COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 3 May 2012

Vote 2 - Department of the Taoiseach (Revised)

Mr. Martin Fraser(Secretary General, Department of the Taoiseach) called and examined.

Chairman

I remind members, witnesses, members of the press and others in the public gallery to turn off their mobile phones because they affect sound transmission at the meeting.

I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that where possible they should not criticise or make charges against a member of either House, a person outside the House or an official by name or in such a way as to make him or her identifiable.

Members are reminded of the provisions within Standing Order 158 that the committee should also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government, or the merits of the objectives of such policies.

I welcome Mr. Martin Fraser, Secretary General at the Department of the Taoiseach. I ask him to introduce his officials.

Mr. Martin Fraser

With me is Mr. John Shaw, assistant secretary in charge of corporate affairs, Ms Pauline Kiernan, finance officer, and Mr. Paul McGarry, head of corporate affairs. There is also a representative of the Department of Public Expenditure and Reform.

Mr. Gerry Quigley

I am Mr. Gerry Quigley from the Department of Public Expenditure and Reform.

Chairman

You are the newly appointed Accounting Officer, Mr. Fraser, and I wish you well in your work. I ask Mr. McCarthy from the Office of the Comptroller and Auditor General to introduce the 2010 annual report of the Comptroller and Auditor General and appropriation accounts: Vote 2 - Department of the Taoiseach.

Mr. Seamus McCarthy

Thank you, Chairman. I have a couple of brief remarks on Vote 2 which provides for the salaries and expenses of the Department of the Taoiseach and for a small number of other services. The appropriation account shows that gross expenditure by the Department of the Taoiseach in 2010 was €21.3 million. After deduction of appropriations-in-aid of almost €1 million, the net expenditure was €20.3 million. The Department's pay costs amounted to €12.2 million or 57% of the gross total.

The account indicates that the grant-in-aid paid to the National Economic and Social Development Office was €2.5 million. The office was established under the National Economic and Social Development Office Act 2006. The National Economic and Social Council is a constituent body of that office. The council was established in 1973 to analyse and report on strategic economic and social matters. The National Economic and Social Forum and the National Centre for Partnership and Performance were also constituent bodies of the office, but they were dissolved with effect from 1 April 2010.

The Vote also provides for payments of expenses in relation to the Tribunal of Inquiry into Payments to Certain Politicians, generally referred to as the Moriarty tribunal. In 2010, payments amounting to €3.1 million were incurred on the Vote. Note 6.1 discloses that, as of 31 December 2010, a total of €41.4 million had been incurred on the Vote in relation to the tribunal since its establishment in 1997.

The Comptroller and Auditor General issued a clear audit opinion in relation to the 2010 appropriation account for Vote 2. No significant matters in relation to the Vote were included in his report on the accounts of public services for 2010.

Chairman

I ask Mr. Fraser for his opening statement.

Mr. Martin Fraser

I thank the Chairman for his welcoming remarks earlier. I welcome the opportunity to appear before the committee today. I have circulated a short briefing paper, as requested, as well as a number of accompanying documents which I hope will be of help to the committee.

The Department of the Taoiseach is a small Department whose total expenditure in 2010 was just over €20 million. I am glad to say, as Mr. McCarthy has said, that we have consistently received a clean audit report from the Comptroller and Auditor General. We place great emphasis on our financial management and are under continuing close public and parliamentary scrutiny. We were among the first Departments to establish an internal audit committee, to introduce a modern financial management system in the Department, and to participate in the financial shared services project.

We have undergone significant change in recent years, as the committee will be aware, including a significant reduction in expenditure and staff numbers since 2008. I have circulated a graph to the committee which shows that expenditure is down. It was in excess of €40 million for the Estimates in 2008, while the Estimate for this year is around €20 million. As part of the trend, the appropriation account for 2010 showed a reduction of 16% on the 2009 outturn.

The Department retired seven subheads in 2010 as a number of bodies under the aegis of the Department were dissolved while others were absorbed into the Department. This is a rapid response to the need to save money as a result of the economic crisis.

I note the Department's performance with regard to procurement and implementation of the performance management and development system, PMDS, is mentioned briefly along with that of other Departments in the 2010 report of the Comptroller and Auditor General. The Department has established a procurement advisory group and we are taking an active approach to ensure we comply with best practice and secure savings wherever possible. We have run tender processes with three areas that are mentioned in that report. The Department has also taken action to improve implementation of PMDS and we are already at a completion rate of over 90% for this year.

I would like to mention the significant changes to the Department's structure and role. These reflect the priorities of the new Government as outlined in the programme for Government. They are outlined in detail in our new strategy statement, as well as in our recently published action plan under the organisational review programme. They include the establishment of a new programme for Government offices and an Office of the Tánaiste, both from existing resources; the establishment of a new integrated European affairs division, which involves the transfer of staff and functions from the Department of Foreign Affairs and Trade; and the transfer of staff and functions relating to public service reform from ourselves to the new Department of Public Expenditure and reform. For the committee's information, I have circulated a copy of the Taoiseach's recent statement to the Select Committee on Finance, Public Expenditure and Reform, which outlines these changes in more detail.

