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Dáil Éireann debate -
Wednesday, 11 Feb 1925

Vol. 10 No. 2

LOCAL AUTHORITIES (COMBINED PURCHASING) BILL, 1925.—SECOND STAGE.

Owing to the absence of the Minister for Local Government and Public Health, who is unfortunately ill, I move the Second Reading of this Bill. It seeks to place on a statutory basis an institution which was brought into existence for the first time towards the end of 1921, and which has since been functioning under some little difficulty. In the Second Dáil I was able to explain what an improvement had been effected in prices by reason of combined purchasing. I think some Deputies are aware of the fact that since this Department came into existence a number of articles not formerly produced in the Saorstát have been manufactured in it. One of the difficulties that beset this department in the beginning was the extraordinary diversity in the number of articles of much the same kind used in the various institutions in the country.

To those who have had some experience of what may be called local politics within the last twenty years one particular claim was made, that standard articles should be adopted for use in the various institutions. After some conferences with local authorities a list of standard articles was drawn up, and in consequence it will be conceded that the prices of these standard articles, by reason of being able to buy in bulk, would be fairly considerably reduced. Very considerable reductions in prices have taken place as a result of combined purchasing. As I said already, a number of articles that were not formerly manufactured in the Saorstát are now being manufactured in it, and a trade for some of these articles has also been opened up in other directions. Local authorities purchased a certain quantity of these articles and that has enabled the manufacturers to place goods in markets which otherwise might never have been thought of.

In addition to the standardising of particular articles for institutions, there has been a considerable reduction in prices of goods which came from outside the Saorstát. In one particular case the price list was furnished and the customary method of tendering was to give a percentage off the published price. When I was Minister for Local Government I remember seeing the various percentages which, on the average, amounted to 17 per cent. off the list price. The Trade Section of the Local Government Board increased the percentages from 17 per cent. to 25 per cent. generally over the country, and in the case of Dublin and Cork it was 28 per cent. of a reduction off the list price. Articles which had formerly been purchased by local authorities were of an inferior quality and I am quite sure some of the articles purchased by the Department will probably suffer from the same charge, but they can be corrected. There have been cases in which articles were not up to the standard, but through the co-operation of local authorities that can certainly be corrected. I can understand that, given a number of articles purchased by local authorities, separately and independently, they would suffer perhaps from the very same fault. That fault was not usually discovered with the same alacrity or industry as the faults alleged in the case of the Trade Department. In other words, there is no interest in preserving the integrity of the Trade Department, as it is there for analysis and criticism. Any one who has experience of local authorities knows quite well that there are many reasons why no such allegations and no such analysis are made in the case of purchases made by themselves.

In addition to the work this particular section has done for Local Government, it has also been brought into play for some of the Government services and, as a set-off, satisfactory prices were obtained whenever their services were requisitioned.

It was put to me when I was through the country recently that there is a discrimination in favour of Dublin by this Department. I have examined the list of places where contracts have been placed.

The President was recently in Cork.

Cork, as a matter of fact, is the first place mentioned on this list and the others are:—Wexford, Ferns, Shillelagh, Clonmel, Tullamore, Mountrath, Athy, Wicklow, Belleek, Carlow, Castlerea, Drogheda, Balbriggan, Athlone, Ennis, Kilkenny, Navan, Limerick, Foxford, Edenderry, Sixmilebridge, Killarney, Castlecomer, Wolfhill, Carrickmacross, Bantry, Convoy, Arigna, Blarney, Dripsey, Dungloe, Templecrone. The list has apparently been compiled utterly regardless of the fact that elections are pending in other places.

What is that list?

It is a list of places where contracts have been placed outside Dublin. The charge has been made that this system is for the advantage of Dublin, and I am meeting that argument by citing places where contractors live who have succeeded in getting contracts from this Department. This particular section of Local Government is not a statutory section and, in consequence, there are some difficulties in connection with the law which compel a local authority to advertise for goods. That is settled by one of the sections in the Bill which enables them to satisfy the requirements by purchasing through the State Department.

