(Secretary General, Department of Defence) called and examined.
Chapter 11.1 — Border Duty Allowance.
Mr. Michael Howard
We are considering the 2007 annual report of the Comptroller and Auditor General and Appropriation Accounts: Vote 36 — Department of Defence; Vote 37 — Army pensions; and chapter 11.1 — Border duty allowance.
Witnesses should be aware that they do not enjoy absolute privilege. Members' and witnesses' attention is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons who are identified in the course of the committee's proceedings. These rights include: the right to give evidence; to produce or send documents to the committee; to appear before the committee either in person or through a representative; to make a written and oral submission; 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 persons identified in the course of proceedings who are not present may need to be made aware of these rights and provided with a transcript of the relevant part of the committee's proceedings if the committee considers it appropriate in the interests of justice.
Notwithstanding this provision in the legislation, I 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 by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions within Standing Order 158 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or of a Minister, or the merits of the objectives of such policies.
I welcome Mr. Michael Howard, the Secretary General of the Department of Defence, and ask him to introduce his delegation.
Mr. Michael Howard
From the Department of Defence I am joined by the head of corporate services, Mr. Pat Hogan, assistant secretary, Mr. Ciaran Murphy, and our deputy finance officer, Mr. Robbie Lyons. From the Department of Finance, we are joined by our colleagues Ms Mary Austin, Mr. Frank Griffin and Ms Joan Daly.
I invite Mr. Buckley to introduce Vote 36 — Department of Defence, Vote 37 — Army Pensions, and chapter 11.1, Border duty allowances. The full text of chapter 11.1 can be found in the annual report of the Comptroller and Auditor General or on the website of the Comptroller and Auditor General at www.audgen.gov.ie.
Mr. John Buckley
The net cost of running the Defence Forces in 2007 was €796 million. Approximately 70% of this net expenditure goes to the pay of Defence Forces personnel and civilian employees. Army pensions cost €182 million in 2007.
Apart from the domestic duties carried out by the Defence Forces, they also contribute to certain international missions and activities, including the Nordic battle group, the European Union force in Chad and a special Kosovo force.
The Defence Forces have undergone considerable restructuring in recent times following the publication of a White Paper in 2000. Consequently, much of the funding of the restructuring comes from the proceeds of property sales that were ring-fenced to modernise equipment and infrastructure. The Department also subvents the activities of the Irish Red Cross, the Civil Defence Board, the Defence Forces Canteen Board and Coiste an Asgard.
Turning to chapter 11 in the report, approximately €5 million per annum has been incurred in Border duty allowances since 2001. As a result of the peace process, the original rationale for the payments has ceased. The Accounting Officer has informed me that the conditions that led to the introduction of the allowances no longer exist, so the Department is reviewing the payments in the context of its action plan under Towards 2016 in consultation with representatives of the Defence Forces. The Accounting Officer will be in a position to update the committee further on these matters.
I thank Mr. Buckley. I invite Mr. Howard to make his opening state.
Mr. Michael Howard
Total gross expenditure on defence in 2007 amounted to €1.005 billion, comprising €817 million under the defence Vote and €188 million under the Army pensions Vote, the difference between my figures and those of the Comptroller and Auditor General's being gross and net. The pay, allowances and pension costs of the Defence Forces and the pay of civilians employed with the Defence Forces account for the bulk of expenditure. The defence Vote includes an administrative budget of approximately €25 million, covering the civil element of the Department.
At the end of 2007, the strength of the Permanent Defence Force — Army, Air Corps and Naval Service — was 10,430. There were 830 civilian employees attached to units of the Defence Forces and 383 civil servants in the Department of Defence. In addition, there were approximately 8,500 personnel in the Reserve Defence Force.
Significant further progress was made during 2007 on the programmes of investment in modern equipment and facilities for the Defence Forces. During the year, the multi-annual programme for the acquisition of armoured personnel carriers, APCs, was completed. The final 15 APCs were delivered at a cost of €36 million, of which €16 million was paid in 2007. This brought the total number of Mowag APCs to 80 at an overall cost of €120 million. Some 22 of the APCs are now in Chad and nine in Kosovo.
During 2007, a tender competition was initiated to procure light tactical armoured vehicles, LTAVs. Three vehicles have been selected to go forward to the trials stage of the competition, which is under way and expected to finish next month. It is intended to have a contract in place before the end of the year. An initial 27 vehicles will be acquired, 17 for overseas missions and ten for training at home. The LTAVs will complement the Mowag APCs in the conduct of peace support operations overseas and will fill a gap that exists between our soft-skinned vehicle fleet and the Mowag APCs.
A programme to provide the Air Corps with modern aircraft has been ongoing for the past number of years. The most recent acquisition has been the AW139 utility helicopter from Agusta SpA. Two AW139s were delivered in late 2006 and two in 2007. A further helicopter was delivered earlier this year and the sixth and final one will be delivered next month. The total cost of the six helicopters is €75 million, of which approximately €19 million was paid in 2007.
In July 2007, the Government approved the commencement of a procurement process for replacement Naval Service vessels. It is intended to acquire two offshore patrol vessels, OPVs, and one extended patrol vessel, EPV, with options for an additional vessel of each class. The competition was run in two stages and the first stage is complete. Following an evaluation of proposals received as part of the first stage, invitations to tender were issued on 12 September 2008 to qualifying shipyards in respect of the OPVs. Responses are due by 11 November. Subject to Government approval, it is intended to award a contract for the OPVs in early 2009. Regarding the larger EPV, the Department intends to undertake further analysis of the proposals received before proceeding to the next stage of the tender process. As with the OPVs, Government approval will be required before a contract is awarded.
The programme of improving the living and working conditions of military personnel continued during 2007. Expenditure on capital building works was €24.7 million while a further €12 million was spent on maintenance works. Major building works completed included new workshops at Casement Aerodrome, Baldonnel, at a cost of €3 million, the upgrade of accommodation at the naval base in Haulbowline at a cost of €2.4 million, an extension to the officers' mess at Custume Barracks, Athlone, at a cost of €1.4 million and the upgrade of accommodation at the Defence Forces training centre at a cost of €1.4 million.
I agree fully with the findings in the Comptroller and Auditor General's report on the payment of Border duty allowances. However, I would like to put on record that over a long number of years, the Defence Forces played a key role in the Border area in aid of the civil power. The conditions under which they operated were often quite difficult. They did not always have available to them the high standards of accommodation, facilities and equipment that are now in place.
It must also be borne in mind that in the past ten years, the Defence Forces have undergone an extensive programme of reform that is probably unparalleled in the public sector. This has seen the strength of the Permanent Defence Force reduce from approximately 12,750 in 1996 to the current authorised strength of 10,500. During the same period, six barracks were closed and, as the committee will be aware, a further four barracks, all in the Border area, are due to close next January.
As the Comptroller and Auditor General indicates in his report, personnel in receipt of the Border allowance cannot claim the security duty allowance which is payable to members of the Permanent Defence Force when engaged in specified security duties. This must be taken into account in assessing the issue of the Border allowance. I accept that the conditions that led to the introduction of the allowance in 1972 no longer exist. It was for this reason that a review of the continuation of the allowance was included in the Defence Forces modernisation agenda agreed in June 2007 with the representative associations under Towards 2016. The modernisation agenda encompasses a broad range of issues to improve further the overall effectiveness and efficiency of the Defence Forces.
The Border allowance issue relates to pay and conditions of service. Therefore, it must be addressed through the conciliation and arbitration scheme with the representative associations. That process is under way and I am hopeful that agreement can be reached within the next few months to have the allowance phased out.
Through the Defence Forces, Ireland continues to make a significant contribution to peace keeping. At the start of 2007 there were 826 Defence Forces personnel serving in 19 different overseas missions and postings throughout the world. The largest overseas deployment at that time was the contingent of 336 personnel with the UN mission in Liberia. Our participation in that mission ended in May 2007. At present there are about 745 Defence Forces personnel serving overseas. The main deployments are 409 personnel in EUFOR Chad/RCA, 234 personnel with the NATO-led international security presence in Kosovo and 44 personnel with the EU-led operations in Bosnia and Herzegovina.
Ensuring probity and effectiveness is a priority for the Department and the Defence Forces. This is reflected in the priority given to the internal audit function. The internal audit section is an independent unit which reports directly to me and which operates under a written charter setting out its role and function. The section has a staffing complement of 16 and works to an annual programme of audits approved by the audit committee and by me. These audits may cover any area of activity involving public funds within the remit of the Department, including any area of activity within the Permanent Defence Force or the reserve Defence Forces.
During 2007, the section carried out 131 audits — 109 audits of Defence Forces stores, 17 audits of the unit fund accounts of Reserve Defence Forces units, and five audits of claims from Permanent Defence Force units for the payment of security duty allowance. In 2006, it completed 128 audits — 121 audits of Defence Forces stores, four audits of claims from Permanent Defence Force units for the payment of security duty allowances, one audit of the unit fund account of a Reserve Defence Forces unit, a systems audit on Air Corps procurement and a systems audit on the Defence Forces dental service.