I thank the staff of the Department for all their hard work throughout the year, but also for their co-operation in all these changes which I believe leave us well placed to help the Taoiseach and the Government to meet the serious challenges we know are facing the country. I would be happy to answer any questions members of the committee may have.

Chairman

May we publish your statement?

Mr. Martin Fraser

Yes.

Deputy Derek Nolan

I welcome Mr. Fraser and his officials to the committee. I congratulate him on his appointment as Secretary General of the Department. It is a big job and I wish him well in it.

I wish to concentrate on the costs of the Moriarty tribunal. It is stated in section 6 of the Comptroller and Auditor General's report that the total cost of the inquiry to date comes to €41.396 million. That was at the end of December 2010. Can Mr. Fraser give members an updated position on the cost of the inquiry in terms of expenditure so far incurred by his Department?

Mr. Martin Fraser

I thank the Deputy for his remarks. The latest figure we have is that €43.182 million has been spent to date. If I am correct, the spend last year was €1.6 million. The estimate for this year is €650,000. There is a relatively small estimate for this year in the hope the tribunal can finish its work. I hope €650,000 will be enough for it to complete its work. The major outstanding item is costs. We do not have an estimate for the costs of the tribunal. It is a matter for it to decide whether costs are payable; it will then be a matter for the Chief State Solicitor's office and, possibly, the Taxing Master. As the committee is aware, the Comptroller and Auditor General did some work in this regard a couple of years ago and came up with estimated costs of between €40 million and €80 million. That is the best information we have. We do not have ongoing contact with the tribunal on these matters, but it has been made clear to us and it is included in the Comptroller and Auditor General's report that the award of costs is a sensitive matter for the tribunal and not something it wants to discuss. As the committee is also aware and as the Comptroller and Auditor General said, we facilitate rather than supervise the work of tribunals. The best estimate I can offer, therefore, is the one the Comptroller and Auditor General came up with. To date, we have received claims to the value of €1.7 million which are with the Chief State Solicitor's office.

I should mention an initiative that came from the Taoiseach's Department, with the co-operation of the Department of Public Expenditure and Reform, which was recently approved by the Government, namely, a proposal for a State legal costs unit which we hope will bring together the expertise available in the public service in order that we will have a better and cheaper service in achieving the best value on costs and cost accountants. This process is under way. That is the latest information I have available.

Deputy Derek Nolan

The Comptroller and Auditor General's figure is between €40 million and €80 million, plus the Department's costs. Therefore, we are looking at a possible figure somewhere between €80 million and €120 million for the possible total cost of the tribunal. The Department of the Taoiseach will fund third party costs. I understand the Department cannot interfere with the judge in making his decisions on these matters, but, as the body responsible for paying the money through its Vote, it is entitled to know when it will be expected to pay out on the claims received. Has there been correspondence on when the Department expects the matter to be concluded in order that it can remove it from the books?

Mr. Martin Fraser

There are a couple of points to be made in that regard. The first is that as the judge is independent, we do not pressurise him in any way, before, during or after his reporting phase. The money is not even in our books in that a contingency figure of between €40 million and €80 million would dwarf our entire Vote. We spent €17.5 million in total last year. Therefore, it would not make sense for the Taoiseach to go to the House to seek a sum of €40 million, €60 million or €80 million with a guesstimate. Nothing has been included in the Vote for this year to fund anything other than the administrative costs. There is, however, provision in the Central Fund, or in a contingency fund, of which the Department of Public Expenditure and Reform and the Government are aware, to meet these costs.

I will make no bones about it - we have allocated €650,000 in the hope it will help to bring the matter to a conclusion. That amounts to about half of the annual running costs. If it proves insufficient, we will have to introduce a Supplementary Estimate. We will want the staff of the tribunal to explain why they need another allocation to keep working. However, that said, I want to be very careful about this, as I have to respect the independence of the judge.

Deputy Derek Nolan

What is the purpose of the €650,000 in funding allocated?

Mr. Martin Fraser

It is to meet the administrative costs of the tribunal, including wages.

Deputy Derek Nolan

How did the Department arrive at that figure? Was it in negotiations or consultations with the inquiry?

Mr. Martin Fraser

To be frank, the way things are, the only people with whom one can negotiate are in the Department of Public Expenditure and Reform. The figure of €650,000 amounts to approximately half the annual running costs. Given that the tribunal reported in the first half of 2011 – I cannot remember the date – it is not unreasonable to hope it will finish up this year. However, if it does not, we will have to talk to those involved. The Taoiseach may be faced with the possibility of having to go back to the House for a further allocation to keep the tribunal going. The setting up of the State legal claims unit is also deliberate on our part in making sure the State has the capacity to deal with costs in order that when the judge awards costs, there will be no need for any administrative staff, solicitors or anyone else at the tribunal end, that we will be able to do it from within the public service in the most efficient way possible. That is what we are trying to do, but, as I stressed, the judge must fulfil his role, too.

Deputy Derek Nolan

We hope the tribunal will conclude by the end of the year. That is what the budget provides for. We should know by the end of the year from where third party claims for costs are coming. I presume that when the tribunal finishes, we will have concrete figures.