I oppose this Bill because it seems to me that it is another declaration by the Ministry that the people are incapable of managing their own local affairs. The President has told us about the amount of money that has been saved by this combined purchasing, and he referred, in passing, to the fact that there have been complaints that the goods supplied were not up to the standard. There were complaints undoubtedly and there were very good grounds for them. It is quite easy to save money by getting inferior stuff supplied. There were commodities supplied under this system which had to be returned by the public bodies concerned, because they were practically useless. I came across one instance lately where a lot of tar for roads had been supplied under this system. When the county council concerned started to put this tar on the roads, they found the stuff was so bad that they had to send their men to scrape it off the roads again. I could give other instances of where county council vans, which were supplied, were found to be not at all as good as those previously got when the county council were purchasing them themselves.

The same complaints have been made with regard to the supply of food, but my real objection to this Bill is that it gives the Minister new powers and takes away from the local authorities the powers they have already. It asks us to assume that the Minister and his officials know all about Local Government administration, know all about local conditions and requirements and that they will be the best judges as to the quality of the different commodities. Under Section 3 the Minister is empowered to apply for official contractors and to appoint from the list of applicants any persons he may choose without any regard to whether they are going to supply the best commodities at the lowest prices or not.

I think that there is no call for this Bill at the moment. I do not believe it is going to be a success, and I believe it will do a lot of injury to many small industries throughout the country and cause greater unemployment. It may be a good Bill from the point of view of helping certain industries in Dublin and Cork; notwithstanding the list of places the President has read out in which contracts have been placed, we know well that when a contractor is asked to tender for a certain commodity for perhaps every public body in the twenty-six counties, the small manufacturer or the small merchant will have very little chance against the merchants of the cities of Cork and Dublin, who will be able to send out and sell at a much lower price a commodity not, perhaps, as good. We may have some gentleman here in Dublin importing potatoes from the north of Ireland and sending them down to Cork to be consumed in a county home.

One section in the Bill to which the Minister did not refer was that which states that the Minister may appoint his officials and that the Minister's expenses as well as those of his officials are to be paid by the local bodies whether they purchase or not. We have often heard of the principle of taxation without representation. I think we have it here, and further we have the principle of taxation without control of expenditure. I think myself that the Bill is a bad one. Certainly most of the sections, particularly 3, 6, and 8 are bad. I do not believe that the Bill will do any real good or that it is in the interests of real economy, or of the poor people in the county homes or hospitals throughout the country.

I agree with Deputy Morrissey. I do not think this Bill is going to be a success. You are delegating the powers of the public bodies to a public contractor. He might not be from the particular district at all. In a particular district where these institutions exist farmers believe that they have the first claim on the supply of vegetables and butter and articles of that kind. If the institutions are to have such satisfactory results as were anticipated, in connection with the changes in local government, I think the bodies administering them should be trusted for a little while, at least. I am told that there is butter supplied at 1/3 and 1/4 per lb., while the butter buyers are paying 1/6 per lb. That is an economy, no doubt, but there is somebody going to suffer. The poor in the institutions or the soldiers will suffer. I do not agree with the principle of the Bill at all. I do not believe it will tend to economy and, even if it does, there is somebody going to suffer for the economy. On these grounds, I oppose the Bill.

I would like to support the principle of this Bill. I have some recollection of the genesis of this trade department, and I have some recollection of the ideas which underlay and the motives which prompted the change. Substantially, they amounted to this: that in a time of considerable financial stringency for local authorities, by reason of very substantial losses in grants, arising out of the action of the Local Government Board, it was necessary to explore every possibility of economy. It was found that institutions in the various county towns were ordering the same supplies in small quantities and paying very high prices for them. The consideration emerged very definitely that if, by pooling orders of that kind and by being in a position to place orders for large quantities, money could be saved for the local authorities and for the ratepayers, that would be a step well worth taking. That was, at any rate, the root and genesis of this departure, that goods of the same or even better quality could be secured on better terms by reason of larger orders being placed. What is at present known as the Trade Branch of the Local Government Department developed out of that situation.

