the glass-recycling plant in Dublin and that the only paper mill on this island is in the North. The Department agrees it would be desirable that the recycling industry should develop it further and generate jobs. Encouragingly, this is beginning to happen in regard to electrical and electronic waste. It is equally true, however, that there have been closures and commercial failures in this area.

In respect of the export of waste for recycling, we must bear in mind that it is well accepted at EU and international level that, like many other businesses, waste management is now a mature international industry and that, subject to appropriate controls on such matters as export, transport and international transfer of waste, the export of waste, particularly green waste, for recycling should be perfectly reputable and form part of the repertoire of most developed countries. I cannot immediately find the figure, but my recollection is that, at this stage, some 70% to 80% of Irish recyclables are consigned to export. The figure would have been lower when we had major facilities such as the glass bottle plant. The Environmental Protection Agency produces the figures and the figure is in the range I mentioned.

The Deputy mentioned——

Deputy Boyle

Can I ask for a further meeting? In particular, will Mr. Callan supply the figure for the volume of material being sent to China and the proportion of recyclable waste leaving this country? Could he also tell the committee if there is any monitoring in respect of whether the end product is recycled because there is a major question mark over this?

Mr. Callan

I will give the Deputy a note on that. In respect of the question of consistent policy direction to local authorities on waste collection, the Department has issued a number of policy directions about this in recent years, notably that, from 2005, waste collection systems were to be based on weight, the better to reflect the "polluter pays" principle.

Chairman

There is a vote. The order is Deputies Joe Higgins and Burton. Deputy Ardagh is pairing with me for the purposes of the vote. If Deputies want to be present at the vote, we will return to the order when they return.

Mr. Callan

The privatisation of the waste industry, whereby local authorities and the private sector provide services, could not have been prevented in the modern era and society with all the support that exists at national and European level in respect of enabling competition. It would not have been a viable policy option for the Department to maintain a local authority monopoly over waste collection services. I readily accept that anomalies exist at local level from the mixed system we now have. I made some responses to Deputy Deasy in terms of the consultation paper which we published and are now about to respond to further in respect of possible waste regulation.

In respect of waste to energy, the Deputy mentioned the recent European Parliament vote. That may not speak for the final version of the directive. I have it from people dealing with these matters in Europe that the final version of the directive will permit waste-to-energy plants operating to the best modern standards to have their operations classified as recovery.

In respect of toxic waste, I can add to what Deputy Boyle has said in that, about two or three years ago, the Environmental Protection Agency formulated a national hazardous waste management plan. The plan flagged up the need for at least one major landfill to deal with toxic waste.

Deputy Boyle

Is Mr. Callan satisfied that the current figures being used by the Government for the likely cost of carbon emissions are safe, that €15 per tonne is the likely cost into the foreseeable future, and that the extent to which we exceed our Kyoto commitment, which was 23% last year and 25% this year and which shows no sign of decreasing, can be sustained over the period up to 2012? What is Mr. Callan's estimation of the likely cost to the State?

Chairman

Does Deputy Boyle wish to be excused?

Deputy Boyle

Yes. Perhaps I could look at the record afterwards.

Mr. Callan

We discussed this issue during last year's session. It is true that Government estimates of the cost of purchasing carbon credits have been premised on what I would call a ball-park estimate of €15 per tonne of credits. I emphasised last year that there is nothing sacrosanct or certain about that. There is variability in the market and we simply chose a reasonable estimate at the time on the advice of consultants. This estimate of €15 still underlies the figure which has appeared in the new national development plan of €270 million to be provided for the purchase of credits between now and 2012.

Pending the handover of this task to the National Treasury Management Agency, something we hope to do shortly when the Carbon Fund Bill is enacted, we made a number of minor investments in the carbon-trading market. We will only know the value of what we are getting for that investment after a certain period of time has elapsed. We have reasonable assurance that it will deliver us carbon credits for in or around €10 per tonne, but this is not absolutely certain at this point.

At the moment, the market for the period from 2008 to 2012 is trading at approximately €12 per tonne. As I say, there may be variability in the future. We are dealing with variability in this matter.

Deputy Ardagh

We are looking at spending €270 million between now and 2012 at €10 or €12 per tonne. Of what are the 25 million tonnes comprised? What effect would this have on climate change? Can Mr. Callan give the committee a feel for what we are buying? What are we physically buying? What effect would 25 million tonnes of saving in the environment have as against our just paying to be allowed to excrete 25 million tonnes?