Mr. Martin Fraser

I hope so. The first question is whether the tribunal will get the work done on time, while the second is how much of the costs figure will be contested and what the outcome will be. As the Deputy is aware, costs claimed, awarded and paid are different. Sometimes the figures are significantly reduced when the lawyers get together to try to hammer out a deal. I hope we will have an outcome this year. That is our devout wish.

Deputy Derek Nolan

Even in the post-reporting period is the Department's relationship with the tribunal still very much hands-off on the basis that it is very much independent?

Mr. Martin Fraser

Yes.

Deputy Derek Nolan

The Committee of Public Accounts looks after the public purse. It is often asked what is the price of corruption or corrupt politicians. We can see this in what we are looking at. A total of €43 million has been spent to date in investigating issues related to corruption, with potential costs of up to €80 million for people who were investigated, examined and gave evidence, leading to a figure of €120 million as the cost of one tribunal dealing with corruption. That figure is telling.

Chairman

Is there a list available of those who were paid their costs?

Mr. Martin Fraser

My understanding is that it is with the Chief State Solicitor's office. I hope in due course that it will be with the new legal costs unit. I do not believe any claims for costs have yet been paid. There are 13 claims to a value of €1.78 million, none of which has yet been paid. The judge has said the people concerned are entitled to their costs, which is his call. He has certain rules to follow. The matter will then go to the Chief State Solicitor's office to be examined. The legal cost accountants on that side will battle it out with the lawyers on the other side. We have not yet paid over any money, but we will in due course when we receive advice from the Chief State Solicitor's office.

Chairman

The figure to which I refer is €41 million.

Mr. Martin Fraser

The sum of €41 million is the cost of the tribunal; it is not the figure for third party costs. I can circulate those costs to the Chairman. I think the figure for legal fees is €33 million and the balance comprises administrative costs.

Chairman

Mr. Fraser can read the list.

Mr. Martin Fraser

The figures I have to the end of March are: Mr. John Coughlan - €9,285,628; Mr. Jeremiah Healy - €9,517,495; Ms Jacqueline O'Brien - €6,924,576; Ms Maire Moriarty - €2,500,734; Mr. Stephen McCullough - €2,046,737; Mr. Patrick Dillon-Malone - €309,077; Mr. Stuart Brady – solicitor - €2,014,105; Mr. Darach McNamara – legal researcher - €778,187; Mr. Brian McGuckian - €324,122. This brings us to a total of €33.7 million. The payments relate to different periods, many of them from 1997, although not all.

Chairman

What is the number of staff involved?

Mr. Martin Fraser

The number of staff has fluctuated. There are fewer staff now that the tribunal has reported. We have a junior counsel, a solicitor and three administrative staff who are civil servants on secondment, as well as the judge.

Deputy Kieran O’Donnell

I wish Mr. Fraser well in his new appointment. He has outlined that nine lawyers, some of whom, I presume, are junior counsel, as well as senior counsel, were paid a total of €33 million.

Mr. Martin Fraser

That is correct.

Deputy Kieran O’Donnell

That gives an average payment of €3.7 million per individual. To the ordinary person that seems to be a crazy amount of money. Over what period were the payments made? To how many years do they relate? Are they all physically paid?

Mr. Martin Fraser

They are all physically paid. I have circulated that table to the secretariat. There are three senior counsel, three junior counsel, a solicitor and two legal researchers. I should stress that some individuals received a lot less than others.

Deputy Kieran O’Donnell

Who are the senior counsel?

Mr. Martin Fraser

The senior counsel who received €9 million, €9 million and €6 million were John Coughlan, Jeremiah Healy and Jacqueline O'Brien. The period covered for Mr. Coughlan was 1997 to April 2010, and for Mr. Healy and Ms O'Brien the period was 1997 to March 2011. With the exception of Mr. Coughlan they were involved for the full duration of the investigative and reporting phases of the tribunal.

Deputy Kieran O’Donnell

Did they work exclusively on that over the period in question?

Mr. Martin Fraser

That is my understanding but I will have to confirm it.

Deputy Kieran O’Donnell

Do further legal fees remain to be paid?

Mr. Martin Fraser

In terms of that figure, two junior counsel and a solicitor continue to work for the tribunal. This brings me back to the point about allocating a small amount of money this year in the hope that it can be brought to a conclusion. Certain fees remain to be paid.

Deputy Kieran O’Donnell

What members of the tribunal legal team are still working?

Mr. Martin Fraser

I understand Mr. McCullough, a junior counsel, and Mr. Brady, a solicitor, are still working at the tribunal. Mr. Dillon-Malone is engaged intermittently at the discretion of the judge.

Deputy Kieran O’Donnell

Everyone else has finished.

Mr. Martin Fraser

There are also three administrative staff.

Deputy Kieran O’Donnell

Mr. Fraser expects that €650,000 would bring the work to a conclusion.

Mr. Martin Fraser

That is what I hope.

Deputy Kieran O’Donnell

In direct costs.

Mr. Martin Fraser

Yes.

Deputy Kieran O’Donnell

Will the legal costs go before the Taxing Master or will a costs accountant be appointed? Who will adjudicate the claims?

Mr. Martin Fraser

The Comptroller and Auditor General's report outlines the procedure to be followed. I understand the judge decides whether third party costs are payable to the individuals who were represented at the tribunal. The costs are then submitted to the Chief State Solicitor, who in turn engages expertise and decides what is reasonable or, if necessary, fights it out with claimant.