There is just one further consideration. It is one which the President touched on briefly in moving the Bill, that nascent industries in this country can be fostered, and even enterprising persons may be encouraged to embark upon new industries, if there is a possibility of securing, over a period, contracts of this kind for the supply of goods of one kind or another to the local institutions. In the pre-Treaty days, that aspect of things was considered by the political organisations of the time—Sinn Fein and other bodies—and it was certainly appreciated that if the local authorities of the country, through some body acting for all, were in a position to pool their contracts and place large orders, much might be done towards fostering nascent industries and even developing new ones. The claim is urged against this Bill that the quality of the goods is not the same as when they were being bought through persons here and there in the various county towns, and generally that it is a bad Bill, that it is sure to hurt somebody and that it is not going to do any good to anyone. I wonder if that is the considered opinion of any Deputy. I wonder if that is the considered opinion of any ratepayers——

I did not suggest, and nobody suggested, that the Bill was not going to do any good to anybody.

I rather gathered that from the Deputy's remarks. I understood him to say that it was a thoroughly bad Bill, with nothing to commend it to the Dáil, and that it was not in the best interests of the people of the country that it should pass. I want to examine that, if the Deputy will allow me. I wonder if, apart from vested interests, any thoughtful body of ratepayers through the country examining this Bill and the considerations underlying it, would agree with Deputy Morrissey that this is the kind of Bill which the Dáil should reject ignominiously. The test question, I imagine, for them would be whether the Bill is going to save them money, whether it is going to enable the rates to be reduced, whether it is going to mean the same service, or better service, at lower cost. If it is, I think, in a plain, blunt kind of way, without any undue subtlety, they would say they would like the members of the Dáil to pass this Bill.

I would be prepared to admit that in connection with this Bill, as in connection with many other matters, you have an opportunity of favouring the individual at the expense of the general public or of favouring the general public at the expense of the individual. You have got to choose. It is always easier, and nearly always pleasanter, to respond to the appeal of the individual, to do him the favour, because you are only, after all, bludgeoning the general public, and the general public sometimes does not know it is being bludgeoned and very seldom hits back; whereas the individual will be ever so grateful for the favour you do him at the expense of the general public. You can continue the old system by which you divide up the purchases and dissipate them through various towns amongst various retailers, and the big unthinking public, the big mass of the ratepayers, will continue to pay high prices where they might pay low ones for the same or better quality of goods. That is, apparently, what Deputy Morrissey and Deputy Daly would wish. On the other hand, you can, through a system of joint purchasing, a system of pooling contracts under the supervision of the Department, ensure better value to the ratepayers of the country and enable a sadly-needed reduction of rates to be effected.

As in so many other matters, you can scarcely take a step of this kind without walking on someone's corns, and Deputies have to choose between walking on the corns of the few or continuing to trample on the corns of the many, by needlessly flinging away the people's money. There will be nothing new urged against this Bill. There will be nothing urged that was not urged away back when we made this departure first. "It is going to mean that so-and-so, in such a town, will not make as much as he used to make." Perhaps it is. But it will mean that a great many "so-and-so's" in such a county will not pay as much as they used to pay.

That can be proved to be beyond question, and the Deputy knows that.

He does not. The commodities might not be as good as they were.

I think cases can be cited and will be cited to the Deputy which will raise that particular question beyond the plane of controversy. What the Deputy really has suggested is that "John so-and-so" in such a town should continue to reap his profit, rather than that the bulk of the ratepayers of the particular area should have an economy effected in their favour.

What I suggested was that the people should be allowed to do their own business and not have it done by officials whom they will have to pay. That is quite a different suggestion altogether.

We suggest that the people, through their representatives here, should do their business, and do it much more sanely and more wisely than it was done in the past. The Bill is before Deputies for their consideration. That is not denied, I take it. We are urging certain facts in its favour for the consideration of Deputies, and we put it to Deputies that they can do a benefit to the masses of the people at some possible loss and expense to individuals, or they can continue to benefit individuals at great loss to the general community. That is the real issue, and the Deputy knows that that is the real issue.