Mr. Callan

If the Deputy does not hold me too precisely to the figures, roughly speaking, Ireland's limit for the period from 2008 to 2012 is fixed at approximately 55 million tonnes of CO2 equivalent. There is a basket of greenhouse gases, but we are talking in terms of CO2 equivalent emissions annually in that period. To the extent——

Deputy Ardagh

Is it what is contained in the national development plan or is it what is allowed under the agreements?

Mr. Callan

That is fixed under the burden-sharing arrangements. First of all, it is recognised by the Kyoto Protocol and was negotiated at EU level. It is calculated with reference to a figure of 113% of what Ireland's emissions were in 1990, so 113% of the 1990 figure is 55 million. We must not exceed that.

Deputy Ardagh

Is that figure per year?

Mr. Callan

Yes, per year. We must manage the economy so that the balance sheet will show that our emissions have not exceeded that amount by the end of the 2008 to 2012 period. To the extent that they exceed that figure in real terms, we must buy carbon credits, units of account recognised by the institutions of the climate change convention.

Deputy Ardagh

What is the equivalent of €270 million in millions of tonnes? When the national development plan was decided on, the figure of €270 million represented so many million tonnes. Output projections from the Department should be given to committees.

Mr. Callan

The Government believes that it may be necessary to purchase up to 3.6 million tonnes of carbon credits.

Deputy Ardagh

Per year?

Mr. Callan

Yes, six times that figure is 18 million tonnes.

Deputy Ardagh

This is calculated on the basis that it would cost €15 per tonne between now and 2012. It will increase in cost from the present rate of €10 to €12 per tonne.

Mr. Callan

The figure of €15 was based on work undertaken by consultants one year ago. People might think we were being too clever if we tried to change it. It may be possible to acquire this quantum of credits for less than €15 per tonne.

Deputy Ardagh

That is a prudent, conservative figure.

Mr. Callan

We believe it is conservative but Deputy Boyle argued that it was not sufficiently prudent.

Deputy Ardagh

The figure we must buy is 6% over the agreed figure, 3.6 million tonnes over the original 55 million tonnes.

Mr. Callan

Yes.

Deputy Ardagh

What efforts are being made to reduce the amount of credits we must purchase?

Mr. Callan

Many such efforts are being made. The intent of the Government is to maximise the scope of domestic measures.

Deputy Ardagh

Can Mr. Callan be as specific as possible?

Mr. Callan

Targets are being set under the energy Green Paper and the White Paper that will be published next week will increase the contribution of renewables to electricity generation from between 4% and 5% to 15%. Bio-fuel initiatives have been developed and building insulation and energy performance standards will become stricter. Vehicles will become more carbon-efficient with EU and wider international co-operation. There is a tension between achieving the emissions reductions we seek and the tendency to shop for bigger cars in prosperous countries such as Ireland. A suite of measures is envisaged. We have been working on this for a decade.

Deputy Ardagh

Mr. Callan referred to increasing renewables from between 4% and 5% to 15%. At present there are 34 on-shore wind farms. Does Mr. Callan envisage an increase in the number and capacity of wind farms?

Mr. Callan

That is an important element.

Deputy Ardagh

How many will there be?

Mr. Callan

I do not wish to respond because this is under the remit of the Department of Communications, Marine and Natural Resources. Last year, the Department of the Environment, Heritage and Local Government finalised new guidelines on wind farms that are designed to facilitate the development of wind farms in suitable locations. Their passage through the planning process will be made easier.

Deputy Ardagh

Can Mr. Callan tell the committee what the Department is doing specifically to make it easier?

Mr. Callan

We are giving advice to planning authorities and promoters of wind energy on locations that are suitable and appropriate design mitigation features. We are trying to avoid conflict and encourage the emergence of better proposals for wind farm development.

Deputy Ardagh

I am sure Mr. Callan heard the Eddie O'Connor radio interview on "Morning Ireland". If he did not, it must have been replayed to him. He stated that, in Texas, one is encouraged to increase from 500,000 MW to 1 million MW and to make a profit. How far are we from having that attitude to wind energy?

Mr. Callan

We want to see all commercially viable energy in the mainstream. The Stern report on climate change pointed out that peripheral forms of energy will be more expensive to produce. The more mainstream they are, the more economies of scale are included in delivery and cost. Production costs will decrease if renewable energy has a bigger share of the Irish energy mix.

Deputy Ardagh

Will there be more wind farms in the country in the next five to ten years?

Mr. Callan

Yes, that is the policy intention.