Deputy Kieran O’Donnell

How long does Mr. Fraser anticipate the project to take, based on the legal advice received?

Mr. Martin Fraser

I do not know the answer at present because we do not have enough information. The Government has established the State legal claims unit precisely to deal with these matters expeditiously and achieve the best possible value for money. The best expertise that the State can assemble will be applied to ensure costs are minimised. However, these are early days. We do not have information about the judge's decisions other than the 13 cases mentioned, which total €1.78 million. If we are going to reach €40 million or €80 million we are clearly at an early stage.

Deputy Kieran O’Donnell

Does a legal process exist whereby third party claims must be submitted to Mr. Justice Moriarty before a specific date?

Mr. Martin Fraser

I am not aware that such a process exists. It is a matter for Mr. Justice Moriarty to decide how to deal with claims.

Deputy Kieran O’Donnell

It means that a terrible contingency hangs over the Irish taxpayer. In addition to the €43 million spent on direct costs the Comptroller and Auditor General estimates contingency costs of between €43 million and €64 million and overall costs of up to €120 million. It is extraordinary to the ordinary observer that the tribunal employed nine legal people who earned €33 million between them. Is it correct to say this figure covers the period until the end of 2011?

Mr. Martin Fraser

It covers the period until March 2012.

Deputy Kieran O’Donnell

Each individual received approximately €260,00 per year on average over the tribunal's 14 year lifetime. Why can we not quantify the costs in terms of the judge and the procedures in order to create certainty for the taxpayer? When is it expected that the legal claims unit will be up and running?

Mr. Martin Fraser

The Government decided in March to establish the unit. This was done at our initiative because we share the Deputy's concerns. It is being established on an administrative basis and meetings have been held with the interested parties. As the Office of the Chief State Solicitor currently has the claims, it will probably process them. My colleagues in the Department of Public Expenditure and Reform wrote to the relevant parties last week in order to establish the unit on an administrative basis. The State Claims Agency has the tools for this type of work and appears to be happy to take it on. I hope it will be set up quickly so that it can get stuck in.

Deputy Kieran O’Donnell

Does the Department of the Taoiseach have the power to seek an up-to-date position from Mr. Justice Moriarty in respect of third party cost submissions?

Mr. Martin Fraser

I have no problem doing that but the position has not changed over the duration of the tribunal. As the Deputy will be aware, the tribunal was established by the Oireachtas and we do not have a supervisory role. It inquired into very sensitive matters relating to Members of the Oireachtas..

Deputy Kieran O’Donnell

The Department has control over costs.

Mr. Martin Fraser

We do not really have control over costs. More than anything else, the cost of the tribunal is related to its duration. That was not within our control because the judge had to make his own decisions. People are familiar with the ins and outs of that issue. I have no difficulty with writing to the judge on behalf of the committee to seek clarity on the matter. It is not the case that we have neglected to press the point but, as is noted in the Comptroller and Auditor General's report, he has told us on more than one occasion that he believes the award of cost is part of his work. He has to make findings about why he wants to award costs, which in turn reflects on the individuals concerned. For us to seek that information when he is not ready to provide it-----

Deputy Kieran O’Donnell

From a public interest viewpoint, it would make sense to write to the judge to seek an up-to-date position on the adjudication of costs. These costs were incurred over a period of 14 years and they should be relatively easy to quantify based on the claims that have already been submitted. The judge would not necessarily be delayed in adjudicating costs.

Mr. Martin Fraser

I will write to him and revert to the committee on the matter. I reiterate that there is sensitivity in regard to whether costs are allowed by the judge.

Deputy Kieran O’Donnell

I am in no way interfering with the work of the judge. He is independent. However, the taxpayer who picks up the bill is entitled to know the current position.

Mr. Martin Fraser

Absolutely. I will write to him.

Deputy Kieran O’Donnell

Note 5.1 under Vote 2 in the Comptroller and Auditor General's report refers to allowances and overtime for higher, special and other additional duties. The maximum claim by one individual in 2009 was €164,566, whereas the highest individual claim in 2010 was €83,391. How did these payments arise given that they are outside the normal salaries for those concerned?

Mr. Martin Fraser

The figures which the Deputy cited relate to the same individual, who was a special adviser to the then Taoiseach. This individual was previously a civil servant and his remuneration was calculated on the basis that he would receive his Civil Service salary, which remained pensionable, along with an additional allowance to bring him up to the salary of a special adviser. As I recall, the annual sum in additional payments was €83,000, which brought his salary to €216,000. I am open to correction on that. The figure of €164,000 reflects this payment plus arrears because the matter was not resolved until 2010.

Deputy Kieran O’Donnell

When did the individual join the Department?

Mr. Martin Fraser

On the appointment of Brian Cowen as Taoiseach.

Deputy Kieran O’Donnell

An issue arose with the payment until the end of the year. Is that correct?

Mr. Martin Fraser

The difference between the substantive salary and the pay of special advisers was €104,939. This pay rate was sanctioned by the Department of Finance. There was a delay in this coming into effect and 18 months of arrears accumulated at the end of 2009 for a total of €96,000. The balance of €68,000 was paid on time. In 2010 the allowance was reduced to €83,000 arising from Department of Finance circular 28/2009, which I presume was a pay cut circular.