There is a list here showing reductions that were effected in the cases of specific goods by the system of pooling the orders and buying in bulk, for subsequent distribution to the institutions. We have here a list showing the reductions in about fifteen or twenty cases. Check for aprons was 2/1½ per yard, and the price through the trade branch was 1/2. Calico (blay) was 1/3½ per yard, and through the trade branch the price was 9d. Fine flannel was 2/6 per yard, and purchased through the trade branch it was 1/8. I could go down through a long list of articles, showing substantial reductions of that kind. There will always be the cry of the individual who is hit by some change or some departure from the old way. There will be the individual conservatism of vested interests, for which Deputy Morrissey speaks, and because it is natural, and because it is human nature, there is not any use in protesting against it. It has always come when any change was proposed, and it will always come when any change is proposed. The person who is affected by the change will protest, and it so happens that the people who will benefit by the change are so little aware of it that they do not even rally in its favour, are not enthusiastic for it, and only appreciate it subsequently in its effects, without thinking as to how it was brought about.

The real opinion of the Minister is that the people know nothing, that the Ministry know all, and that they will do all the work for them.

Up to a point, the Deputy will agree that it is our business to do their work for them. It is our business to consult the general interests of the community and to favour the general interests of the community, even when they conflict with the particular interest of individuals. It is in that capacity of stewardship for the general public that we bring forward measures of this kind that are for the good of the general public. We recognise that it does happen occasionally that a measure brought forward for the good of the general public will not be particularly welcome to individuals. It is not claimed for this Bill that it is one that will be of great benefit to all the people. It will be of great benefit to the vast majority of the people and, unfortunately, for the sake of that benefit, individuals will have to sacritice something that accrued to them in the past. The Deputy can make his choice. He seems, in fact, to have already made it. He stands for the continuance of the individual's benefit at the expense of the general public. We stand in the other lobby, so to speak—for the good of the general public, even when some loss and sacrifice is involved to the individual.

The Minister who has just sat down, and the President, advocated the Second Reading of this Bill because the principle of it, as they alleged, is centralised purchasing. That is not the principle of the Bill. They have adduced certain figures to show the value of centralised purchasing. But centralised purchasing is not the purpose of this Bill. Centralised purchasing is at present in operation. I am one of those who believe that in certain cases centralised purchasing would be an economy and would be very valuable for the development of the country. But that system is at present in operation and does not require a Bill of this kind. The principle of this Bill is not to empower local authorities to purchase co-operatively or centrally or collectively, but to put into the hands of the Minister and his officials power to insist that local authorities shall buy certain things of a certain quality from certain people. The proposition in the Bill is to impose upon the local authority the duty of buying certain things from certain people, which an official of the Department says they should buy. That is a principle that we do not approve of—not the principle that there should be centralised purchasing. The object of this Bill is not, as one would imagine from reading Section 2, to enable local authorities to obtain, by centralised purchasing, certain things. If that were the purpose of the Bill I should be quite in favour of it. But that is not the purpose. The purpose is to place in the hands of the Minister power to appoint contractors, to place in the hands of his officials power to inspect, and to place in the hands of his auditors powers to impose penalties upon local authorities which do not conform to what these officials think is the duty of the local authority in all matters of purchasing.

That is the principle that you are asked to support. The Minister has again suggested that it is the business of the Dáil to do the work of the people in the country, denying implicitly that the people who are elected to look after local affairs are capable of purchasing commodities, choosing qualities, or entering into contracts for items which, in any degree, depart from the standard set up by the central authority. One would imagine, from what the Minister for Justice suggested, that none of us ever heard of faults arising from centralised purchasing; that none of us ever heard of failure to satisfy the best interests of the community through a system of centralised purchasing or that there had been suggestions of personal aggrandisement through the same system. He spoke to us as though central purchasing was the only thing possible for the purpose of safeguarding the public.