Deputy Ardagh

What is the position regarding Sellafield and nuclear energy? What action has the Department of the Environment, Heritage and Local Government taken? What success has it had in ensuring that any escape of radiation will not affect the Irish Sea or the Irish environment?

Mr. Callan

The two court cases that were taken by the State and with which the Department was closely associated have now ended. Arising from recommendations made by judges in these cases, the arrangements for notification have been improved. There is better co-operation with regard to advance notice vis-à-vis Sellafield and better access for officials to see the installation. The European Commission objected to the most recent Irish case on the basis that it was a matter of Community competence. Since the Commission has vindicated its claim to competence in nuclear safety, the Irish Government has taken a strong line and demanded that it be seen to be much more active in regard to problematic installations such as Sellafield. The Commission has followed up our approach by taking a closer interest in safety issues at Sellafield and issuing notices that it wishes to inspect the facility.

Deputy J. Higgins

To return briefly to the costs of tribunals, in particular the planning tribunal, am I correct that legal costs can be divided into two major categories? The first is the costs of lawyers working for the tribunal and the second costs that will be awarded to legal representatives of parties appearing before the tribunal.

Mr. Callan

In a sense that is correct. The costs up to the end of 2006 amounted to €62 million, of which the costs of the tribunal's internal legal team amounted to just over €33 million. The total figure of €62 million comprehends approximately €6.5 million in third-party legal costs and there are other costs of €22 million.

Deputy J. Higgins

What are they?

Mr. Callan

Non-legal staff, printing, IT equipment and administrative costs.

Deputy J. Higgins

That would include putting the capital in place, which will not recur to the same extent.

Mr. Callan

The running costs are approximately €10 million per year, net of third-party costs.

Deputy J. Higgins

The vast bulk is made up of the fees for tribunal lawyers and third-party fees.

Mr. Callan

Yes, the predominant cost of the tribunal is fees paid to the legal team. The third-party costs amounted to approximately €7 million.

Deputy J. Higgins

Can Mr. Callan recapitulate how the rates charged by the tribunal lawyers were set and by whom they were agreed?

Mr. Callan

The rates were agreed in 1997 when the tribunal was established. They were agreed by the Department of Finance, the Attorney General and the team. The rate for 1997 was €1,714 per day for senior counsel and €1,142 for junior counsel. Those rates were revised in 2002 by the Department of Finance to €2,250 and €1,500 respectively. Rates were also paid of €1,000 for solicitors and €600 for research counsel.

Deputy J. Higgins

They were negotiated by the Attorney General at the time, now the Tánaiste and Minister for Justice, Equality and Law Reform, Deputy McDowell.

Mr. Callan

No, the 2002 rates were negotiated in October 2002.

Deputy J. Higgins

That was during his watch as Minister for Justice, Equality and Law Reform. The costs of that side of the tribunal, bearing in mind the number of lawyers working for it, can be readily identified and are predictable.

Mr. Callan

They are not entirely predictable because staff will be shed as modules run down. It depends on the number of modules and the amount of work the tribunal is carrying out at any given time.

Deputy J. Higgins

It is predictable in contrast with third-party costs.

Mr. Callan

It is.

Deputy J. Higgins

Let us move on to third-party costs, which threaten to be the elephant in the corner. Was there at any stage a policy on what third-party legal teams would command in fees? Was a specified maximum for having a barrister or solicitor present decided at the beginning of the tribunal?

Mr. Callan

This tribunal and probably others were modelled on the High Court and there was no model of the type suggested by the Deputy.

Deputy J. Higgins

Is this not the nub of the problem? At no stage did any agent of the State, political or otherwise, say that this would become uncontrollable, that certain people in the Law Library considered themselves a law unto themselves and could charge whatever they wanted? Mr. Callan mentioned the High Court, of which I had experience in September 2003. On a Wednesday morning a senior counsel did a few hours' work on routine injunction proceedings. The cost to me was €7,500 and the junior who studied his back for the two hours charged €5,000. Two days later the same two gentlemen on the same issue charged another round of €7,500 and €5,000, making a total of €25,000 for between four and six hours' work. Was it not very clear to the Government, or to Mr. Callan as Accounting Officer, at an early point in the tribunal that it would become utterly uncontrollable if the ladies and gentlemen to whom I have referred were allowed to rip people off in that way? Should limits on fees not have been imposed at the time to overcome the problem?

Mr. Callan

Bills have been published to deal with the situation in the manner suggested by the Deputy but they have not, so far, been enacted.