Chairman

I ask for further clarification on the €33 million already paid. The daily fees are set out. Were these fees renegotiated during that period? The daily rate for a senior counsel was €1,955, exclusive of VAT. Did that rate remain the same until the tribunal completed its work?

Mr. Martin Fraser

I understand the fee was set at €2,500 at the outset and reduced by 8% in March 2009 and 15% in February 2010. The figure on the table reflects the most recent rate, following the two reductions.

Chairman

They are still getting €1,955, exclusive of VAT.

Mr. Martin Fraser

They are not there any more.

Chairman

No, but that is the most up-to-date figure. Why is there a difference in the senior counsel range? One senior counsel received €1,564 per day.

Deputy Kieran O’Donnell

The same question arises in respect of the junior counsel, one of whom received a higher fee than the others.

Mr. Martin Fraser

I understand the fees reflected the seniority of the lawyers or the going rate for their work. Lawyers are paid at different rates according to their experience.

Chairman

It is a substantial figure. I appreciate that the judge will be making the decisions on third party costs but has a timeframe been agreed? Our examination of a different tribunal included the timeframe through which similar decisions would be made. Mr. Fraser acknowledged that the Moriarty tribunal has not established a timeframe for the submission of claims. Who makes the decision that claims should be submitted within a timeframe? Is it for Mr. Justice Moriarty to decide on the overall timeframe for adjudicating costs?

Mr. Martin Fraser

The Chairman is correct in saying it is a matter for the judge to receive and assess claims for costs. Once he decides that individuals are entitled to costs, their claim transfers to the Chief State Solicitor or, I hope, the State legal claims unit to accept or contest the amount. It is a matter for the tribunal in the first instance to process these claims.

Chairman

Mr. Fraser agreed to write to the judge, which is fair given that we are trying to arrive at an understanding of the costs to which the State might be exposed. We are anxious to define that figure at the earliest opportunity but to do so we rely on the judge to instruct claimants to submit their costs quickly in order to wind up their affairs. Once the claims have been referred to the legal claims unit, the Department will at least have an idea about the total amount being claimed. If we do not ask the person in charge of the tribunal to do this for us we will continue to wonder how much the State is exposed to. That would be unfair to the taxpayer.

We need closure on the costs. None of us want to interfere in the process but we want to act wisely on behalf of the taxpayer and, therefore, we desire a speedy resolution. The letter that Mr. Fraser might send to the judge should not be seen as an attempt to interfere with the tribunal. Perhaps we should also send the judge a transcript of this meeting so that he fully understands our concern about costs. It is a huge ask for any Department to budget for the difference between €40 million and €60 million. It is also a huge burden for the taxpayer. I ask the judge to understand our position and the job we have to do. The understanding that the taxpayer will pay the bill should be paramount. Perhaps the transcript of this meeting can be sent to the judge along with Mr. Fraser's letter.

Mr. Martin Fraser

I would be happy to do that.

Deputy Kieran O’Donnell

Will the fees charged by senior counsel be index linked to inflation or are they based on the fees charged at the time? Some of the fees relate to work carried out 14 years ago.

Mr. Martin Fraser

I honestly do not know the answer to the Deputy's question. I do not believe they are index linked but we will seek clarity on that. The experience in other tribunals is that fees are heavily discounted through negotiation. It is a field in which lawyers are very adept but we will have to be equally adept in defending the taxpayer's interest.

Deputy Kieran O’Donnell

Is the Department at liberty to offer the judge any assistance he requires to expedite the process of quantifying the level of third party costs?

Mr. Martin Fraser

I cannot assist him or interfere in any way with his work in deciding whether costs are awarded.

Deputy Kieran O’Donnell

I understand that.

Mr. Martin Fraser

When he has decided who is entitled to costs the claims come to us. We believe the new unit we have established will be very effective in this regard.

Deputy Kieran O’Donnell

We need closure in this area.

Mr. Martin Fraser

I could not agree more.

Deputy Paschal Donohoe

I welcome Mr. Fraser and his colleagues and congratulate Mr. Fraser on his appointment. I will touch briefly on the issues raised by my colleagues regarding subjective payments but I want to concentrate on the Department's strategy statement for the next three years.

The context to the matters raised by the Chairman and Deputy O'Donnell is our previous hearing with officials from the Department of the Environment, Community and Local Government regarding the tribunal that was under that Department's care. I was perturbed to learn the amount of costs which had been allocated many years ago but have not yet been billed to the State. From recollection, we were at times talking about payments due that were originally determined in excess of eight years ago and the State still had not been billed for them. That was a matter of great concern to us all, which we raised with your colleague, the Secretary General of the Department of the Environment, Community and Local Government. However, in regard to the committee's request to contact the tribunal, we are not looking to influence its work, as I acknowledge Mr. Fraser is not. There, understandably, always appears to be sensitivity regarding any contact between the Houses of the Oireachtas and the Government and the tribunal. There should be and I can understand that but all we are looking to do is to determine where the work stands as opposed to influencing its outcome and that is the distinction I would make. The committee feels that the uncertainty regarding where it stands places a burden on taxpayers that they could do without. I hope the communication Mr. Fraser has with the judge and the tribunal will reflect that.