If this were a Bill merely intended to legalise existing conditions, making it easier for local authorities to use the Trade Department and enter into formal contracts with that Department, that would be one thing and I would support it. The proposition, however, is to place in the hands of the Ministry a certain rigid and absolute power to insist on the local authorities doing what the Minister intends they shall do in the matter of purchasing. The intention is to prevent members of local authorities exercising their own discretion. Sub-section (3) of Section 6 practically tells local representatives that they must not go outside the official contractor for the standardised article set up according to the wisdom of the official in the Minister's Department. They could only go outside of that standard under pain of surcharge. It would be essential for the local authority to prove to the auditor that it was acting bona fide in going outside the official standard. If the auditor in the future continues as in the past to act more or less on the suggestion of the Minister in indicating that such and such a policy should be followed, every representative on a local authority will be afraid to go outside the Minister's prescribed list of contractors and list of articles.

I think Deputy Johnson would not like to do an injustice to anybody. I have always noticed that he is particularly anxious to avoid doing injustice to anybody. I know the officers in the Local Government Department, and I know the nature of the work they carry out. I am aware that at no time have they discussed with the Minister what his policy was in regard to surcharges. I think it is only right that I should make that statement. The auditor has a particular responsibility which he cannot share with the Minister.

I am not suggesting for a moment that the Minister discusses surcharges with the auditor; but I do suggest that as the auditor is an officer in the Minister's department, removable by the Minister, and an officer for whom the Minister has responsibility, he inevitably takes his cue from the Minister's general outline of policy as stated in the Dáil.

I would like to correct that impression. I have had some experience of Local Government auditors, even at a time when we had no respect at all for the Custom House as the headquarters of the Local Government Department. They had there a very definite line. Very often the Minister or the Chief Secretary at the time would have liked to have influenced the auditor, but they could not, dare not, and did not.

The Minister has his own opinion on that matter, and I have mine. I say that an official of a department, not an accounting auditor, but practically a detective auditor, who is not in an independent position such as the Auditor-General, but is merely a departmental official responsible to the Minister, is inevitably influenced by the policy of the Ministerial Department.

I can only disagree with that.

If matters were as the Minister suggests, things are possibly worse, because the auditor will have even more authority. He need not know anything about the standard of quality, about the conditions of purchase or manufacture, or, indeed, anything at all. All he need do is to refuse to satisfy himself that the local authority is acting bona fide in making a certain purchase. Then he can surcharge.

I do not like to be intervening too often, but this is rather an important matter. I take it Deputy Johnson does not wish to do anything unfair in this matter. There is one thing the auditor would be bound to do. He would be bound in certain cases to surcharge. For instance, in a case where a contract was entered into, the contractor undertaking to supply goods at a particular price on the understanding that he was getting an order for a certain quantity of goods. any reduction of that quantity must necessarily alter his price. Suppose he tendered to supply 50,000 yards of a particular material at 5/-, and if the quantity was reduced by half, the price would be consequently affected by that difference. The contractor must be protected in that case, and the auditor's action in protecting him would not be influenced by the Minister's policy.

I would direct the President's attention to sub-sections (1) and (3). The Auditor is to be the judge in all respects. If the authorities, for instance, thought it desirable to supply milk containing three per cent. of butter fat to the inmates of a hospital, and the auditor thought that they could have got the milk at a halfpenny a quart cheaper, with two and a half per cent. of butter fat, then the auditor could, subject only to a decision of the Minister on appeal, surcharge the local authority for their contract.

Off-hand I would say that would be a case for the immediate dismissal of the auditor.

Quite so; but supposing the Minister approved, and supposing the auditor was in fact following out, as I suggest, the inspired message of the Minister, then the Minister is certainly going to approve. I submit that the position you would be placing the auditor in may not be very much stronger, but, in connection with this particular power in respect to contracts, it is a position which will largely make the local authority an absolute nonentity. Under the Local Government Bill you are centralising authority, in many respects, in the Minister and his officials. Here we are doing the same in another form in respect to purchases by a local authority. You are going to have a list of contractors, and the local authority must purchase anything they require from one or other of those contractors.