Deputy J. Higgins

After ten years.

Mr. Callan

The original and revised terms of reference were mandated by the Oireachtas and the frameworks set by tribunals legislation.

Deputy J. Higgins

The Oireachtas certainly never agreed to give carte blanche to the Law Library to command whatever fees its members wished.

Mr. Callan

My Department takes very seriously its duties on the vetting of claims made for third-party costs. We employ a legal cost accountant whose efforts have reduced claims by approximately 23%. Ultimately these matters can be submitted to the Taxing Master but, to date, that has not happened.

Deputy J. Higgins

That is a game to be played in the High Court. I went to the Taxing Master and the fees were reduced a little but the lawyers allow for a Taxing Master's reduction of, say, 10% when putting in their claims and increase them accordingly. That is not a serious approach to controlling costs to the taxpayer.

Mr. Callan

The Deputy seems to be saying that this area needs to be regulated in primary legislation applicable to tribunals but we must operate the machinery given to us.

Deputy J. Higgins

Yes, I accept that the political leadership carries responsibility. I wish to address the question of waste management and do not want to denigrate the effort that has been expended and improvements that have been made in recovery and recycling. I take it that the figures supplied have come from the national waste database reports of the Environmental Protection Agency, EPA.

Mr. Callan

That should be the source.

Deputy J. Higgins

A total of 446,000 tonnes of paper and cardboard — 54% — went to landfill in 2004. I find this stunning considering that the separation and recycling of paper and cardboard has been carried out by many householders for decades. Despite what Mr. Callan said earlier on mild approaches to businesses regarding cutting down on packaging, one need only enter a retail outlet to see that packaging on goods is unrestrained. The Repak scheme merely provides an alibi that allows companies to send off cardboard containers while the unfortunate consumer is left with the other unnecessary packaging. No measures have been taken against companies to force the minimisation of packaging.

Mr. Callan

Our approach to the recycling of packaging waste is one of the most successful in Europe and we have reached recycling levels of around 60% for such waste. Some EU countries have higher rates than that but they use a certain amount of waste to energy to achieve those targets. We probably have as high a rate of recycling of packaging waste as anywhere in Europe.

I accept the point that we can and must do better. Newsprint waste does not count as packaging waste, despite efforts that have been going on for many years, and still continue, to bring about a producer responsibility initiative with the newspapers for the recycling of newsprint waste. There is scope for dealing with some of the 446,000 tonnes the Deputy mentioned and achieving a greater recycling yield.

Deputy J. Higgins

I wanted to ask similar questions regarding organics and textiles. I find the fact that 93% of textiles, clothes and so on, go to landfill hard to comprehend when plastic bags from various agencies seeking used textiles for industrial rags and so on come through my door three times a week. Glass figures have not been given today because we are discussing biodegradable items, but the State allowing the only glass-recycling factory to close is incredibly short sighted.

I may return to other points later. Bin taxes are mounting a considerable burden on many taxpayers, especially PAYE taxpayers. Mr. Callan said that large-scale illegal dumping has diminished or gone. I presume he means the horrific landfill sites in Wicklow and elsewhere, and this is to be welcomed. Unfortunately, anecdotal evidence suggests there is a great deal of small-scale illegal dumping, which I deplore and condemn, and illegal burning, which is very damaging to the environment. In this respect, the more these bin taxes are increased, the greater the damage to the environment.

On waste disposal, Mr. Callan mentioned the privatisation that has been allowed to occur, and this is a growing problem. Why, as Mr. Callan pointed out, do some local authorities in Dublin allow such companies to cherry-pick? Only last night the Dáil sat until 11 p.m. to bring risk equalisation to the health insurance sector. Perhaps we need waste equalisation legislation to ensure that the privateers who would like to make a fortune from the most lucrative end of the waste disposal industry are curtailed.

Mr. Callan

We appreciate that there are policy questions to be answered in this field and that is why we have put out a consultation paper, which received a heartening number of responses, that will help us in finding some of the solutions to these complex questions.

Deputy Burton

May I ask a question on waste that I think causes many people who put out different recycling bins to wonder? Regarding materials that go to municipal recycling depots or into green bins, such as Tetra Pak, plastics and other recyclable materials, how much is finally disposed of through landfill and how much is recycled either in Ireland or abroad?

Mr. Callan

I do not have the precise figures available to me at the moment but I will try to establish the answer to the Deputy's query in as much detail as possible and send her a note in that regard.