I refer to the Department's strategy document and the section on page 9 about how it is changing and learning lessons. It says that it is essential that we learn from the experience of the past and that, "Our approach in the future will be guided by the following principles: the need for active, open risk assessment and scenario planning; the need to avoid group-think or herding and selective reading of evidence; and the importance of open discussion, listening to discordant voices and challenging conformist thinking". How are we doing in this regard?

Mr. Martin Fraser

That is a broad question.

Deputy Paschal Donohoe

I do not raise it in a flippant manner.

Mr. Martin Fraser

Of course the Deputy does not. I understand that.

Deputy Paschal Donohoe

However, this is such a thread in how we got into this level of difficulty. It is superb that it is recognised in the document that this needed to be changed. It is the first time I have seen this explicitly enunciated in a document and I would like to know what actions and steps are being taken and how Mr. Fraser assesses progress in this regard.

Mr. Martin Fraser

There are a couple of ways of looking at it. The language is familiar because it is from the reports. The Nyberg report referred to group-think and herding. We have looked at all the reports very carefully and when we put together a strategy we wanted to learn lessons. It is a process that we, the Civil Service and the entire public sector must go through to make sure we do not make mistakes. The mistake we probably will not make as a country is have another property bubble or a bank bust like the ones we have had because I suspect the fences will be put up and society and systems will be careful about that. There is much tougher regulation and there are new people in the Central Bank and the regulator's office and so on. I do not think it is enough just to say, "Let us make sure those mistakes do not happen again". We need to have a way of thinking and working that looks at things that might go wrong.

We have a totally new management team in the Department and it is early days for us to try to put meat on the bones of these thoughts. We wrote them down in order that we do not forget them and in order that, frankly, we would be asked about them, which is the best way not to forget about them.

The Deputy asked how we are doing. The way the Government works and the way our Department contributes now is overwhelmingly through the Cabinet committee and government system. We are at the centre and they are the processes we use. We are not in public management, social partnership or any place which may bring us down certain ways of thinking. Elsewhere in this strategy statement and our action plan, we talk about the need for a row every now and then. It cannot always be consensus and a nice phrase used is "constructive conflict".

Deputy Paschal Donohoe

Has Mr. Fraser had many big rows recently?

Mr. Martin Fraser

Loads of rows; we are all fighting. It is good.

Deputy Paschal Donohoe

It is; that is why I am raising it.

Mr. Martin Fraser

It is important. We have the Cabinet committee system and the Taoiseach is an active, energetic chairman of a series of Cabinet committees and that works well. The most important Cabinet committee is the Economic Management Council and that is crucial to how things are managed now because that gives the Taoiseach, the Ministers for Finance and Public Expenditure and Reform and the Tánaiste time every week to go through all the big economic issues for an hour or hour and a half. We have a dashboard which we get on all the banking statistics, which I think is publicly available from the Department of Finance, but we get to look at the picture there. We are developing one on the real economy. Between the troika and all the attention that has been paid to the economy, I do not think we are lacking in data or understanding of the situation the country is in at the moment because we are well supervised and there is huge attention on everything economic. So far so good on that.

We are coming out of a crisis and we have a clear plan with the troika, the programme for Government and Government policy as to how we will manage our way out of that crisis. This becomes much more important if we get complacent as the recovery comes in a year or two and we start saying, "The way we are doing it now is perfect and nothing can go wrong". We, therefore, have to improve our systems in the public service to make sure we are monitoring risk. If people say, "That will not work" or "That will go wrong", they have to be listened to. It does not mean they are right but people should be asked why they think something is wrong as opposed to saying this is fine and this is only possible outcome. We have to build up those systems. If systems are in place, including in the Central Bank, the regulator's office and through the Economic Management Council, the way we behave as public servants, the way the Government works and through supervision, including Parliament, if they are open, if we have risk assessment, and if we look at alternatives and constantly examine what we are doing and what we think is going on in the country, that is the way we can not only avoid a repeat, which I think is about as likely as hyperinflation in Germany, but notice if something else is happening.

Deputy Paschal Donohoe

Mr. Fraser said a property bubble is unlikely to happen again. Politicians, civil servants and the Governor of the Central Bank have collective responsibility and we always say this following the latest bubble but it happens again. We are dealing with the consequences of the asset boom we experienced in Ireland. Asset booms are as old as economic history and they happen all the time. I accept Mr. Fraser's comment that because systems have been strengthened and new people have been employed, it is unlikely that a bubble will recur or it will have the same severity, but what about the other challenges we face? The charge of group-think could be levied in other areas as well. We are doing the right thing in how we are managing our banking system but is there a debate within the public service about different options? The heading on the section I referred to in the strategy statement gives me hope that there is. What is the Secretary General of the Department of the Taoiseach doing to make sure the person who puts his hand up in the corner and says this he does not believe something and it is like the emperor's new clothes is rewarded and recognised for challenging the consensus as opposed to participating in it?