A written report is produced in respect of each audit undertaken and the section also produces, at the end of each year, an annual report which summarises its main activities and audit findings for that year. Following approval by the audit committee, the report is submitted to me. A copy is also forwarded to the Comptroller and Auditor General. The audit committee, which is chaired by a former chief executive of a commercial State body, reviews the work of the audit section on an ongoing basis. As recommended in the Mullarkey report, it meets with representatives of the Comptroller and Auditor General's office each year to discuss the audit issues of relevance to the Department.
Can we publish Mr. Howard's statement?
Mr. Michael Howard
Yes.
Mr. Howard refers to the internal audits. Regarding the internal audit of the Air Corps, did the Air Corps procure helicopters for the Chad mission? What procedures are in place at the moment? We read disturbing reports in the newspapers of grounded helicopters costing €2.5 million. How could this happen? Who authorised the procurement of those helicopters? What investigation is taking place into the grounding of these helicopters in Chad because of unsuitability? Will the report be finalised if that has not been done already? Will the committee and the Comptroller and Auditor General receive copies of the internal report?
Mr. Michael Howard
The helicopters were not procured within the Air Corps, this was handled at Defence Forces headquarters. I hope some of the points I make will reassure the committee.
This is a difficult and technical area. I will try to make it as simple as possible but I cannot make it any simpler than it is. The helicopters are not grounded. They are of Russian military specification and are in widespread use as military helicopters in the air forces of many former Soviet countries. The difficulty that arose with certification is solely in respect of the certification to carry passengers. The standard for civilian aviation is that the aircraft should be fitted out as an aircraft that any of us would travel in as fare-paying passengers. This requires a particular seating configuration and standard of amenity expected by fare-paying passengers. Military helicopters are normally constructed in a different way for a different facility. For example, in common with military helicopters, these helicopters have sidewards facing seating. The passengers are seated as we are at this meeting, with large clam shell doors to the rear. The idea is that when the helicopters land one can open the clam shell doors and people can get out of it quickly. This is perfectly acceptable as a military configuration but nobody would certify it for the carrying of fare-paying passengers. By analogy, in a difficult situation there is nowhere safer to be than in our Mowag armoured personnel carriers but there is no way it would be certified to carry bus passengers because it has side facing seats and large doors to the rear so that people can get out of it quickly.
This is the first time we have procured helicopters commercially for operational use. Sometimes, one learns by doing things. The major reason we procured helicopters was that, with the approach of the rainy season in Chad, there was a concern that our troops in Goz Beida might be isolated. We have no experience of operating in this difficult climate but had been informed that roads could become completely impassible. There were well-publicised difficulties in the force generation process in getting partner countries to provide helicopters for the mission. In Ireland we do not have an expeditionary air force, nor are we likely to in the foreseeable future. The security of our personnel being at a premium, we had to go to the market and procure helicopters.
People acted in good faith. I emphasise that the helicopters have an air operator certificate for the carriage of cargo, which was, in the first instance, the main reason we wanted to have helicopters. The helicopters, Mi-8Ts, are similar to other military helicopters we used in the past and there was no question over the mechanical condition of the helicopters. We used these helicopters extensively on other UN missions and they were supplied in support of our troops in Liberia, for example. I have travelled as a passenger in helicopters of this type on visits to troops overseas. I would be happy to do so again. However, through contacts with Dutch colleagues, we became aware that there was a legal issue about the air operator certificate. The air operator certificate for these aircraft covered the carriage of cargo and aerial work. There is a question of interpretation as to whether aerial work could include the carriage of passengers. Since we are the Government of Ireland, we adhere to the highest standard of compliance with aviation regulation. When there was a question mark over whether the air operator certificate covered some of the use to which the helicopter was put, we had to respond by restricting the use to the most rigorous interpretation of regulation. The helicopters are, at present, still flying, still transporting cargo and available for use for emergency evacuation and to extract personnel from a place of danger or for use in medevac. The helicopters are not grounded, simply restricted in use.
Having discovered that there was a problem, our approach is to learn the lessons of what has happened. I have asked the internal audit unit to undertake an audit of the process. The Minister has asked the chief of staff for a report of what has happened. Our intention is to get to the bottom of it, learn the lessons and make sure that, if we are in this situation again, we will be certain of the limits that may exist in using helicopters before we engage in the contract.
Even if we were aware of the restriction prior to procurement, we would still have had to acquire air support for troops in Goz Beida, simply on the precautionary principle that we could not allow them to become isolated logistically during the rainy season. At the time the procurement decision was made, it appeared that there was uncertainty about the degree of helicopter support that would be available from partner countries. The highest priority is the safety and sustainability of our troops. Having said that, there is a lesson to be learned. I have asked for an internal audit report on the process. The internal audit report will be given to the Comptroller and Auditor General upon completion. As this is a transaction that is arising and is not completed, it will be available to the committee. There will be an open book on this issue.
I will finish where I began and ask the committee to bear in mind that the helicopters are not grounded. A restriction has been placed on their use. The reason for this is regulatory and not because of any objective concern about the mechanical condition or the suitability of the operators.
They are grounded for the routine use of transporting troops to and from missions within Chad.
Mr. Michael Howard
That is correct.
In preparing the specifications for procurement, were all of the regulations required for the transportation of people assessed and taken into consideration?
Mr. Michael Howard
I cannot answer the question at present because I have not yet received the internal audit report. It is a reasonable question to ask. I wish to give a slight note of caution. Going back to the need to be mindful of the reputation of people who are not here, one of the issues I must manage in addressing the committee is that the company from which we leased the aircraft has expressed indignation that we have placed a restriction on it. Its interpretation of the paperwork it supplied is that it was compliant. It is not impossible — and I am not saying this is the case — that when we get to the bottom of this we may decide that it is possible to transport troops on these helicopters.
I want to remind the committee that the type of helicopter in question is used by other military organisations. I wish to dwell on this point but I do not want to bamboozle the committee with too much detail. There is a difference between the compliance requirements of aircraft on a military register and those on a civil register. The difficulty is that these are military helicopters but they are on a civil register and were built to meet a different template.
I will allow Deputy Fleming in shortly. I find this incomprehensible. Here we have the Department of Defence and the Army acquiring helicopters for the transportation of goods, equipment and troops and the fact that the aircraft did not comply with regulations for transporting troops was not spotted as part of the acquisition procedures. Were agents involved in conjunction with the Defence Forces in acquiring the helicopters? Were agents used to advise on the leasing or purchase of the aircraft?
Mr. Michael Howard
From my knowledge, I do not believe agents were used for advice. The aircraft were procured through a leasing company. A framework agreement is in place for leasing aircraft. The company with which we have a contractual arrangement made the contractual arrangement for the supply of these aircraft.
Surely a leasing company which carries out this type of leasing arrangement regularly should have been aware of the regulations involved and should have advised the Defence Forces that they were prevented from transporting troops to and from missions except in emergency situations. Surely it should have been equipped and qualified to advise accordingly.
Mr. Michael Howard
To go back to what I stated, to be fair to the company it is not here. If it were here it would have a different point of view.
Has Mr. Howard asked the question of the company?
Mr. Michael Howard
Yes, a dialogue is ongoing with the company. I repeat the point I made earlier. There is a degree of disagreement in the sense that the company might take a different point of view. I also want to emphasise that we are working on an internal audit report. When this is completed it will be given to the Comptroller and Auditor General and made available to the committee. Today, I do not have the report and so I do not have the answers to the reasonable questions being asked. The questions are being addressed in the course of completing the report. There is still a possibility that at the end of this we will take a decision that it is possible to transport troops using the helicopters. The issue is regulatory and it is a matter of how one interprets regulations. It is complicated.
As soon as we became aware that a difficulty existed, the actions we took were precautionary and we made a conservative interpretation of the air-worthiness certificate.
What was the role of the Dutch? Was this an industrial relations issue where one group of pilots noticed that another group of pilots——
I must tell Deputy Broughan that Deputy Fleming is next.
Mr. Michael Howard
It was not an industrial relations situation. There is no question of that.
How were the Dutch involved?
Mr. Michael Howard
There is a Dutch component in the multinational battalion of which we are a part in Goz Beida. The Dutch authorities informed the Irish authorities they believed there might have been a question about the air operator's certificate for this type of helicopter and this is how they were involved.
That sounds very strange. With regard to transporting equipment and troops to Chad we are part of the EU mission.
Mr. Michael Howard
Yes, it is EUFOR.
What was the cost of transportation of troops and equipment to Chad and who paid for it?
Mr. Michael Howard
The total cost of lifting everything out there was approximately €17 million. All of these costs were borne by Ireland. For the benefit of the committee, I will explain that this is a UN-mandated operation. The UN asked the EU to field the operation for it. The UN does not make any payment in such a case. It is in effect the European Union supporting the UN. In the European Union, the basic principle is that costs lie where they fall. Each country pays its own way. All of the costs were borne by Ireland.