Deputy Burton

People make a great deal of effort to recycle and households can have five or six bins, but many believe that the bulk of material for recycling may end up in landfill. Could a sign be placed at recycling depots explaining what happens to recyclable materials? If material is used in landfill and not recycled, then the cost of driving a car to a depot is a waste.

Mr. Callan

That is a suggestion we can certainly consider. We claim that 35% of household waste and 60% of packaging waste is now properly recycled. We treat those claims seriously, although there are difficulties in calculating statistics on waste. The EPA has taken this job seriously in recent years and, like the Central Statistics Office, CSO, if it finds an error in its calculations, it will report it and correct the data.

Deputy Burton

Regarding the paragraph on electronic voting, where does the issue stand now? I understand the machines are being moved to Army premises and that this involves a major Army operation. How many machines are now stored in a central Army facility? Some returning officers have entered into leases on premises to store machines. Does Mr. Callan have an estimate of the cost outcomes in terminating some of those leases? Has the Department commissioned or carried out any further work on the software problems which were identified? There were suggestions from the Department that the cost of modifying the defective software was relatively minor, a couple of thousand euro per machine. Has the Department continued to work on that project or is the project essentially suspended?

Mr. Callan

With regard to the storage of the electronic voting machines, we are in the process of consigning approximately 4,000 or 60% of the machines to a storage facility provided by the Army at Gormanston Aerodrome. The Army is not providing the transport; that is being taken care of by the Department in co-operation with the Office of Public Works. To date, some 1,800 of the machines have been transferred to Gormanston. They and the other machines to be stored in Gormanston will be prioritised on the basis of removing machines from the locations which are most expensive and, so to speak, leaving behind, for the time being, machines that are stored free of charge. This operation will be completed with as much efficiency as possible.

There are outstanding arrangements with regard to ongoing rents between some of the returning officers and the people renting accommodation to them. In many cases that is not a problem. Many of the rents are short term and can be terminated at a month's or a number of months' notice. In a few cases there are rather long extensions on the leases. Returning officers should negotiate their way out of those arrangements in the most economical way possible. We have been discussing the ways and means of doing this with the Office of Public Works and, with that office, will engage a property specialist to minimise the cost of the exit terms that will be involved.

The decision to move the machines to centralised storage came from the Government as a result of the recommendation of the Commission on Electronic Voting, which published its final report in July 2006. The reasons for consigning the machines to centralised storage in Gormanston, and possibly in another facility, are not simply based on the desire to minimise costs. There is also the issue of improving the quality of security for the machines, given that they are not being deployed for the election this year. There will be both uniformity of security and economy in the storage costs.

I cannot give the Deputy a precise figure for the exit terms the returning officers will have to negotiate with their landlords. However, we have examined this closely and we are confident that within approximately two years the exercise will prove economical as well as improving the security of the machines.

Deputy Burton

Is it correct that the Department is still contemplating amending the software of the machines in line with the recommendation of the Commission on Electronic Voting? Would that be done on site at the Gormanston facility, which will be guarded carefully by the Army?

Mr. Callan

There are two elements to the improvement of software. The Commission on Electronic Voting recommended that relatively minor improvements be made to software components of the hardware. It also recommended that the election management software should be entirely redeveloped. That is a more significant software redevelopment but it would not have serious implications for the machines. That is work to be commissioned. We would move away from the original software programme, which was on a Microsoft Access platform and cost us approximately €0.5 million to develop originally, and have new software developed for the election management. The commission estimated it would be a reasonable relative cost.

Chairman

A final question, Deputy.

Deputy Burton

So the Department still envisages using the machines for election purposes in the future and upgrading the software. I note that the Department tendered in the newspapers for traditional wooden polling booths. What is the situation with that? I understand the Department has ordered a number of new booths.

Mr. Callan

The tender to which the Deputy refers was undertaken not by the Department but by the Office of Public Works at the request of the returning officers. This is a normal process of renewing materials required for the election. For the purpose of economising on the purchase of the goods involved, the returning officers collectively engaged the Office of Public Works to tender for the items.

Deputy Burton

Does the Department still plan to use the voting machines in the future? The election is due to be held in May 2007, while the local and European elections will be held two and a half years later. The machines will be almost ten years old then. For most computer-based equipment, such as a washing machine that is used in the home or even a car, a ten-year lifespan would be considered quite long. In the original reports the machines were estimated to have a lifespan of 25 years. Is that realistic any longer? They have been moved around, stored and are now being transported to Gormanston.