Mr. Martin Fraser

The Deputy is correct that I did not say we would not have a property bust again but I think it will be the least likely disaster to befall us. We have to be careful that we do not focus all our efforts on preventing a repeat and fall into the trap the Deputy is worried about, which is that something else happens because we have reached a new consensus that this time it is different. We are in an intense crisis with intense political, media and international attention on the economy and the Government is dealing with this in a certain way. There is broad, not universal, consensus either in Parliament or in the country about the way it is being done but a clear, detailed plan is being carried out and it is closely monitored by the Government, the media, the people and internationally.

The Department faces a cultural as well as a systemic change. We need to make sure our systems respect and interrogate different views. We do not have a magic way of doing that, but we will develop that and make sure. That is why it is written down here. More importantly it is a cultural thing and there needs to be a culture in society, but also in the Civil Service and public service that listens carefully. This is very difficult, by the way, because experienced politicians on the committee know that the environment in which a politician, a Minister or a Taoiseach operates is a very adversarial environment all the time and it is not particularly conducive to having a wide variety of views on a particular topic because that is not-----

Deputy Paschal Donohoe

I have experience of that within political parties for exactly the same reason.

Mr. Martin Fraser

It is difficult. In a very high-pressure environment there is always a demand for one perfect defensible line and part of our job is to help the Government. Another part of our job is to ensure we are listening to discordant voices. We are assessing risk. It is not only for our Department. Our Department has a role in ensuring other Departments are able to and are allowed to do their part. The Department of Finance is crucial in this. I know the new Secretary General there has very clear views on risk assessment and all these things. The Department of Jobs, Enterprise and Innovation is important. Every part of the system must do its bit and that is the best defence we have against these problems.

Deputy Paschal Donohoe

Page 11 of the document refers to strategic thinking and forward planning, which relates to some of the points the Secretary General just mentioned about risk management, reviewing global trends and developing our planning structures. It states the Department was investigating establishing a dedicated work stream headed by a senior manager which would be charged with this work. Is that work under way?

Mr. Martin Fraser

We have not established a work stream. By way of explanation, our management committee, which is where the senior manager would come from, has only recently been completed. The last new assistant secretary joined us in March or April. The full management team is assembled now. He, for his sins, is in charge of European matters, which means he is involved to a certain extent in the referendum and so forth. I had it in my mind, when that person joined, to look at who might do this work and who would head it up, but we are already looking at these things. It is partly cultural.

We are looking at how we can develop jobs in the economy and that requires us to look beyond the now. Again the jobs crisis will not be solved by getting back - we have to get to a new place with different types of jobs in a different type of economy. We are looking at all that and at opportunities. Obviously the Taoiseach's work in China recently is a major example of a so-called mega-trend, so to speak, that being the growth of Asia, China in particular. It is a little bit piecemeal. I will not try to spoof and say we have some super machine working, but we are going to build it up and we are going to try to look at this. We have been looking at Singapore, which is a very interesting place. I had a couple of chats with the Singaporean ambassador about this. He sent me in some of the stuff. I certainly think they have a very interesting way of looking at how the future can be looked at. It is about scenario planning and it is about looking at alternatives. It is not only for us. It is for our colleagues across Government as well, but we are going to work on it.

Deputy Paschal Donohoe

I wish to conclude on a completely different area. The Secretary General shared with us the Revised Estimates for the Department of the Taoiseach, which were probably presented to the select committee dealing with Estimates a few weeks ago. I was struck by a box entitled "Context and Impact Indicators". Among the measures mentioned were Eurobarometer readings regarding the percentage of the population who expect the economic situation in Ireland to improve. There were also measures of deprivation indicators and average annualised disposable income. I welcome this development. Estimates from, for example, the Department of Transport, Tourism and Sport, do not contain context indicators - if they do I never saw them - covering journey times or people's ability to access public transport, which is the outcome it is trying to achieve. The outcomes we are trying to achieve relate to people's income and how they feel about the future. It is good to see it referenced in the Department's Estimates. I do not know how often it is looked at - I hope it is looked at regularly - but it is really good that it is in the document. I welcome that.

Why are the number of infringement cases over the transposition of EU directives included in the document?

Mr. Martin Fraser

I am somewhat indebted to my colleagues in the Department of Public Expenditure and Reform for helping us with this, because as the Deputy knows, this is a new way of setting out the Estimates and they gave us some help. We could have any number of indicators given that we are in charge of nothing or everything depending on how one wants to look at the situation. I will comment about that more generally because it comes from the strategy statement as well. We want to focus on outcomes. In times gone by we had a system where if a process worked or a report was produced or something was done, that was grand, but we want to focus on outcomes.

We have had a long, serious conversation at the management committee of the Department about this. Jobs is number one and our relationship with Europe is number two. We want to look at the service provided to the Taoiseach and implementing the programme for Government. We have eight priorities. We are going to measure them, but we have said to ourselves that we are going to get bad results on some of them. The big number in our organisation is the unemployment number. That is the one that matters the most. There is going to be a red light on that number because we are not happy about 14%. Nobody in Government is. We are going to look at that outcome. We want to ensure our processes are good. This is another example where we want, as the Deputy said, to look at outcomes for people. It is not just good enough to be doing one's work; one has to be getting the outcomes the Government wants and the people need. That is why they are there and while we could have any number of outcomes, unemployment is probably the big one for us.