We used the services of a charter company for the transport.
Mr. Michael Howard
Yes, a substantial air and sea charter was involved.
To Mr. Howard this may sound like a stupid question, and I hope it is not, but has the Department considered the acquisition of a transport plane to deal with these matters? If so, are the costs prohibitive because this will be ongoing?
Mr. Michael Howard
This question has been raised from time to time. The difficulty is that when one is deploying to a mission the demand is for a great big lift and then a small degree of sustainment. Sea and air capacity will always have to be chartered in for the one-off lift. We could never hope to have enough aircraft.
Regarding sustainment flights, it is possible to charter them commercially. The view we have taken is that there is a high capital cost in acquiring transport aircraft. Even having incurred this cost, we would still have to engage in substantial air charters. The viability would be very much open to question.
The way I should put it is that within the resource envelope we have we would not be able to get enough capacity to make a big dent in the charter requirement.
I thank Mr. Howard.
I wish to follow up on a couple of points made during the discussion. Whose decision was it not to allow these helicopters to be used to carry military personnel? Mr. Howard stated they were certified by the manufacturers, used by most eastern European countries, a doubt was raised by the Dutch and a precautionary view was taken. Who in Ireland took the precautionary view not to use them in the meantime?
Mr. Michael Howard
In the formal sense, the Chief of Staff.
Have the chiefs of staff in eastern European countries made the same decision or are the Dutch being ignored there? Is everybody paying the same heed to the Dutch or is it only us?
Mr. Michael Howard
If these aircraft were on a military register this problem would not arise.
What are they doing on a civil register if they are required for military purposes?
Mr. Michael Howard
Aircraft can only be chartered from a civilian company. Thousands of the aircraft type, the Mi8 and another version, the Mi17, were manufactured in eastern Europe. It has a very good reputation as a sturdy workhorse in rough conditions. The same type of aircraft has been used on UN missions and we are familiar with it. The Polish air force has deployed a number of them to Chad and they will fly their troops in them. However, if an aircraft is part of an air force — and this also applies in Ireland — it does not have to get an air operator's certificate. The template of seating which is laid out to acquire an air operator's certificate provides that the seats should either face fore or aft and if one flies in any civil aviation aircraft one will find the seats face either fore or aft.
Is that because we have leased them from another company rather than buying them ourselves?
Mr. Michael Howard
Let me put it another way ——
Is this a commercial problem or a safety problem? I am beginning to feel that this is merely a commercial issue.
Mr. Michael Howard
If the aircraft were operated by an air force, this would not be a problem. It is a certification issue.
Fine, so what happens to troops that might get trapped out there in the wet season? Can they be air lifted in one of these helicopters, piloted by Poland?
Mr. Michael Howard
They can be airlifted in the leased helicopters. If our troops are in difficulty and require evacuation in an emergency situation, we can lift them.
When we discovered this problem, we all had furrowed brows as we attempted to work out what had happened. The trouble is that there is nobody in the world who can give one an air operator's certificate for a military aircraft for use in a military operation. It is an unusual situation for us to have to lease civil aircraft for this context but the only aircraft one can lease commercially are on the civil register.
Had the Irish taxpayer purchased these helicopters for the Defence Forces, we would not have this problem. The problem arises only because we have entered into a lease agreement. Is that correct? If we had bought and paid for them, our Defence Forces could be happily flying in them today.
Mr. Michael Howard
Yes.
Am I right in saying that? That seems to be the essence of what I am hearing.
Mr. Michael Howard
Yes, but ——
Yes, so it is a commercial issue.
Mr. Michael Howard
No Deputy, it is a certification issue. If we were to procure them, we would have to go through an elaborate process to put them on the military register and then another elaborate process when we were finished with them to remove them from that register, which would not be commercially viable.
If these helicopters were being operated by the Ukrainian air force as distinct from a Ukrainian company, this problem would not arise.
How many other countries involved in the EUFOR Chad mission have the problem we have?
Mr. Michael Howard
To my knowledge, this problem is unique to Ireland.
How many countries are operating as part of the EUFOR force in Chad with these helicopters?
Mr. Michael Howard
The Poles are operating similar helicopters but they are Polish air force aircraft.
I understand that. The Polish military bought the helicopters which means they have no problem. The Department is now saying that because it had to do things quickly, it leased rather than purchased helicopters but one can only lease aircraft on the civil aircraft register and hence, our current problem.
I wish to know how many countries are part of the EUFOR force in Chad.
Mr. Michael Howard
It is of the order of 19 or 20 different countries.
Out of 19 countries, Ireland is the only one with this problem. Is that correct?
Mr. Michael Howard
Yes, but there was no question of us being able to purchase or operate these helicopters. It was a choice between leasing or nothing.
Could we not have entered into an arrangement with the defence forces of one of the other countries?
Mr. Michael Howard
That was our first option but I must go back to the point I was making, because it is important to understand the context. The force generation for the Chad operation turned out to be extremely difficult. There were five force generation conferences. We were hanging on and hanging on, based on the promise that various countries would supply helicopters but none of them did. I recall going to one meeting where one of the delegates remarked that altogether there were something like 1,270 helicopters represented at the table but nobody was willing to offer even one or two. Against that background, our foremost concern was that our troops would not become isolated during the rainy season. At a certain point, we had to make the decision to do the best that could be done in the very limited time available.
We now accept that, in the event, the result we got is far from satisfactory from our point of view. In that context, we are conducting an internal audit and will give that, in its entirety, to the Comptroller and Auditor General. We are very anxious that we learn the lessons that need to be learned from this. However, I must emphasise that, given the urgency of the requirement to ensure that our troops had logistical support, even if we had known at the time of leasing that the helicopters were only fit for cargo, it is very likely we would have had to lease them anyway.
I know that a report is imminent but I will finish with the following observation: Ireland is a small boy in the world of military activity and did not know how to go about this process properly, while the other 18 countries did not encounter this problem.
Mr. Michael Howard
I was asked how many countries are contributing to the EUFOR Chad mission but some of those contingents are quite small. There are three large battalions from France, Poland and Ireland. France and Poland both have expeditionary airforces and brought their own helicopters. The Polish had their own helicopters to bring but we did not. The question only relates to three countries.
Mr. Howard mentioned in passing that because the UN has designated the Chad mission as an EU activity, we will not be reimbursed by the UN. That is a very significant departure from tradition. In the past, with EU or UN missions, a degree of recoupment of costs was possible. Is this the US telling the UN that it will not pay for UN activities any more? This strikes me as significant. It has probably happened before but not on this scale. Ireland is participating in a UN-requested mission but is carrying the full cost. Why such a change?
Mr. Michael Howard
The answer rests with the way that peace keeping in the world has evolved. The UN, to a certain degree, is overwhelmed by the demand for peace keeping forces and its response has been to increasingly rely on other organisations, including NATO and the EU, to supply peace keeping missions under a UN mandate. When a third party supplies the mission, which has nothing to do with the national position of the United States of America, that party meets all of the expenses incurred. The argument that can be made in favour of this scenario is that it provides an opportunity for wealthier countries to subsidise the UN. In effect, wealthier nations are saying that if the UN does not have the necessary resources, they will step up to the plate and provide them. Indeed, it is legitimate to ask why wealthy western European countries should be subsidised when they participate in UN missions.
In view of the fact that our troops in Chad are now unable to reach the more remote parts of that country, especially during the rainy season, does Mr. Howard think that because of the errors made, our mission in Chad has been badly hampered? With regard to the aircraft leasing company that was named in a recently published newspaper article, has the Department considered the legal position vis-à-vis the advice it was given by that company regarding the suitability of the aircraft to transport troops?
Mr. Michael Howard
I do not consider that the mission has been seriously compromised. The rainy season is at an end so movement on the ground is now restored. The particular window of isolation that we were concerned about is coming to an end and there is a very active ——
During the rainy season our troops were unable to get to the more remote areas. While the rainy season may now be finishing, was the mission inhibited during that time?
Mr. Michael Howard
No, because entirely by coincidence, the rainy season was coming to an end in any case. At the time that the restriction on the use of helicopters was put in place, the rainy season was coming to an end. There is a very active programme of long-range patrolling from the base in Goz Beida by Irish and Dutch personnel, including going out on overnight patrols. The troops move around as best they can. The helicopters can still be used to sustain them when they are in the field and are also available for evacuation, if necessary. While there has been a restriction, I would not accept that it has been a serious one.
The Chairman's second point concerns the legal position in respect of the leasing company. This matter is currently under investigation by us. However, I must to be fair to the company as well. It has a good reputation and we have a long-standing business relationship with it. It would unfair of me to say anything that implied the company acted in bad faith.
No, I understand.