Mr. Callan

Twenty years was the estimated life period of the machines. We are confident that the estimate and guarantee are solid. They are relatively simple computers, if I can call them that. They do not have the complexity of personal computers. The banks expect a 15-year lifespan for ATMs, which also discharge an important function and are subject to considerable wear and tear. The policy issues surrounding the timing of different steps to build greater confidence in the machines are now being considered by a Cabinet committee, as the Minister has announced.

Deputy Burton

The company that made the arrangements has gone into liquidation. What impact will that have on the Department? Is the Department now reliant on the original Dutch parent company or must it find another contractor? Will an Irish company be created via the Department?

Mr. Callan

One Irish company has gone into liquidation but it has been replaced by a new Irish company. We were asked for consent to this arrangement and before giving such consent we consulted the Attorney General's office. On foot of its advice that it did not in any way diminish the status of the guarantees that were available and given to the Department originally, we indicated our consent. There was simply a change of name and constitution involving the Irish arm of this group of companies.

Chairman

I wish to question Mr. Callan on a number of issues. On the local government fund accounts, the allocation relating to public private partnerships by local authorities decreased dramatically between 2004 and 2005. What kind of work was involved and is it the case that there was no uptake?

Mr. Callan

If my memory serves me right, the scheme was terminated at the end of 2004. It was a pilot seed fund scheme that operated for two or three years. We encouraged local authorities to test various PPP approaches. The scheme involved providing relatively minor subventions to individual local authorities. It is no longer available to local authorities, save for the making of claims relating to the earlier period.

Chairman

On the environment fund, €83,917 was spent on the all-Ireland fridge freezer initiative. What was the nature of this initiative?

Mr. Callan

This was another interim initiative and it has, in effect, been replaced by the producer-led initiative on recycling of electrical and electronic goods which commenced in 2005. Before the launch of the initiative in question, there was a difficulty with regard to recycling the CFC content of fridges. It was felt that an all-Ireland joint effort in this area would be more effective. I am not too clear on the details but I am aware that a transit point was established in Dundalk in respect of the collection of fridge waste and that consignments of such waste were transported to a specialised facility in the UK. We gave some assistance to the project but it has not been in operation since we went our own way with the establishment of an industry-led scheme in 2005.

Chairman

On local authority and social housing programmes, there was an underspend of €71 million. Each week I am visited by significant numbers of people seeking either local authority housing or assistance with completing applications for affordable housing or one or other of the social housing programmes. An underspend of €71 million is extremely large when one takes into account the demand that exists. Is Mr. Callan in a position to explain the reason for this underspend?

Mr. Callan

There was never any underspend on the main local authority housing programme. The €71 million would primarily have related to underspending on the voluntary housing programme, the Ballymun project and other urban regeneration schemes. It did not relate to the main local authority construction programme, which has always, in recent years, used its full allocation or more.

Chairman

Under recent practice in respect of affordable housing, instead of yielding a percentage of the houses or units constructed, developers pay money to local authorities. Is this money tracked by the Department in order to ensure that it is reinvested in housing? The system for the provision of social housing units by the private sector has not worked as originally intended in the legislation enacted by the Oireachtas. However, it has generated a significant amount of money in lieu of the provision of dwellings. Is the money to which I refer tracked and is it reinvested in housing?

Mr. Callan

It is ring-fenced for housing purposes and we sanction its use. It is subject to audit in respect of the limited purposes for which it may be applied. We are confident that the money is properly tracked and used for bona fide housing purposes.

Chairman

At a minimum, there are serious time lags in respect of taking money instead of a portion of the dwellings in a housing scheme. I presume the money is used for once-off purchases of private houses by local authorities rather than for the construction of houses by them. Is that correct?

Mr. Callan

I understand it is used for both purposes.

Chairman

Is Mr. Dowling in a position to indicate the percentages involved?

Mr. Des Dowling

We do not have precise data in that regard. There is a range of options, including subsidy, available. As the Chairman noted, most of it would not be spent on direct construction because that is financed through our main programme.

Chairman

On the housing rental programme, the rental accommodation scheme was introduced on a pilot basis by different local authorities. How is the scheme operating?

Mr. Callan

The scheme has moved beyond the pilot stage and is being mainstreamed. It is fully up and running in approximately 15 or 16 local authority areas. We expect it to be fully implemented by all local authorities this year. There were early teething problems, some of an IR nature and others relating to the difficulty of sourcing sufficient high-quality accommodation. These have largely been overcome. By the end of last year we had satisfactorily helped approximately 2,800 people to move into suitable and high-quality rented accommodation. Through the process of dealing with these clients and examining their needs, we found direct local authority accommodation for a further 2,000 people. This year we aim to meet the needs of 5,000 people through the rental accommodation scheme, RAS.

