COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 2 Dec 2021

Business of Committee

Chairman

The public business before the committee this afternoon is minutes, accounts and financial statements, correspondence, work programme, and any other business. The committee will then go into private session before adjourning. The first item is the minutes of our meeting on 25 November, which have been circulated to members. Do members wish to raise any matters relating to the minutes? Are the minutes agreed? Agreed. As usual, the minutes will be published on the web page of the committee.

The next item is No. 2, accounts and financial statements. Five financial statements and accounts were laid before the Dáil between 22 and 26 November 2021. I ask the Comptroller and Auditor General to address these before I open the floor to members.

Mr. Seamus McCarthy

The first set of financial statements relates to the land bond winding-up account for 2020. It is a clear audit opinion. It is a very small account with a very low level of turnover.

The second is An Foras Teanga, the language body. It is a body that I audit jointly with my colleague in Northern Ireland. It is one of the cross-Border bodies. These are its 2019 financial statements. I draw the attention of the committee to the fact that they were signed on 29 April but are only now coming to the Oireachtas. The committee may wish to follow up in line with its policy in that regard. In any event, it was a clear audit opinion.

No. 3 is Institute of Technology Carlow for 2019-20. It is a clear audit opinion.

No. 4 is the local loans fund for 2020. It is a clear audit opinion. It is a very small account with a turnover in the year of €1,300. In fact, the loans outstanding at 31 December 2020 are nil, so, effectively, there should be no further transactions on that account.

The final one is the Digital Hub Development Agency financial statements for 2020. It is a clear audit opinion. I have drawn attention, for the second time, to an annual expenditure of €227,500 in respect of a vacant site levy charge levied by the local authority on the agency.

Chairman

What county is that in?

Mr. Seamus McCarthy

Could the Chair say that again?

Chairman

On the digital hub where that charge was levied, are we talking about a vacant site levy?

Mr. Seamus McCarthy

We are. That is correct.

Chairman

In Dublin?

Mr. Seamus McCarthy

In Dublin, in the Liberties.

Chairman

Is this the second year that the levy has been incurred?

Mr. Seamus McCarthy

I think it may go back three years. It may have been incurred in 2018, 2019 and 2020.

Chairman

Is the €227,500 the cumulative figure for the three years?

Mr. Seamus McCarthy

That is the full-year expenditure in 2020.

Chairman

We need to follow up on that. Do any other members wish to come in? No. As the Comptroller and Auditor General pointed out, there was a delay with the An Foras Teanga statements. As is the normal procedure, we will ask the committee secretariat to notify the Comptroller and Auditor General of our concerns regarding that. Can we agree to note the accounts and statements? Agreed. As usual, the listing of the accounts and financial statements will be published as part of our minutes.

Moving to correspondence, as previously agreed, items that were not flagged for discussion for this meeting will continue to be dealt with in the normal manner, in accordance with the proposed actions that have been circulated. Decisions taken by the committee in relation to correspondence are recorded in the minutes of the committee's meetings and published on the committee's web page.

Four items of correspondence have been flagged today in the category of correspondence from Accounting Officers and Ministers as a follow-up to previous meetings of this committee. The first is No. 900B from Mr. Séan Ó Foghlú, Secretary General of the Department of Education, dated 17 November 2021, providing information requested by the committee regarding the use of public funds by An Taisce. On foot of a proposal by Deputy Sean Sherlock, this is one of 11 responses to our requests for information in relation to the use of public funds by An Taisce. We have now received eight of the 11 responses. The eight responses account for €1.2 million, or 36% of the funding An Taisce received in 2019. Responses from the Department of Housing, Local Government and Heritage, the Department of Agriculture, Food and the Marine, and Fáilte Ireland are outstanding. They account for €2.18 million, or 64% of the funding. This item has been flagged by Deputy Matt Carthy. It is proposed that we note and publish the item and consider the responses together once we are in receipt of them all. Is Deputy Carthy online?

Mr. Seamus McCarthy

I do not think he is.