Mr. Michael Howard
I wanted to make that clear. We are taking a very conservative view of the matter because there is no way of dealing with aviation regulation other than through strict compliance. The company has made the point that we are operating helicopters in Africa and therefore we have to be realistic. We want to take a considered view of the matter. It is possible that at the end of the process we will decide that it is okay to use these helicopters for the transport of troops, in which case we could hardly take legal action against the company. Regardless of how embarrassing this may look for the organisation, there is nothing more important for us than complying with safety regulations. We adhere to only one standard, namely, best practice. As I have said, the company is entitled to its reputation.
Nobody implied that it acted improperly. The company was named in a recent press article and all I asked was whether the Department's legal position was considered in that regard.
I shall direct my comments to the Chair and members of the committee. What we are witnessing is typical of one of the biggest problems with which this committee must deal, namely, a lack of commercial negotiating ability among the Irish public service. Time after time we have seen public servants who are not familiar with commercial enterprises striking bad deals with private commercial operators. I acknowledge that the National Development Finance Agency is available to assist on financing aspects but we should return to this issue. People who have risen through the Civil Service cannot possibly contend with the current demands of commercial negotiations. I am not referring specifically to the Department of Defence. In the seven years I have been on this committee, this problem has arisen as a common thread across all Departments. The public service is not a commercial organisation, yet it is making commercial decisions in the absence of the proper training.
How many are in receipt of the Border duty allowance, when did the last person enter that scheme and when will it expire due to normal retirement? Are these allowances pensionable? Mr. Howard noted that those in receipt of the security duty allowance do not receive Border duty allowance. How many Defence Forces members receive the security duty allowance?
Mr. Michael Howard
I take the point that we need to learn from experience in procurement. However, I draw the committee's attention to the fact that the Defence Forces' extensive modernisation process has involved a number of major procurement projects for ships, aircraft and other defensive equipment. Almost without exception, these procurements have gone well and have passed examination. To be fair to the individuals who processed the contract under scrutiny, we have put our hands up and said that we want to investigate it from the point of view of learning lessons. I would not want them to be denigrated overly. We are audited annually and the Department's overall standard of procurement has been good. We are disappointed to be confronted with this issue as an exception. Our response is not to hush it up. We more or less blew the whistle ourselves, for which I hope we get credit.
The Border duty allowance is payable to every member of a designated Border unit. The last person to be put on that allowance is, therefore, the last person to be recruited into one of these units.
Are members who join these units in 2008 in receipt of the allowance?
Mr. Michael Howard
I cannot say whether anyone joined this year.
What about 2007?
Mr. Michael Howard
Yes.
That was not previously highlighted. I would have assumed that the allowance was paid for a particular purpose and would expire. In regard to the cost of phasing the allowance out, people are acquiring it as we speak and will possibly continue to do so next year if they are recruited into designated units. The first step should be to stop people from entering the scheme.
Mr. Michael Howard
The matter is under negotiation with the representative association. We entirely accept that the conditions for paying allowance no longer obtain. We accept the conclusion of the Comptroller and Auditor General's report. I would go further by saying that his report is of great assistance to management in dealing with the issue because it fortifies and vindicates a position we have held for a period of time. The representative association, with which we generally have a good relationship, has co-operated constructively if not always amicably. Extensive changes have taken place but we have enjoyed success in negotiating through the system of conciliation and arbitration. When management wishes to take back something that is of benefit to members, we have to negotiate with the association and this naturally takes more time than we might prefer. We have to be fair to the association and the system as a whole when we seek concessions. We do not deal with these matters in isolation.
Is it pensionable?
Mr. Michael Howard
No, it is not a pensionable allowance.
How many people are in receipt of the Border duty allowance or the security duty allowance?
Mr. Michael Howard
Approximately 1,060 members receive the Border duty allowance. The security duty allowance is potentially payable to any member of the Defence Forces who carries out the duties required. The Border duty allowance comprises a flat rate paid weekly irrespective of the number of duties carried out. The security duty allowance is paid per duty. Personnel are paid one allowance or the other. If the Border duty allowance is withdrawn, the member would then qualify for a duty allowance. Those who perform security duty, such as stand-by, will qualify for that allowance. Therefore, we would not save the entire amount of the Border duty allowance.
On a more general level, the conditions which led to the introduction of the Border duty allowance have obviously ceased and we can look back at a stable security situation which has existed for a long period of time. However, it is important that we avoid reading history backwards. We did not wish to dismantle the security arrangements on the Border until we were entirely certain that the security situation had stabilised and normalised. While we can now look at 2002 as the beginning of six years of peace, the situation at the time appeared much more uncertain. There was a never a definite time at which one could say, "It is over". Again, we took a cautious view in that regard.
We raised the issue with the representative association, which — I say this without criticism — took its own point of view. Naturally it was reluctant to engage in negotiations. With some effort, we eventually had the allowance included in the 2007 change process and our objective, which the association understands, is to phase it out.
We have to deal with the association on a range of issues and Deputies will be aware that we plan to close four Border barracks by January. The personnel currently based in these barracks are the same people who will be affected by the loss of this allowance. Given the sensitivity that exists, it would not be good practice on the part of management to act peremptorily. As we have asked the association to support the scheme of conciliation and arbitration, we have to follow that process.
I have no problem with the report. I was merely asking the specifics of when people entered the units and the numbers involved.
Last year's Estimate for the Reserve Defence Force was €12.5 million but actual expenditure was only €8.9 million. Why do so few people join the Reserve Defence Force? Do problems arise in terms of attendance or has there been a decrease in volunteerism?
Mr. Michael Howard
We have seen a decrease. The impact of the problem is wider than the Reserve Defence Force. There has been a decline in the amount of spare time that people are able to devote to voluntary activities. More people were offered the opportunity for training than were willing to take it up. It is voluntary on the part of those concerned. The Reserve Defence Force has experienced a decrease in membership for the same reasons.
We have a note on bonus payments to senior personnel saying, "During 2007 awards totalling €22,400 were made to two assistant secretaries and awards totalling €106,800 were made to ten officers of the Permanent Defence Force". The sentence before that says, "Details of the awards to individual officers are not disclosed on the basis that they are confidential to the officers concerned". Does that kind of confidentiality withstand an FOI request? There is no commercial sensitivity and the benefit to the Irish public of knowing who gets what and why is far greater than the marginal bit of discomfort a person might suffer through people knowing about it. By identifying that €22,400 was awarded to two assistant secretaries Mr. Howard has gone very close to naming them. It is unfair to the person who is the lower recipient because people will assume that person got at least half of it.
Mr. Michael Howard
We are following a public service-wide policy that individual awards are not published because there are situations where it could be invidious for the individuals. Situations are when there are only two assistant secretaries in the Department but I would rather not go into those.
Does the Information Commissioner accept that view or has it arisen? Has she ever been asked to obtain that information? Has there ever been such a FOI request?
Mr. Michael Howard
I am not aware that a request has ever gone to the Information Commissioner, but it is settled policy in the public service that we give the information only in an anonymous format.
We could raise that general policy that seems to cosily exist with the Information Commissioner some day.
Is the Department of Finance happy with the bonus system that operates across the services? For example, people in the HSE are getting bonuses while there are significant cutbacks and major errors. Is the Department convinced that the taxpayer is getting value for money?
Ms Mary Austin
As I am sure the committee members know, the bonus system was introduced on foot of recommendations of the Review Body on Higher Remuneration. The review body has consistently maintained that the bonus payment award scheme is a very integral part of the remuneration of higher officials across the public service. The Government has consistently agreed with that recommendation and has implemented it.
It is a matter for Secretaries General or CEOs to determine within the budget available for the scheme the awards, if any, that should be given to individuals. The Department of Finance or the committee of public awards has no input. It is a matter for the chairmen and CEOs of the bodies rather than for me as a Department of Finance official to comment on whether an individual award was warranted. We do not comment on individual awards across the service.
Is the Department happy that it is not all a great cosy arrangement within Departments and agencies, that people will reward each other?
Ms Mary Austin
Again, as the Department of Finance does not operate the schemes it is not for me to comment on that. The review body, in report No. 42 published last September, raised concerns about the bonus schemes. That referred to the non-commercial bodies and I cannot recall whether it included the wider bonus schemes. The review body expressed specific concerns about the trend to award maximum or near maximum awards. It took the view that this was unsustainable. In that report it stated that if the situation had not changed between now and the next general report, the review body would examine recommending to Government that the awards would no longer rest with the boards of State companies.
At a time when foot soldiers delivering services are being cut back and jobs are being lost we should consider this. Perhaps we are going into policy areas.
Did I see somewhere that the Department of Defence is talking about closing St. Bricin's Hospital? How many beds are in it and what was the occupancy rate for last year? Has the Department offered it to the HSE? I am sure such a facility could be of value in Dublin city even if it had no acute beds. Has anything being done on that? I hate to see a medical facility being closed at this time no matter what purpose it has been used for, without exploring all other avenues on alternative uses for the benefit of the Irish taxpayer.