I protest against the continuance of this method of centralising authority in respect to purely local affairs in the Minister or his officials in Merrion Street. Give powers to local authorities to combine for central purchasing by all means, but in this measure you do not give them such power. You take the power out of their hands. You remove from the local authority all responsibility and you are giving absolute control to a central authority in a manner absolutely contrary to the whole trend of modern legislation. You are taking the responsibility from the people and centralising it in the Minister or his officials. To a greater degree than before you will be centralising in a few wholesalers the power to combine for purchase and distribution, which will, I believe, act detrimentally in many cases, not merely on the local contractors, but on the people actually concerned in the consumption of the articles purchased.

Every member of the Dáil has, I suppose, sympathised at some time or other with the protest against new methods of marketing commodities of common consumption. We get articles made up in Chicago and sent to our doors in boxes. A generation ago those same things were grown within a few miles from our own houses and were sent to our doors perhaps in a different way, but possibly in a more wholesome form. This idea of over-centralisation is being emphasised in the Bill. You are not allowing fair play to local competition when you put in a centralised authority. You are going to destroy rather than increase local development, and you are doing that by imposing on the local authority a certain duty to follow the behest of the Minister. Give the local authorities a chance of combining and enable them to obtain jointly such supplies as they may require. Do not impose on them the necessity of going through the doors of Merrion Street, leaving all responsibility on the Minister; that responsibility is a very attenuated one so far as the local people are concerned. It is not a good thing to throw responsibility for local administration upon a centralised authority only responsible to a legislative body such as the Dail.

AN LEAS CHEANN-COMHAIRLE

took the Chair.

One would think from some of the speeches delivered in connection with this Bill that this was entirely a new matter. The substance of this Bill is not a new matter. It has, practically speaking, been in force for two or three years. This collective buying by a central authority here in Dublin has been operating for two years to my own knowledge in a good many local bodies. I happen to be a member of a local body and when the contracts are taken quarterly or half-yearly they are advertised in the ordinary way. Tenders have been put in, and by the side of these tenders, we have a list from the central authority.

That is different from this Bill.

No, it is not.

Read the Bill.

I have read the Bill, and except I am to assume that neither the Minister for Local Government nor the Dáil is responsible to the public, and that the Minister is not responsible to the Dáil, I cannot follow Deputy Johnson's reasoning.

Has the Deputy read the section which says that the local authority need not any longer advertise for tenders?

I have not read that, but I have read Section 6.

If I might interrupt the Deputy for a moment, I would say I was not aware until 2 o'clock today that I would have to move this Bill instead of its being moved by the Minister for Local Government, and it was during the interval that I was able to make up the case. I have explained that Section 6 has reference to the disability under which certain, if not all, local authorities labour in respect of accepting contracts entered into by the Trade Department of the Local Government Department. The Trade Department makes a contract at a certain price. The local authority, as things stand, should advertise for any contract over £100. This particular section enables them to dispense with the advertisement, which is no longer necessary.

They need not ask for tenders.

I was not dealing with any particular section. I was dealing with the principle of the Bill. I hold the view that any part of this Bill can be altered in Committee. When we come to deal with the sections afterwards, it will be a different matter. I, as a member of a local authority, have found very great assistance from this official list that was sent us by the Trade Department. There is no doubt that thousands of pounds have been saved in a half-year's working of local bodies because of the facilities afforded through this central buying. There is not anybody here, even Deputy Morrissey or Deputy Johnson, if he knows anything about it, but is aware of local rings that have crept into districts. There is the milk ring and the meat ring and rings of every description where they divide the profits and put in a certain fabulous, ridiculous price and get it because there is no competition. It is a very good thing, as the Minister for Justice said, for the individual, but a very bad thing for the public. Some machinery should be found to deal with that sort of thing, and this machinery of central buying is an immense help in dealing with anything like rings. I admit that the intention of the Bill is right. I am prepared to admit that it is necessary, and anybody who has been a member of a local authority and who wants to be honest on the question must admit that I also know that in some particular instances, in items for the half-year's supplies, if local authorities had not the option of considering other tenders than the local tenders, there would be a loss. Some of the prices, and some of the samples sent down by the central authority can be beaten by local prices in the district.