Chairman

Were the 2,800 people accommodated by and large the same individuals who were in receipt of rent subsidy from the HSE? Are they not simply being categorised under a different heading rather than representing new families placed in appropriate accommodation?

Mr. Callan

Yes, it is from that source that the vast bulk of the clientele for this scheme will come.

Chairman

The point I am making is that anyone not familiar with the system would form the impression that an additional 2,800 families had been housed. That is not the case because much of this is simply a recategorisation of people who were already in private accommodation and in receipt of rent subsidy. These individuals and families are now part of the rental accommodation scheme.

Mr. Callan

The accommodation in question must be long term and high quality in nature. In many instances, the accommodation will be new. Otherwise, a more durable contract with landlords would be required. The purpose of the scheme was to give more weight to local authorities.

Chairman

I understand the workings of the scheme but that is not the issue on which I am focusing. Members who represent urban constituencies are familiar with the fact that private landlords have, over the years, rented to families that require accommodation. The families in question were entitled to rent subsidies from the health boards and latterly the HSE. The rental accommodation scheme is a substitute for that scheme. Of the 2,800 families who benefit from the rental accommodation scheme, how many were not rehoused but simply recategorised as coming under the rental accommodation scheme? In other words, how many did not move house and were previously in receipt of a rental subsidy from the health boards?

Mr. Callan

I do not have the details to respond to the question but I can try to provide them. There is a definite direction in the scheme towards improving the quality of accommodation. I emphasise that it is not meant purely to be a classification programme. We hope there will be an increasing direct build component to the scheme and local authorities will, possibly on a PPP basis, engage with the private sector in developing new rental accommodation suitable for this class of person.

Chairman

Will Mr. Callan correspond with the committee and inform us how many of the 2,800 families were additional families being accommodated in private rental accommodation?

Mr. Callan

I will do that.

Chairman

Development levies are a major source of income for local authorities. Does the Department keep track of them? How much was collected in 2006, for example?

Mr. Callan

Approximately €500 million was collected in 2006.

Chairman

I understand the expenditure of this sum of €500 million is an executive rather than a reserve function in local authorities. Is that still the position?

Mr. Callan

From a technical point of view, that is a fair description of the position. However, local authorities are required to publish three-year capital programmes which will also be approved by the elected members. The framework for capital expenditure by local authorities is approved by the elected members.

Chairman

There is significant managerial discretion over the expenditure of this money, whereas heretofore the finances of local authorities were a reserve function of the members.

Mr. Callan

Borrowing and the approval of the annual estimates of expenditure are reserve functions. The capital programme is brought before the council but is not as constraining a budgetary framework as the annual estimates.

Chairman

Do the local government auditors audit this fund?

Mr. Callan

While it is not a separate fund, it is ring-fenced in terms of the purposes for which moneys may be applied. The auditor has to examine this to ensure moneys are not being used outside the statutory purposes indicated in planning purposes.

Chairman

Will Mr. Callan provide an update on the compensation position regarding the Limerick main drainage scheme?

Mr. Callan

At this stage, the case has been concluded save in respect of the negotiation of the legal fees due to the contractor. The quantum of these is being negotiated between Limerick City Council or its representatives and the contractor's representatives. The compensation award for €32 million has been paid. My Department has recouped most but not all of this amount to Limerick City Council. We are withholding an amount pending consideration by the council of the potential or possible liability of others, namely, professional advisers in relation to the management of the case.

Deputy J. Higgins

On the electronic voting machines, if the word goes out from the committee that the country's entire voting system is in military custody, our reputation will take a nosedive.

Does Mr. Callan have responsibility in regard to any aspect of the buy-out of the M50 toll bridge, including the arrangements to be put in place and the timing for so doing?

Mr. Callan

No, that is a entirely a matter for the Department of Transport and the NRA. As the East Link toll bridge is on a non-national road, it might involve the Department but I have not thought through the issue. The West Link toll bridge is on a national motorway.

Deputy J. Higgins

Does the Department have any responsibility arising from its responsibility for the billions of taxpayers' money being spent on each side of the M50 toll bridge? Does it have a say, for example, in how soon the barriers will be lifted as a result of the deal done between National Toll Roads and the Government?