There is a note in the accounts on page 316 about maintenance of the Garda helicopter which states: "The account includes the full operating cost of Garda fixed wing aircraft and Garda helicopter and the pilot costs only for a second Garda helicopter". Can the Department outline the details of the costings of that agreement with the Garda Síochána regarding covering the full operating costs of the Garda helicopter and fixed-wing aeroplane? The pilot costs are just the pilot costs. Is that being reviewed by the Garda Síochána or the Department of Justice, Equality and Law Reform?
I saw somewhere that the Department of Justice, Equality and Law Reform or the Garda was considering getting commercial quotes for the maintenance of the Garda helicopter for which the Department of Defence meets the full operating costs. How much does the Garda Síochána pay the Department of Defence each year on the basis of that fee? It is included in the miscellaneous receipts with no breakdown of that figure. If the full details are not available I am happy for them to be sent to the committee because that is quite a detailed question.
Mr. Michael Howard
I do not have a bed number for St. Bricin's but I can get it for the Deputy. The capacity of the hospital is very low and the use of the hospital is also low.
Is it fewer than 100 beds?
Mr. Michael Howard
It is comfortably fewer than 100 beds and the occupancy would be in single figures.
How many staff are attached to it?
Mr. Michael Howard
Approximately 40 staff members are attached to it.
There are more staff than patients?
Mr. Michael Howard
The staff also deal with outpatients. While it is called a hospital, it is more of a health centre where people go for routine medical examinations. There are many routine medical examinations in the Defence Forces, for example, for recruits and everybody going overseas. Vaccinations are another important part of the work.
Where will that work be carried out?
Mr. Michael Howard
The intention is that we will have to invest in providing some facility in McKee Barracks to take care of personnel in Dublin and also some enhancement in the Curragh, where services will be centralised. St. Bricin's does not function as a hospital in the sense of accepting inpatients for surgical procedures. It is far more in the nature of a health centre. While it has the capacity to hold a certain number of patients overnight, it is a long time since any advanced surgical procedures were undertaken there. They do work such as diagnostics and vaccinations.
The HSE has examined the issue a couple of times. The hospital was constructed around the beginning of the 20th century and while the building has been maintained from a health and safety point of view, inpatient facilities have not been invested in. The HSE has found it to be unsuitable without very substantial investment. When evacuated it will be offered for disposal. I do not know whether the HSE will express an interest but our experience is that it has not been considered suitable because it falls far short of what would normally be expected in a modern hospital.
Where is it?
Mr. Michael Howard
It is off Infirmary Road, which goes between Parkgate Street and the North Circular Road.
Does the Department intend to sell that property?
Mr. Michael Howard
The property will be offered for disposal. As some work will be needed to prepare the other facilities first, it will be slightly later than the other barrack closures.
The Department is transferring facilities so it can sell this valuable site.
Mr. Michael Howard
Yes. That is the intention.
While we are on the issue of health, I have another question. The White Paper on Defence, which was published in 2000, recommended that there be 47 doctors within the Defence Forces. There are only 23 at present.
Mr. Michael Howard
Yes, 22 or 23.
Perhaps I missed it, but I do not see anywhere in the accounts the cost of outsourcing health services to external agencies or hospitals outside the defence system. What is the cost of outsourcing medical services? Would it not be far more cost effective to have fulfilled the obligations under the White Paper?
Mr. Michael Howard
Off the top of my head, the cost is of the order of €2.4 million or €2.5 million. There is no question but that if it were possible for us to employ our own medical officers it would be more cost effective. The difficulty has been recruiting doctors for service in the Defence Forces. We obtained the permission of the Department of Finance some years ago to give a substantial pay increase and that still did not succeed in attracting large numbers of medical officers, although we have succeeded in getting a number of doctors overseas. It has been enormously difficult.
I am informed that part of the difficulty of being a medical officer in the Defence Forces is that one's entire practice consists of physically fit and healthy young people and one does not get the breadth of professional experience needed to keep one's skills sharp, as would a general practitioner with a normal family practice. An ordinary GP would be dealing with children and older people and a whole range of conditions not seen in the Defence Forces because sufferers would be screened out. Thus, there are difficulties from the viewpoint of professional experience. We have sufficient cover to provide doctors for overseas service. At present, for example, we have a good medical facility in Goz Beida, but for service at home we are often required to hire doctors and we have to pay them special rates. I will confirm the figure of around €2.5 million, but it is substantial. It is not a situation with which we are particularly happy. If we cannot fill medical officer appointments in one way we do have to provide cover in whatever way we can.
The position with the Garda aircraft is that we operate both of them in terms of crew, but the maintenance arrangements are substantially outsourced. We do not receive any payments, as far as I am aware, from the defence Vote. In other words, we simply operate them and we bear the cost on the defence Vote. The note is shown simply for transparency, to show the expenses we bear which are for the benefit of another Vote. It is in the interest of transparency, there is no transfer of money.
What about the servicing?
Mr. Michael Howard
There is what is called a "power by the hour" contract with a private company which charges a rate per flying hour and then supplies the servicing. The Department of Justice, Equality and Law Reform has made that arrangement directly in respect of the second helicopter; therefore, it is not borne as an expense on our Vote.
I am specifically asking about the service provided by the Department of Defence. The accounting mentions the full operating cost of one Garda helicopter. Mr. Howard has explained the other one which is dealt with by the Department of Justice, Equality and Law Reform directly, using its own supplier for the provision of maintenance services. I am asking about the aircraft with which the Department of Defence is involved. Does the Department have a pay-per-hour arrangement?
Mr. Michael Howard
Yes. I do not think we have a breakdown of the figure here so I will have to get it for the Deputy.
Is that one Garda helicopter maintained by the Department's technicians and engineers?
Mr. Michael Howard
The arrangements are different for the two aircraft.
Yes. I am only asking about the one mentioned in the note. We know about the pilot. I am asking only about the one for which the Department provides the full cost. I am not asking about the one operated by the Garda.
Mr. Michael Howard
The short answer is that I do not have a breakdown of the figure now. We can obtain a figure for the Deputy. For one of the helicopters the arrangements are made by us; the other helicopter——
I am only interested in that one. We can ask the Garda Síochána directly about its arrangement for the other helicopter.
Mr. Michael Howard
I will have to obtain the figure for the Deputy.
Could Mr. Howard give us some information on how it is billed and the amount involved? Is it the newer helicopter that the Garda deals with itself? The Garda has a newer helicopter and has decided not to ask the Department of Defence to provide the full operating costs of service and maintenance. It has gone independently to the manufacturer or some other company that can provide the maintenance contract and has moved away from the Department. I want to know the contractual arrangements.
Mr. Michael Howard
The position, as we speak, is that the servicing of both Garda helicopters is outsourced to the commercial company.
So the situation has moved on from——
Mr. Michael Howard
Yes. The helicopter was changed. In 2007 the Garda was still operating the old Squirrel helicopter.
The Garda must have considered the fee being charged was large if it has stopped dealing with the Department.
The Garda will be here on 30 November so we can ask its representatives then.
Mr. Michael Howard
The Garda was not paying us anything.
Then I ask Mr. Howard to answer the question in a note, because I am at something of a loss. I do not have any of the information.
The Garda will be here on 30 November, but it would be useful to have the information before then.
We should have the information from both sources.
A sum of €6.4 million was paid by the banks for escort services. Is the Department charging a commercial rate?
Mr. Michael Howard
Yes. It is the full cost. At the end of the year we carry out a full cost accounting process with the banks. They pay the full cost of the escort supply to the banks.
Does that compare with commercial security? Is that an area in which the Department could secure additional revenue, along with some of the other support work the Army does?
Mr. Michael Howard
The policy is that the banks should pay the full cost we incur and they do so. The particular service provided by the Defence Forces, which is an armed escort party in support of the Garda, could not be provided in the commercial sector, so there is probably not a benchmark cost that could be obtained. The situation has changed. For a number of years the banks were making a much reduced payment, but this was reviewed by the Minister for Defence, Deputy O'Dea, with the conclusion that the banks should pay the full cost and all the expenses we bear, and they have been doing that.
To clarify, the banks pay €6.4 million, but the Department of Justice, Equality and Law Reform also gets €5 million.
Mr. Michael Howard
I presume the Department of Justice, Equality and Law Reform is paid in respect of the time of the Garda Síochána.
Item Y in Vote 36, Coiste an Asgard, is of local interest. What is the position with regard to the training vessel? Was the vessel insured when it sank? Based on the reports we had, most of us were impressed with the skipper and the crew given the over-riding need for the safety of the young trainees. Are we planning to raise it to find out exactly what happened? It seemed to sink in a mysterious way. Are we going to replace it?
Mr. Michael Howard
I join with the Deputy in saying the actions of Captain Newport and the crew were extraordinary. Given that the emergency arose without warning they responded very quickly and effectively, and we were enormously relieved there was no loss of life or injury. I give full credit to the captain and crew for that.
At present the ship is insured with Allianz at a value of €3.8 million. The vessel has been located and a preliminary survey has been undertaken. It is in 80 m of water. The vessel is upright and looks largely intact. The insurers are conducting a tender competition, with the tenders due back by tomorrow, to raise the vessel. Subject to the outcome of the competition the intention is to raise the vessel. Beyond that, at present, we do not know. There is a process that must be carried out.