Chairman

Do any other members wish to speak on this item? No. It is proposed that we note and publish the item and consider the responses. The next item is No. 901B from Mr. Niall Cody, chairman of the Office of the Revenue Commissioners, dated 18 November 2021, providing information requested by the committee regarding the disclosure of details of a settlement between Revenue and Perrigo. At our meeting of 18 November, we considered a related response, R0873, from the Tax Appeals Commission. We discussed this matter with Revenue during today's engagement and that debate is on the public record. It is proposed that we note and publish this item. Is that agreed? Agreed. The item has was flagged by me and Deputy Catherine Murphy. I do not think Deputy Murphy is with us. We dealt with No. 901B earlier and we are no clearer on it because of the issue regarding Revenue and confidentiality. That is understandable. Time did not allow us to go any further into the issue earlier. The tax demand was for €1.636 billion. That was subsequently reduced following a number of interventions. The case came before a court. The final figure was that Perrigo is due to pay Revenue is €266 million. I propose to the committee that we write to Revenue Commissioners following today's meeting. We must recognise the fact that there has to be client confidentiality, but in the general scheme of things, the issue at stake here would appear to be whether it was treated as a capital transfer incurring a rate of tax of 33%, or one of 12.5%, as part of its normal trading profits. I suggest we write to Revenue and seek an answer to that question. Surely, it is a matter of how a company, and particularly, a very large one, is treated for tax, and specifically, whether it is paying the 33% or the 12.5%. If it is 12.5%, we should seek an explanation, because even at 12.5% the figure would be more than double what it came in, namely, €266 million. A tax rate of 12.5% would have given rise to a demand of possibly between €600 million and €700 million. If it is agreed by the committee, I will ask the clerk to follow up with that information from Revenue. While recognising the fact that it is bound by confidentiality around these matters, perhaps more light can be shed on that. Is that agreed? Agreed.

The next item is No. 903B from Mr. Derek Tierney, head of health infrastructure, Department of Health, dated 18 November 2021, and is a response to our request for information in relation to the analysis undertaken by the National Paediatric Hospital Development Board on the progress on the national children’s hospital. The progress report has been with the Department of Health for some time, and we have made a number of requests for sight of the report and information on the projected costs and completion date for the hospital. The Department's position remains that:

the Department and the Development Board have a responsibility to ensure the successful completion of this critical project and that any discussion of costs, however hypothetical or otherwise, at this time, would prejudice enforcement of the existing contract, and very likely negatively impact or jeopardise the Development Board in its ongoing engagement with the main contractor, and the Board's responsibilities for the timely completion of this critical project.

Our invitation to the Department of Health to our meeting on 16 December, which is two weeks from today, includes this matter as an agenda item. Also on the agenda for that meeting is the value for money review of the nursing homes support scheme, or fair deal scheme. As detailed in our January report on our examination of the Comptroller and Auditor General's special report on the scheme, the review was initiated by the Department of Health in March 2018 and was due for publication in March 2019. More than two and a half years later this item of correspondence states that a response on that matter will follow without specifying when. I do not think committee members will be happy with that. We recommended that the Department provide the committee with updates, but these have not been forthcoming. That is most disappointing. It is proposed that we note and publish the item. Is that agreed? Agreed. The item has been flagged by me and Deputy Catherine Murphy. Do any members want to speak on the item?

Deputy Imelda Munster

I flagged the item, too.

Chairman

Go ahead.

Deputy Imelda Munster

It is so frustrating. There are reports of the spiralling costs of the national children's hospital. Judging by this piece of correspondence, the Department is blatantly refusing to engage with the committee, citing commercial sensitivities and asserting that its focus is on completing the project. Optimistically, this hospital will not open until at least 2024.

Come that time, I fully expect the Department will tell us that it cannot comment because a legal case or negotiations are ongoing. This is a complete lack of engagement in a new development. It seems to serve no other purpose, and the Department wants to kick the can down the road thus avoiding any responsibility for, what I believe to be, gross incompetency. In the end, it will likely be measured in billions of taxpayers' money. Will the committee write to the Department, ahead of the hearing on 16 December, specifically asking it to outline the distinction between negotiations and commercial sensitivities that exist today versus the updated costs it previously provided to the committee?

