I am pleased to return to the committee at this resumed session to answer any questions the members may have on the Appropriation Account for the Office of Public Works for 2010. If I may, I would like to comment briefly on the matters raised in my written response to the committee following my last appearance on 23 February.
In regard to the National Procurement Service, the Government has tasked the service with centralising and restructuring public sector procurement arrangements for common goods and services. The service now has 48 revised contracts in place with an estimated multi-annual value of €1.4 billion and has achieved estimated savings of €176 million since its establishment in 2009. The more integrated approach to procurement using tools such as aggregation and framework contracts means that many more contracts will be put in place in 2012 to facilitate further savings across all sectors. However, it is important to stress that the true benefits of these contracts can only be achieved by greater take-up of these contracts by public bodies.
One specific area the committee referred to is the retention of professional services. The NPS has commenced a process of determining the optimum procurement strategy to be deployed in this area for the public service and due to the level of expenditure specifically incurred on legal services the NPS has decided, in the first instance, to concentrate on this category and has established a working group to address the issues arising. It is hoped the working group deliberations will allow the NPS to go to the market for the supply of legal services for a selection of public service bodies in the third quarter of this year.
On the matter of payments for overtime and allowances, raised at the last meeting, these payments primarily arise as a result of the front-line nature of many aspects of the work of the OPW. Many of the payments and allowances are in the nature of pay for industrial employees with less than 8% of all overtime and allowances relating to administrative, professional and technical staff. The service nature of OPW business, particularly on the heritage and engineering sides, means that staffing attendance is critical outside of normal business hours, particularly during the summer months when supplementary staff are also employed to ensure maximum access to the public at visitor sites and an appropriate response to maintenance and emergency requirements in the flooding area.
In many cases these pay agreements and allowances are centrally controlled and, as the committee will be aware, there is a review already underway of such allowances and premium payments by the Department of Public Expenditure and Reform. As regards the issue of car parking, details have already been provided to the committee on car park spaces held by the OPW on behalf of Government. The ongoing policy of the OPW is to monitor the requirements for all car park spaces and where possible surrender those deemed to be surplus to Government requirements. Since 2008, the OPW has disposed of 1,281 leased car parking spaces, primarily in the Dublin area. As requested by the committee, I have provided members with a table which summarises the current property status of all the decentralisation projects - it includes both OPW managed projects and those not managed by the OPW. The information includes details of the 12 sites which were acquired but have not been developed.
Specifically in regard to the purchase of these sites, many were acquired at a time of rising property prices, which peaked during 2006 and 2007. The OPW is not immune to market forces. We operate in the same property market as everyone else - we are subject to the same highs and lows and were further restricted to sourcing sites in the published locations. However, we did take advantage of the market at the time in the disposal of a number of Dublin properties. In tandem with the procurement of sites and buildings, the disposal programme in Dublin netted over €356 million for the Exchequer, while leases with an annual value of €18 million have been surrendered in the Dublin area in recent years. The office continues to rationalise leased office space, particularly in Dublin, in order to drive down rental expenditure with the achievement of considerable savings on the State rental bill year on year since 2009.
Now that Government has made final decisions to cancel some projects, on foot of the 2011 review of the programme, OPW is examining all aspects of the 12 sites purchased which have not been developed as Government offices. The OPW will manage the sites as an integral part of the overall portfolio in its care.
In the current market, with little or no transactions or evidence of willing buyers, we know that values have fallen significantly but in order to assess all options and to inform decision making, an independent current valuation of these sites has been commissioned. As I have stated in my written response, I do not anticipate that a large-scale disposal programme of surplus State-owned properties will prove to be the optimal solution. Rather than sell surplus property at a considerable loss, sites may be held until the economy and the property market picks up with alternative solutions being considered in the interim.
I wish to remind the committee that the OPW's role in the decentralisation programme was to procure accommodation at the locations agreed by Government decision. The OPW did not have any role in arranging for the transfer of staff or functions to the Government's nominated locations, other than to the OPW's own headquarters in Trim where approximately 280 staff are now based and our offices in Claremorris where a further 30 staff are located.
As requested, I have provided details of upward-only rent reviews in my response of 28 March. However, I would like to inform the committee that the OPW, on behalf of the State, continues to actively renegotiate the terms of all leases and of the list provided, it has negotiated a rent reduction in the case of nine leases, surrendered one other lease and targeted seven others for surrender later this year.
The accommodation at Phoenix House, which was raised specifically by Deputy McDonald at the previous meeting, has proved to be unsuitable for the client that was proposed to occupy the building. An alternative client is currently considering a move to this office space.
I thank the committee for its attention. I will be glad to answer any further questions it may wish to raise on the 2010 accounts.