There will be a question over the most appropriate time to raise the vessel and there may be issues with regard to weather and so on. Until that happens we are not in a position to say what our next action might be. If the vessel is successfully brought to the surface we will be in a much better position to assess the next steps.
I have one caution, however. While we are heartened by the results of our preliminary survey, we must remember it was conducted by a remotely operated vehicle with a television camera going around the vessel under water. One is never sure what one is facing until the vessel reaches the surface.
Would the insurance cover the replacement cost? Most people recognise the importance of the vessel and its predecessor in providing sail training for decades.
Mr. Michael Howard
We do not know at this stage. There is an issue with the amount of insurance. It was a 27 year old vessel and could only be insured as such. The financial implications and the options which lie before us are uncertain at this stage.
I thank the Secretary General.
I refer to section T dealing with compensation and personal injuries. What is the up-to-date position on the famous loss of hearing claims? I believe one of the notes to the accounts outlines that some 879 cases were on hand at the end of this Vote of 2007. Has this number risen and are there more people coming forward? What is the general position of the hearing claims now? What is the average award at this stage? I realise the State Claims Agency handles this on behalf of the State but the Department of Defence is the first point of reference.
Mr. Michael Howard
As of 30 September 2008 we received 16,798 cases, of which 15,949 have been finalised. The total amount expended was €287 million, which included plaintive legal costs of just under €100 million. We generally contest any cases which present after July 2002 on the basis of the Statute of Limitations. If I were to put a value on what is outstanding at present, it could be of the order of €8 million. To put this in context, there is almost €300 million behind us and €8 million ahead of us and, therefore, we regard this as an issue largely resolved.
In recent years only a small number of cases have been received, and when they arrive our disposition is to contest them on the basis of the Statute of Limitations and on the basis that anyone who knew they had a claim should have been aware of their position a long time ago. That said, in the negotiation process one often ends up having to be pragmatic in how one handles cases. There are fewer than 900 cases outstanding at present and they are being ground down slowly. Typically, a case would be settled for between €5,000 and €6,000. Our assessment is that the matter is largely behind us now and we are only cleaning up the last few outstanding cases.
We changed the conditions under which our troops operated guns and so on. My question relates to the first questions that the Chairman and my colleague asked concerning the helicopters in Chad. Is the Department conscious that the operational and training conditions which soldiers undergo must reach a certain safety and protection level to ensure this type of situation could not arise in the future?
Mr. Michael Howard
There are two important distinctions to be made, namely, the regime of safety in place and the record-keeping of the regime. I believe there has always been a strong culture of concern for the safety and welfare of personnel in the Defences Forces. However, because of a less litigious environment, the record-keeping associated with health and safety was often insufficient when we were obliged to defend a personal injury claim some 20 years later. In the late 1980s there were changes made to the procedures for hearing conservation in the Defence Forces to ensure that there was a record of personnel being ordered to wear hearing protection before firing arms. When ammunition is expended it is recorded that the order was given. Hearing conservation was better than was often alleged, but I would have to say that to defend the reputation of the Defence Forces.
There is a very strong health and safety culture in the Defence Forces and a very good and constructive working relationship with the Health and Safety Authority. Having said that, people should remember the purpose of the Army. In an operational situation there is a balance to be struck between the Army doing its job and health and safety matters. The issue with hearing conservation concerned training. The standards which obtain during training may be impossible to replicate in an operational theatre, where there may be very severe dangers arising from the actions of armed elements. There is no way one can manage risk, one can only mitigate it. There is no way one can control the actions of third parties.
Our colleagues, the Committee of Public Accounts in Westminster in the UK, have discussed the equipment and support that troops have received in war zones. Were General Dermot Earley and other senior officers consulted about the use of Mi8T helicopters? The Vote indicates we are coming to the end of a phase of operations where six new helicopters were purchased and the final purchase from that tranche was in this Vote. Why did we not simply bring our own helicopter to Chad to ensure, given the rainy season and so on, our 400 soldiers receive the best possible protection?
Mr. Michael Howard
I will take the questions in no particular order. The procurement of the helicopters falls under a delegated subhead and so the administration of the contract was entirely in the hands of military personnel and, therefore, military authorities would have been consulted. Generally speaking in the procurement function we have delegated large amounts of routine procurement to the Defence Forces and it is administered by military personnel. It is subject to audit which is why we have a very highly developed internal audit process.
Broadly speaking the system has worked very well. That is the context in which the procurement took place. There is a reason we cannot bring our own helicopters. I mentioned earlier we do not have an expeditionary airforce. The Mi8T helicopters are capable of carrying 22 passengers or three or four tonnes of cargo. They are substantial cargo-carrying helicopters. The helicopters we bought are much smaller and lighter, capable of carrying approximately eight passengers. They have neither the range nor the capability of the Mi8T helicopters.
Supporting a helicopter at this long range requires a huge logistic capability and a large investment. It is not within our means at present. It has always been the case that when we go on overseas missions that we punch well up to our weight by fielding an armoured personnel carrier mounted infantry battalion. This is a very good contribution for a small country such as Ireland. However, we must rely on larger countries to supply items such as the expeditionary air components. As I stated, and to be brutal about it, the difficulty in Chad was the large countries were slow to step up to the plate and we found ourselves in the situation we were in.
Regarding the standards of equipment and safety, the standard of equipment available to Irish personnel overseas meets the best standard in the world for what we do. A major part of the re-equipment and modernisation of the Defence Forces entailed deciding what we would do and what we would not do and ensuring that what we decide to do is done to the best standard in the world. All of the equipment provided to Irish troops serving overseas meets the best standards for personal protection and equipment and, in so far as it is possible to do so in these difficult environmental situations, the best possible living accommodation.
It is unfortunate that Goz Beida is such a remote and inaccessible place. To travel there and see how far away from home we are and what a fantastic facility has been constructed at the end of a long supply chain would make anybody feel enormously proud of being Irish and of the Defence Forces.
We only received this report from the media yesterday. What is the net effect of not being able to carry personnel in the Mi8T? Are we encumbered? Does it make things more difficult for our personnel? We are fascinated by the fact that the Dutch seem to have had a role in this. Can we carry out the operation that our personnel were sent to do with EUFOR?
Mr. Michael Howard
The short answer to that question is emphatically "Yes". Our contribution to the force is an armoured personnel carrier mounted infantry battalion. Helicopters would only be used to a limited extent because any time one travels by helicopter all one has is the personnel, one does not have armoured vehicles while on patrol. The most important element in having helicopters available to us is resupply and, as a subsidiary function, medical evacuation, although there are other helicopters available for that purpose and they are unaffected. In so far as these helicopters have a contribution to make to the sustainability of the mission or the safety and security of personnel, their use is unimpeded.
Let me return to the comments of the Comptroller and Auditor General about Border duty. Obviously, Deputies who represent the areas where barracks are being closed, for example, Connolly Barracks in Longford would feel the loss of the military installation in question, as it represents a very good business through the creation of ancillary jobs. Given that the barracks are being closed at a time when property prices have gone through the floor and we are heading into a fire sale in Longford, Monaghan and so on, how does this square with the decentralisation programme? Surely one of the merits of the military force is that it is decentralised. I know we had this argument before about the centre in Fermoy and others but it seems incongruous that we are closing these barracks at this time. I noted in a briefing by the Comptroller and Auditor General that almost 700 personnel in the barracks in question were recipients of Border duty allowances. Is this simply a device to close off Border duties and in the process remove vital economic drivers from places such as Longford that badly need them? Deputies Bannon, Penrose, Kelly and others will make the point strongly that it is a hammer blow to small communities which depend——
The Deputy is straying into policy issues which——
It seems strange that we have a huge number of personnel engaged in Border duties based at these barracks.
Mr. Michael Howard
I thank the Chairman because I am constrained as this was a Government decision which formed part of the budget. It would not be appropriate, therefore, for me to comment on the merits of that decision, one way or the other. I am aware that it is a very sensitive issue, one that we will deal with in the organisation. I do not want to say anything that would make the issue more sensitive.
The Minister explained the position very well in response to parliamentary questions on the contribution consolidating the Defence Forces will make to their operational effectiveness. There is no question of us trying to approach the Border duty allowance question by this means. We simply would not do that. We have concluded the matter as part of the change process under Towards 2016. Independent of whether the barracks remain open or are closed, the conditions which gave rise to the payment of the allowance no longer obtain. The question of phasing it out is on the table one way or the other. The position of management will not be altered, regardless of whether barracks remain open or are closed.
I notice that about 200 personnel receive Border duty allowances — 49 at Athlone barracks, 49 at Cathal Brugha Barracks, 46 at Gormanston, 17 at Galway and so on. Clearly, a very large number of personnel, well away from the Border zone, benefit from the allowance. When is this expected to change, given the criticisms made by the Comptroller and Auditor General?