Mr. Callan

The Department does not act for the Government in this matter. Whereas we may be consulted on the environmental dimension of certain motorway developments — our archaeologists and so forth give observations on these matters — we are not involved in this particular case.

Deputy J. Higgins

Large sums of taxpayers' money are spent on the production of drinking water. It is a great achievement in any society that every citizen has access to good, clean, healthy water. It is an ongoing scandal that structures and regulations are still not in place to save billions of litres of pure drinking water being wasted every year owing to the lack of building regulations. For example, 750,000 new homes have been built in the past ten years. It would have been a simple matter to introduce a regulation requiring each new home to have a rainwater tank which could be used for gardening, outside washing or other purposes. Why is the Department not pushing these types of simple initiatives? Why not require old toilets which use large volumes of water to be replaced? Why has the Department not changed building regulations to insist such requirements are in place? This would save billions of litres of good drinking water which are wasted every year.

Mr. Callan

The Department sympathises with the Deputy's concern and arguments. We have been incentivising local authorities to cut down on their wastage of water through leaking mains and so forth. The unaccounted-for water in some local authorities is as high as 50%, in other words, an examination might show that only 50% of the water produced by a local authority at a water treatment plant reaches the point of delivery. We have been trying to drive down this figure to around 20% because, in principle, it would be a more economic way of providing more water than paying for new plants. International experience indicates that the gains made after this point are not as great and it is not necessarily as justified to chase the rate of loss down below 20%.

Many issues arise in relation to building regulations. A significant percentage of new homes are apartments. Perhaps 60% to 70% of homes now built in the greater Dublin area are apartments. It may not be as easy to have people harvesting water for themselves in these circumstances. Dual plumbing may be necessary for some of the solutions the Deputy has in mind. There are difficulties in prolonged dry weather and so on, as well as health and commercial issues where there is merchandise in storage. In principle, building regulations should be moving more in the direction of sustainability, be it improved energy performance or improved water management. We accept the general thrust of the Deputy's concern.

Chairman

Will Mr. Purcell now conclude?

Mr. Purcell

It is my intention to include the drainage contract in Limerick in my 2006 report because it was in that year that a substantial liability fell on the Exchequer. There was a contract for more than €9 million and the cost of doing that work, with the arbitration findings, replacement contract and so on, is in excess of €50 million. I am happy to hear the Accounting Officer saying that there are other considerations about culpability and that these have been followed up. We will certainly examine that in the 2006 report.

We spoke about contingent liabilities earlier and, for the avoidance of doubt, I reiterate what the Accounting Officer said about the appropriation accounts. There is no requirement in public financial procedures for Accounting Officers to estimate contingent liabilities in their accounts.

Chairman

Equally, there is no prohibition.

Mr. Purcell

There is no prohibition and I see it as a desirable development. A working group is being set up under the chairmanship of the Department of Finance which is looking at revising the public financial procedures, and we will be participating in that. We may well be able to forward the agenda in the context of that work. The Department expects to have that revised version out later this year, so it is not a long-term project.

Deputy Higgins is gone, but there is no harm in pointing that the Tribunals of Inquiry Bill 2005 has been before the Oireachtas for some time. Section 39 of that Bill provides for the situation envisaged by the Deputy. It is a regulation-making power for the Minister for Justice, Equality and Law Reform, with the consent of the Minister for Finance, and having regard to a reasonable remuneration for services, including legal services provided to the inquisitorial proceedings, to determine the maximum amounts of various categories of costs which may be paid to counsel or solicitors engaged by parties appearing before the tribunal, or to the tribunal's counsel or solicitors. In the event that these costs would have to be taxed, those maximum amounts would have to be respected by the Taxing Master. It is over to Members of the House to bring progress on that issue.

I was certainly aware that fines had been imposed by the European Commission for landfill infringements. Greece was mentioned in one case. Its failure to comply with waste legislation in Crete led to a fine of €20,000 per day. That gives us an idea of the kind of fine that might be applicable if we do not live up to our commitments on that directive.

Chairman

May we note Vote 25 and dispose of Chapter 5.1? Agreed. Is there any other business? No.

The witnesses withdrew.

Chairman

The agenda for our next meeting on Thursday, 1 March 2007 is as follows: 2005 Annual Report of the Comptroller and Auditor General and Appropriation Accounts, Vote 39 — Department of Health and Children, Vote 40 — Health Service Executive, and the annual report and financial statements of the HSE for 2005.

The committee adjourned at 2.45 p.m. until 11 a.m. on Thursday, 1 March 2007.