Chairman

We can do that. There is concern in relation to that issue. This time last year, members will recall, we were trying to arrange for the Department and the hospital board to come in to discuss this. We delayed it and put it back to 9 February to facilitate this report on the children's hospital. I was actually at that site the other day. I am at a loss at this point as to how we are in a situation whereby the project is this far advanced without being able to ascertain the final costs. I do not expect them to pin that down to the nearest dollar because obviously there are tweaks taking place and different elements built in for construction inflation. How come the taxpayers, the Oireachtas, this committee and indeed the health committee, which has pursued this vigorously as well, cannot be given a figure for the estimated cost of this project when it is completed? We are left guessing. The media are left speculating, as are we. We are trying to pick up hints from what we are being told. As Chairperson, I find it totally disrespectful to be honest. I do not see why this figure is not available at this point. There is something seriously wrong if the Department cannot state the final cost of this project or when it will be completed. I support the Deputy's request that we send correspondence to the Secretary General of the Department prior to his appearance here in two weeks' time. That is agreed.

We should also ask about the value for money review of the nursing homes support scheme. It is incredible that a Department is in the situation whereby it does not have that report completed two and a half years later. The world outside moves on apace, but somehow or another, this report cannot be done in a two-and-a-half-year timeframe. We should ask, if the committee is agreeable, that the Department should complete that report and give us an update on it when it comes before the committee. At this point, Oireachtas Members, who are elected on behalf of the citizenry who pay the taxes that facilitate these schemes and everything else, need to know the answer to this. We will ask the secretariat to include in the correspondence that we are disappointed and that we feel it has dragged on unnecessarily for a long period of time. In any circumstances, it should have been completed by now. It should have been completed a long time ago. When Department officials come before us in two weeks' time, they should have those reports with them. That is agreed. Do any other members wish to come in?

Deputy Imelda Munster

You could use the word "disappointed" but you could also say that we are at a total loss as to how, two and a half years on, they have not finalised the report.

Chairman

It is important. It is a big scheme that runs in the region of €1 billion per annum. It is important that we get that report. If everyone is happy with that, we will ask the secretariat to follow up on that and we will have it flagged for when they come before us.

The next item of correspondence is No. 910B from Mr. Bernard Gloster, chief executive, Tusla, dated 22 November. It provides further information that was requested by the committee at our meeting with Tusla on 21 October. This is a comprehensive response to 22 requests for information arising from that meeting, including a number of supporting documents. As it was flagged by Deputy Catherine Murphy, who is not in attendance, I propose we hold it over until next week. Is that agreed? Agreed. I wish to note, in contrast to the previous item, this is a comprehensive report on all the issues we asked Tusla to come back to us on. We will move on now. That completes correspondence received.

Next is No. 4, our work programme. We have two public engagements remaining this year. Next Thursday, 9 December, we will engage with the Department of Social Protection in relation to the 2020 appropriation account for Vote 37 - Social Protection. Also on the agenda is the Social Insurance Fund and the Comptroller and Auditor General's 2020 report on the accounts of the public services, which covers chapter 9 - regularity of social welfare payments; chapter 10 - management of social welfare appeals; and chapter 11 - controls over the Covid-19 pandemic unemployment payment.

On 16 December, we will engage with the Department of Health, as stated earlier, regarding its 2020 appropriation account for Vote 38 – Health. The Department has been made aware that the committee wishes to discuss the two outstanding reports, namely the children’s hospital report, which was submitted to the Department of Health at the start of this year, and the value for money review of the nursing homes support scheme, which is often referred to as the fair deal scheme.

Last week we agreed our work programme for early in the new year. I thank the members for submitting their items on that. Our first engagement will be with RTÉ on 20 January, and the secretariat will work to schedule meetings with the National Transport Authority and Transport Infrastructure Ireland thereafter.

We will continue to revisit the work programme each week. Do members wish to raise any other matters on the work programme or are they happy that we have got it right this time? If anybody wants to flag an issue regarding those invited bodies, I ask that they do so as early as possible with the clerk to the committee and that they want answers on a specific issue. That concludes our consideration of the work programme.

The next item is any other business. Do members wish to raise any other matters? No.

We will now go into private session before adjourning until 9.30 a.m. on 9 December, when we will engage with the Department of Social Protection.

The committee went into private session at 2.28 p.m. and adjourned at 2.35 p.m. until 9.30 a.m. on Thursday, 9 December 2021.