Mr. Michael Howard
This has become part of the industrial relations process, of which we are big supporters. On occasion we have had to point out to the association that it should not engage in megaphone diplomacy. I do not want to engage in it either, other than to say we accept entirely the view of the Comptroller and Auditor General and the committee that this is an allowance which should be phased out. What we have to say about this to the association we should save for the negotiating table.
While I am conscious of the need not to stray into policy matters, this is a committee of public accounts. What is the projected saving in selling the four barracks? What is the estimated cost of relocating equipment and other ancillary services? What are the projected costs of maintenance, security and heating at the vacated premises, given that the Department will have unused premises at a time when property prices have plummeted? Has Mr. Howard made the projections? If so, would he outline the figures I have requested?
Mr. Michael Howard
I am not in a position today to give the Chairman all the figures sought. I understand we are at the edge of the question of public policy. The single biggest benefit from the point of view of the defence organisation — if I can describe policy rather than comment on it — is that by concentrating personnel in a smaller number of larger units, they are available for collective training. The biggest criticisms made of the Defence Forces when the organisation was comprehensively reviewed by PricewaterhouseCoopers in the mid-1990s centred on the failure to ensure collective training standards because military personnel were dispersed over too many locations. At the time there were 34 barracks and the consultants suggested the number should be halved; in other words, that 17 should be closed. That was an objective assessment in an external review.
Leaving everything else aside, the benefit from our point of view in bringing personnel together is that we will improve training standards and the deployability of the Defence Forces. Previously deployment was made to meet operational requirements along the Border. There is no longer that requirement. The current requirement is to have expeditionary units of the Defence Forces that can be deployed to places such as Kosovo and Chad. In order to do this, we must have very high standards of collective training and personnel who can be deployed. The numbers required to secure a barracks are significant. The big benefit for the Defence Forces may not necessarily be a cash saving, but a great enhancement of operational capacity. We will get more from the same number of personnel — our single biggest expense accounting for 60% to 70% of expenditure. The number of personnel needed to have an armoury of 200 rifles is the same as that for an amoury of 500 rifles. If one combines two armouries, one relieves oneself of some of the burden and personnel are then free for other duties.
Regarding the disposal, it has been made clear that we understand the current state of the property market. That is a decision that will have to be taken when perhaps the situation in the market has stabilised. The benefit I have described in terms of the big gain in efficiency and training for the Defence Forces will be derived immediately when one consolidates at a single location.
When will the closures actually happen?
Mr. Michael Howard
The target date is 31 January.
My final point concerns the appropriations.
No costings have been made. Mr. Howard is unable to supply the figures I asked for.
Mr. Michael Howard
I would not say no costings have been made. I do not have the figures with me.
Surely, on a major issue such as the closing of barracks, relocating equipment, the cost of maintenance, security and heating at the vacated premises, the figures should be at the tip of Mr. Howard's fingers.
Mr. Michael Howard
I am sorry, Chairman, I do not have them with me but we have some work done on the issue.
Perhaps Mr. Howard might forward them to us.
Mr. Michael Howard
Okay.
I wish to ask a brief question on miscellaneous items in Vote 36. In regard to the funding we receive back from international bodies, I notice that in the 2007 accounts the United Nations is listed with a figure of €48.5 million, virtually none of which it seems will come back to us. What about the military staffs and the OSCE? For example, the provision for the Nordic battle group is down by €0.5 million. In other words, do the State and the Department's Vote have to provide most of that funding?
Mr. Michael Howard
The short answer to that question is "Yes". The only circumstances in which we get reimbursement is if there is what is called a traditional blue hat United Nations mission, that is, the United Nations fields and organises the mission itself. In all other situations, if the United Nations mandates a third party organisation such as the European Union — sometimes it is a NATO led mission — to provide the mission, each country pays its own cost and nothing comes to us from the United Nations.
To be honest with the Deputy, in the modern world there is such demand for the UN and for peacekeeping and peace support operations the UN does not have the financial capacity, or sometimes even the organisational capacity, to field peacekeeping forces. It must look therefore to regional organisations such as NATO and the EU to field those organisations and pay for them. The expectation must be that wealthier countries like Ireland will very often be asked to pay their own way.
One of the reasons we have to equip the Defence Forces to the highest standard is that the equipment they use is the equipment we bring with us whereas on previous missions the UN would often provide equipment directly. That is now a thing of the past.
In a previous question on the cost of transporting equipment and troops to Chad, Mr. Howard said it would cost approximately €17 million or €18 million to transport alone. In addition to that is the cost of acquiring the helicopters, which we spoke about at length. Will it cost the same amount to bring the equipment and the troops back? Will the costs run to approximately €50 million for the Chad mission alone? Does Mr. Howard have any projections on it?
Mr. Michael Howard
The intention is that the United Nations will take over the EUFOR mission in Chad. If it is blue hatted, to use the colloquial term, in other words, if the European Union mission is folded into a United Nations mission — and that matter will be subject to triple lock approval if Ireland decides to join this new mission with our existing troops — the costing regime of a blue hat mission will then obtain. It is possible, therefore, that the costs of repatriation in that situation would be the subject at least of a UN contribution. In other words, one of the costs the UN meets in a blue hat mission is the cost of deploying to and from the theatre.
On whether it would cost quite as much, one of the issues that added to cost when we were going out to Chad was the fact that we had to use a great deal of air freight to get there quickly. It might be possible to bring back some of the equipment air freighted out there by sea but not necessarily. For example, we had to lease Antonov transport aircraft, which are the largest transport aircraft in the world — they are leased from Ukraine and are another legacy from the former Soviet Union — to fly our armoured personnel carriers out there because there is no road or rail links. This part of Africa is entirely devoid of infrastructure and therefore the equipment had to be flown out. That contributed enormously to the cost. I do not know whether it is possible to get our equipment back by some other means but there is the potential for that cost to be met.
On a different area and for my own information I want to ask about the Naval Service. In his opening statement Mr. Howard referred to the procurement process that is in place to replace Naval Service vehicles. In July 2007 the Government agreed to move forward on the procurement process in terms of two offshore patrol vessels — they are replacement vehicles — and the extended patrol vessel with options for an additional vessel in each case. Mr. Howard concluded by saying whether the contract would be awarded in early 2009 would be subject to Government approval. I understood a commitment was given and that those vehicles would be replaced. Can Mr. Howard elaborate on that?
Mr. Michael Howard
Again, I can only describe the Government decision to the Deputy because we are subject to it. To give the background to this, in 2000 the White Paper settled the size of the Naval Service fleet at eight years. The normal life expectancy of a naval vessel in service is approximately 30 years and over the coming years, therefore, three vessels, LE Emer, LE Aoife and LE Aisling, will reach or exceed the 30 years. Regarding any estimate of that time, they do not become unusable after 30 years and one day but as ships get older they become subject to a much tighter regime of maritime survey and more expense in terms of maintenance.
When we sought approval for the ship replacement programme, we obtained from Government approval to go to tender and then to come back to Government with the costs. It is some years since we have procured naval vessels. The last naval vessel to be commissioned was 2001 so there is a degree of uncertainty as to how much it would cost, and Government took the view that it wished to see how much it would cost before making a decision. We are proceeding in accordance with that, with the intention of going back to Government in the near future when we have finished the second stage competition.
Will the Department look for prices for three vessels?
Mr. Michael Howard
The decision that was taken was for two offshore patrol vessels and an extended patrol vessel, which would be a larger vessel than we have ever procured in the past, and perhaps an option for extra vessels. That would have been bearing in mind that after LE Emer, LE Aoife and LE Aisling, LE Eithne, LE Orla and LE Ciara, which were constructed around 1984 or 1985, will be approaching the end of their life. We were trying to think far ahead. Currently, we are in the process of implementing the last Government decision we got and before we take any definitive action we must go back to Government for approval again.
I am aware of much of the work the vessels do because Haulbowline is based in Cork and I have visited that facility. Much of the work involves fisheries protection and drug smuggling detection. Ireland is a small nation on the edge of Europe with a long, indented coastline. Is a contribution towards the cost of operating those vessels available from the EU or any other agencies, given that the cost involved is a heavy burden?
Mr. Michael Howard
No. We received considerable support from the European Union when we joined towards the construction of naval vessels but it does not contribute anything towards operational cost and there is no programme under which we could seek recoupment of expenditure for new naval vessels. It is a cost that must be borne in full by the State.
The closure of four Army barracks was mentioned. Consideration was to be given in the White Paper to properties throughout the State, although not necessarily barracks that are operational. Mr. Howard has been in correspondence with me and other Deputies and has indicated that it is intended to sell the property in Templebreedy, near Crosshaven in Cork. Are there many other such properties throughout the State that are not in use but would be of value in terms of recouping the proceeds of their sale and investing it in the Defence Forces?
Mr. Michael Howard
We have approximately 20 small properties, often unoccupied, which we have earmarked for possible disposal. The caveat is that we are mindful of the condition of the current property market. In the past it has proved a significant source of assistance in providing us with funds for investment in the Defence Forces. Previous disposals made a major contribution towards the Defence Forces. We are alert to that as a possible benefit but the only caveat I would put against that is that we are also aware of the current state of the property market and therefore a balanced approach is required.