I want, when this Bill goes into Committee, to preserve the right of the local authority where they can show a good cause that where they are able to take contracts lower than those of the central authority, they will be at liberty to do so. I want that right preserved. It has been the custom for the last few years that the Local Government Inspector was present, and he must be always present in the matter of tenders—and if he objects to a particular article being accepted it is for the local committee to show cause why they should accept it. I do not see where the case can lie at all that the auditor can come in except in a glaring case of the misapplication of public money. In my opinion this Bill is a necessary Bill. I can understand how the matter will work out. I have been a member of a local authority for perhaps twenty-five years now. I have known of a meat ring and milk ring, and rings in almost everything that was supplied locally. The public was fleeced for the benefit of a few individuals. It is pretty nearly time that some machinery was devised to get behind these smart local people. But in connection with this matter I do not anticipate any instance in which the Local Government Minister or his auditor can do anything glaringly wrong. The Minister for Local Government here is an Extern Minister. He is responsible to the Dáil for his conduct. He is also responsible for the conduct of his auditors, and, if the Minister or his auditor is doing anything wrong it is perfectly open to the Dáil to bring up the matter here, and to thrash it out. I, more or less, welcome the Bill, and I hope that the few more or less objectionable provisions in it will be amended or erased when the Bill is in Committee.

Might I ask whether, under this Bill, contracts will be entered into yearly, half-yearly, or quarterly, or whether the local authorities, if they can buy better in outside markets, will have an opportunity of doing so with the concurrence of the Local Government Department? I will put a case in point. During last year my attention was drawn to the question of a contract for seasonable goods —say eggs. At certain times of the year eggs are scarce, and the contract was entered into. Owing to some mistake and the failure to advertise, the contract was continued two months beyond the time and well into the season at which eggs could have been purchased much more cheaply.

I want to know if there is any protection in the Bill, or if the Minister will take steps to see that a contract will not be entered into at a certain period of the year when articles are searce and that that contract will be allowed to go into a period of the year when these articles are plentiful and cheap. I know the incident that I mentioned occurred last year, and while not opposed to the Bill in any way I would be glad if the Minister would take a note of that and see that by no mistake, or flaw, or oversight in the Bill such a thing would occur again. It is quite possible that if a contractor gets a contract he may, in one month out of the six, make a huge profit. Had the competing contractors known that the contract would have extended into that month they would have put in a tender at a lesser figure. I mention that because my attention was drawn to it last year on the matter of the supply of eggs and butter to a certain department. The contractor managed to hold the contract during the cheaper period at the price of the dearer period. If, in any circumstances, that is likely to occur again, I hope the Minister will see that there is nothing in the Bill that will allow it to happen.

If the Deputy puts down an amendment relating to that point I will undertake to have the Minister's attention drawn to it.

I feel that there is no necessity on behalf of my colleagues and myself to say that we are as anxious as Deputy Gorey to break up local rings. But there is a worse thing to be encountered in public life than local rings, and what we want to guard against is to prevent the Minister from making a national ring against the best interests of the councils and the local people who have to pay the rates.

I have been a member of a public body or two as has Deputy Gorey, and I have had some experience of the working of this Trade Department. Invariably I have found that the prices submitted to us by this Trade Department, that has been functioning for the past two or three years, could not at all compare with the prices submitted to us by local contractors. In some cases it was an advantage to a public board to get into touch with that particular section of the Local Government Department in order to get certain commodities. But I might say that in eight out of ten cases we found it to our advantage to deal locally.