I am not hugely familiar with the ins and outs of the infringement. The reason that figure is going down is that the Government has been working very hard over the last year and I suspect it has got better again in recent times to deal with infringement cases to transpose regulations and to get that end of-----

Deputy Paschal Donohoe

Given that we are dependent on the completion of the Internal Market in other countries, we cannot be lagging behind.

Mr. Martin Fraser

Exactly.

Deputy Paschal Donohoe

I thank Mr. Fraser.

Deputy Kieran O’Donnell

Has Mr. Justice Moriarty returned to the Bench or is he still involved in the tribunal?

Mr. Martin Fraser

Again, subject to correction, I think he is still full-time in the tribunal, being paid by the Courts Service. If that is wrong I will come back to the Deputy, but that is my understanding.

Chairman

Before calling on Mr. McCarthy, I wish to take advantage of Mr. Fraser's presence to make a general comment. Page 12 of the strategy statement refers to culture. On the floor of the House during discussion with the Taoiseach, reference was made to the whistleblower who made public some information some weeks ago. It would be a sign of the times and a sign of change if such whistleblowers continued to feel part of the organisation even after they spoke up about matters. The culture needs to change. In terms of groupthink or the herd mentality that people talk about, perhaps if people such as her had been listened to at that time, there might have been the one voice at the end of it, but it might have been tempered somewhat by what she was saying to senior officials in the Department of Finance at that time.

While I do not want to revisit it, I make the point that she is not the only one. Other people, whom I have come across in the course of my work as a public representative, now feel isolated and intimidated by the system for which they work. It is up to every Department, driven by the Department of the Taoiseach, to ensure they still feel at home in their work even after they have expressed a different view. It would speak volumes about the change in the culture, if that were to take place. It might help us in the future to understand problems where people employed by the system could have a say and not feel as if they were a lone voice or as if something might happen to them in terms of their job for saying something about it. It was suggested to the Taoiseach in the House that that person had done the State some service. We should be considering promotion rather than isolation in that context.

Page 21 refers to another committee, the Oireachtas Joint Committee on Investigations, Oversight and Petitions, and empowering it to the same level as the Committee of Public Accounts. As we look at governance and how it works, the Committee of Public Accounts has an essential part to play. Every Thursday we hear the shortcomings in Departments and the corrections they have made to ensure they will not happen again. However, we are still in business and people still come before us every Thursday. Huge change must be made in the context of how they conduct their business and ensure efficiencies and proper spending on behalf of the taxpayer are achieved. Therefore, in my opinion the extent of the powers and functions of the Committee of Public Accounts should continue to be examined with regard to the support staff and the functions and powers we have. Are further powers needed in the context of changing times? I draw this to the attention of the witnesses.

I want to ask about the ongoing discussion taking place at this committee, regardless of how the Administration is made up, on local government. It seems a nonsense that the Comptroller and Auditor General has a staff of approximately 140 while the body auditing local government has a staff of 40, although both bodies conduct more or less the same business. They should be combined and brought together. Efficiencies can be achieved in this area. We need to be able to chase the €5 billion allocated to local authorities every year but we cannot do so. Earlier, we discussed the question asked late last year about the €3.6 billion. Had the Comptroller and Auditor General powers of inspection across the board this question may not have arisen. It is a nonsense that this will continue. To me it smacks of a turf war between Departments when what the best for the State is to be gained if the bodies are amalgamated and move on.

It is shocking to come here every Thursday and not have replies from Departments on queries raised by members relative to their work as members of the Committee of Public Accounts. They are not local queries; they are queries about the workings of Departments. It takes so much effort to extract replies from some Departments. The Department of the Taoiseach, in conjunction with the other Departments, needs to put in place a protocol which makes it clear to Accounting Officers that correspondence they receive from the Committee of Public Accounts should be responded to within 30 days. They have the information.

Since late last year we have been awaiting responses from the Department of Finance on the €3.6 billion. We received a perfectly good response from the witnesses who had appeared previously and an explanation without the cost of any inquiry. They explained in detail how it happened and this is all we asked for. We are not trying to trick the Department. I am not here as a member of the Opposition attempting to trip up the Government. It is not my business. This is a completely different role. I and the other members want to work closely with the Departments. However, we get neither the respect nor the response we deserve as a committee when it comes to replies. It is not right that having raised a question late last year we are still waiting for the Government to respond in May. This morning, Mr. O'Hanlon had a response for us from his section. I am asking the Department in a constructive way to take on board these views. These views are not only mine; they have been expressed by members at various meetings and there is cross-party agreement on them.

Deputy Kieran O’Donnell

That is correct.

Chairman

This is for the taxpayer and in this light we should be considered as a resource for the Departments and the Government. If we are seen as such we will get on much better. Clarification is needed with regard to the response time and a change in policy. I know this is not an area we can question, but it is a question that should be put with regard to local government. It is a nonsense to have such duplication and that we cannot follow taxpayers money as we should. I state this in a constructive way and I believe I am reflecting the views of members of all political parties. Does Mr. McCarthy have anything to add?

Mr. Seamus McCarthy

I have nothing to add.

Chairman

Does the committee agree to note Vote 34 - Department of the Taoiseach? Agreed. I thank the witnesses for attending today's hearing.

The witnesses withdrew.

The committee adjourned at 1.35 p.m. until 10 a.m. on Thursday, 10 May 2012.