The property market was lucrative and offered value during the past ten years. Did the Department avail of that opportunity?
Mr. Michael Howard
We did, but we are aware that the position changed quickly and substantially. I hope the position will stabilise but we would take a cautious view about marketing property at present.
In regard to departmental properties, the Department has disposed of several of them. I am aware of one of them and if I may be somewhat parochial, it is disposing of a tract of land at Collins Barracks in Cork and has been negotiating on that with Cork City Council for almost two years. Prior to coming here I checked if the disposal of that property has gone ahead and I was told that there are problems regarding mapping, registration, deeds and such matters. Many of the problems arise in the Chief State Solicitor's office.
Are there problems in the Chief State Solicitor's office, to Mr. Howard's knowledge, in dealing with the disposal of properties and is the system cumbersome because the land was supposed to be for affordable housing but is no nearer a solution two years down the line? Why is the system so cumbersome in transferring a parcel of property from the Department to a local authority through the Department of the Environment, Heritage and Local Government?
Mr. Michael Howard
To be fair to the Chief State Solicitor's office, it would be important to understand that there is a particular complication in the disposal about which the Chairman spoke in that it has been the subject of legal proceedings. I am constrained in what I can say, obviously, but there is a person who is in occupation of the land and there is some litigation involved. We may be injuncted. To be fair to the Chief State Solicitor's office, it is not the author of that particular aspect of the issue. That is our understanding of certainly a very large measure of the problem here.
Perhaps Mr. Howard would give members a report on it.
Mr. Michael Howard
I will.
One of the key goals of the White Paper on defence of February 2000 was to provide a light infantry based force with an appropriate level of all arms capability and to provide sufficient force and capabilities. What progress has been made on that key proposal in the White Paper?
On the need to rebalance defence spending, the PricewaterhouseCoopers review of the Defence Forces highlighted a serious imbalance in the non-pay and pay ratio. Some 80% of military expenditure was for pay and 20% was non-pay. What progress has been made since the PricewaterhouseCoopers report of 2000?
The other proposal regarding the priorities for departmental management relates to civilianisation of some aspects of the military to free up personnel. The report stated that the priorities for departmental management included freeing up personnel resources to concentrate on policy and evaluation work, eliminating unnecessary procedures, reducing regulations and making maximum use of information technology, freeing up military personnel from tasks which would be more appropriate to civilian personnel, giving a greater focus to personal development and performance management and developing further joint civil-military structures to improve inter-reaction. Could Mr. Howard set out what progress has been made on all of these key proposals of the White Paper?
Mr. Michael Howard
I am pleased to say there has been substantial progress in implementing the White Paper which, as the Chairman will be aware, is a ten-year development framework for the defence organisation as a whole. There was a comprehensive review conducted in 2007 which reported very significant progress across a broad range of fronts.
I will touch on a couple of the issues where we have an especially good story to tell. In answer to the query on the light infantry based force, one should look at the missions mounted, first in Liberia and then in Goz Beida in Chad. The Defence Forces could not have mounted those missions prior to the programme of reform involving the substantial programme of re-equipment, the provision of modern armoured personnel carriers and the provision of modern communications equipment, and prior to the deployability issue.
When previously we went on overseas missions, the UN provided the living accommodation, the camp and the engineering facilities. The Defence Forces, when they went to Liberia, were able to go into a greenfield situation and build a good field camp to a very high standard. They were able to repeat this in Chad which was an even more difficult and challenging environment even further away from home. The acquisition of that capacity is entirely due to the programme of reform under the White Paper.
A very big part of this was the downsizing of the Defence Forces. We are very proud of the fact that we are the only sector of the public service where we have reduced the numbers of personnel employed, both in the civil and military staff, yet we are providing a more effective and focused service to the public. A big part of this was reducing the number of personnel — cutting the payroll — and using that money to increase the equipment, facilities and all the rest of it. That programme has been ongoing for a number of years and I referred to some of the highlights of that in my opening statement.
The pay to non-pay ratio had been allowed to drift to a point where, although we were meeting the basic overheads and the pay of the Defence Forces, there was no money available for equipment. We have had a very substantial sum of money available for equipment in recent years since the White Paper.
What is the ratio now? It was 4:1 in 2000.
Mr. Michael Howard
It is roughly 70:30. It varies slightly from year to year depending on the timing of procurements and so on. That shift has given us what I would call discretionary expenditure. Every year we have some money available whereby we can decide what aspect of the Defence Forces we can redevelop and enhance. It has been a very successful experience from the point of view of the defence organisation.
What is the Department's final target? Mr. Howard stated it has gone from 80:20 to 70:30.
Mr. Michael Howard
At 70:30 there is long-term sustainability.
Would that be the international benchmark? What is the corresponding ratio in the Swedish army, for example?
Mr. Michael Howard
To be quite honest, it is very difficult to use international benchmarks. If I can go back to something I said earlier, part of this process we decided on was that what we were going to do we would do extremely well, that is, the light infantry based organisation which we have described. There are other countries where they have decided to have large ocean-going navies, expeditionary air forces and so forth which involve huge equipment procurements, so their balance could be quite different. I do not know off the top of my head what is this year's balance in Britain, but it could be 50:50. In that 50%, however, they are bearing the cost of nuclear submarines, supersonic jet fighters and all kinds of things we do not procure. Our procurement is very focused on the things we need to fulfil the missions we have from Government and that brings us the light infantry. The 70:30 ratio is the balance for us.
The Chairman mentioned the administrative arrangements in the organisation. I have worked in the Department of Defence for 22 years. There has never been a time in my working life when the relationship between the civil and military staff in the Department has been better or more constructive. We have invested great effort in a joint team approach to the work we do.
I mentioned previously that a part of this process was the Department letting go of many things and delegating to the Defence Forces, subject to audit, a range of administrative and procurement functions. The overall experience of that has been very positive. As part of this as well, we wished to reshape and redevelop the Department of Defence in some way. Apart from the fact that the Department has got smaller, it also has become much more professional. We were very proud to be the first Department to get the FÁS Through People award for the entire Department. We have invested a very great effort in training and developing our staff. We are seeing the benefit of that very much, focusing on what I call the higher level policy functions, leaving the routine management of the Defence Forces at the appropriate level, in so far as it is sensible and prudent to do so, and letting people make decisions at the appropriate level. Our overall experience has been very positive in that regard.
Are there any other questions?
What is the total number of Army pensioners? This relates to Vote 37. What are the conditions for getting a pension in terms service, etc.?
Mr. Michael Howard
It is somewhere of the order of 8,000 to 10,000.
It is a larger number than the establishment.
Mr. Michael Howard
Historically, personnel of the Defence Forces generally qualified for a pension after 21 years' service, regardless of age. The arrangements have been changed more recently for people who have joined so that in the future that entitlement to a pension will expire. For now, however, the majority of serving personnel would have an entitlement to retire after 21 years. Obviously, at the height of an economic boom, many people who were comparatively young might have chosen to exercise that option. In the case of officers, historically, one qualified after 12 years' service. That was quite a small pension but one qualified for it after 12 years' service. However, in common with all public servants, in future people will have to serve to age 50 minimum before any pension is payable. A new scheme is in the process of being introduced and, in fact, is almost finalised at this stage.
I thank Mr. Howard for his answers. I call on Mr. Buckley to make any final comments he may have on the proceedings.
Mr. John Buckley
Reflecting on the discussion, I suppose the general principle where there are payments for emergencies is that there should be some form of sunset clause. The sanctioning originally was that it would only apply for the duration of the special arrangements in the Border area. However, we must recognise that with allowances in the nature of pay, expectations build up over time and these can only be phased out through the conciliation and arbitration process and under the terms of Towards 2016 arrangements.
The challenge now facing the Department, in taking the interests of the taxpayer into account is either to eliminate the payments totally and achieve economies or achieve efficiencies, modernisation and change shown to be capable of yielding at least the same pay-back as the costs that would accrue if this pool of money was used for some other purpose within the system.
I thank Mr. Buckley for his responses. He will communicate with the secretariat on a number of issues outstanding.
We had some major questions about certain aspects of Mr. Buckley's operation and the Defence Forces but it goes without saying that generally speaking we are proud of the work being done, both by the Department and the Defence Forces and as public representatives we support the work.
Mr. Michael Howard
Thank you.
The witnesses withdrew.
Is the committee agreed on Vote 36 — Department of Defence and Vote 37 — Army Pensions, and on Chapter 11.1 — Border Duty Allowance? Agreed.
Our meeting next Thursday will resume dealing with special report No. 10 from the Comptroller and Auditor General — general matters arising on audits, non-commercial State-sponsored bodies, first annual report and financial statements 2007.
The committee adjourned at 12.12 p.m. until 10 a.m. on Thursday, 6 November 2008.