I would also like to complain about the delay which we practically always encountered in dealing with this Department and I will cite one case. At the beginning of last year the Wexford County Council entered tentatively, at any rate, into a contract with a firm to supply them with engines, steam rollers, stone breakers, etc., and they wanted to have them ready by April so as to do the work on the roads. The particular firm that they were in negotiation with agreed to supply the machinery that was wanted by April. The Local Government Department or the Trade Section of it came along and objected to the Wexford County Council entering into any particular contract with the particular firm for engines or stone breakers, though their engines and breakers were equally as good as the ones they agreed to take. The Local Government Trade Department entered into a contract with the particular firm that they had in their list, and the result was that the machinery was held up and was not delivered to the Wexford County Council until October with the consequences that the roads in Wexford are in a bad condition on account of that machinery being held up. That is not a desirable state of affairs. If this Bill is going to be passed in an amended form or otherwise, I think we ought not to have a state of affairs like that prevailing. Another matter which I think should be dealt with is, that a section should be inserted, or a regulation made to ensure that firms accepted as contractors to local authorities should pay fair wages to their employees.

Who is going to be the judge of a fair wage?

I presume a committee could be set up representative of everybody concerned. I would not like to have you as a judge.

Neither would the public like to have you as a judge.

Perhaps not. As far as printing is concerned, I am wondering if contracts would be made with the Trades Section of the Local Government Department the same as for other commodities. I do know, so far as printing is concerned, that there is a fair wages clause insisted upon and agreed to by the Local Government Department in connection with tenders accepted for printing by public bodies. It is absolutely necessary that we should have that, because the interests of one town might be worked against those of another town or city, and a certain town or city might suffer. The principle of the Bill, or what the Minister has in his mind, I dare say would be acceptable to practically every Deputy. But, as Deputy Johnson says, the present draft of the Bill does not carry out what we believe the Minister intends, and what we are satisfied should be done. We are as anxious as Deputy Gorey to remove the local rings, but we are not anxious that the Minister should be permitted to establish a national ring in place of local rings.

It seems to me that Deputy Johnson greatly exaggerated the effect of Section 6. It will probably be desirable in future, as it was in the past, that a local authority in a particular case should purchase from some local contractor, rather than from the official contractor. They have full power under the Bill to do so. They are exempted from the necessity for advertising for contracts that they have hitherto been obliged to advertise for, but they are not prohibited from advertising for tenders if they feel that the prices on the official list are not as good as, or are no better than, prices they could obtain from some other contractor by advertising. If the tenders which they receive seem to them tenders which could be accepted with advantage to the ratepayers, rather than having supplies procured from the official contractor, they can enter into a contract with the people who sent in tenders. The only thing is that they must be prepared to justify their action, and that seems to be a fair and reasonable condition.

If the full advantage is to be got out of central purchasing, then, as the President has indicated, it is desirable that the largest possible orders should be given to the official contractor so that the best prices may be got from him. The object of the scheme will be defeated if there is any unnecessary giving of contracts to people other than the official contractor. But, in case some advantage can be got, or even if no loss will occur to the rates through going to another contractor, then there is no danger of a surcharge to the members of the local authority, and they can quite safely enter into another contract.

I do not know whether any amendment by way of loosening Section 6 could be shown to be necessary. As far as I have heard the discussion, I do not think a case has been made that Section 6 tightens the law unduly. As the Bill stands, if at any time a supply of a particular commodity is wanted by the local authority, and they think they can get it from anybody else cheaper than from the official contractor, they can advertise in the usual way. If a tender comes in which shows a price below that of the official contractor they can enter into a contract and get the goods in that way.

Or equal to?

Or equal to.

Or a better article, or more prompt delivery?

The provisions of the Bill seem to me to meet all the circumstances that might arise. If it can be shown in a particular case that they do not, then an amendment could be proposed.

On a point of personal explanation as to the case I stated, may I say that the President asked me did it apply to the Local Government Department. I did not quite catch the President's question. The case did not refer to the Local Government Department. It was an army contract case. I desire to make that clear now.

I would like to correct the Deputy on that point. If my recollection is correct, what happened was that the contracts were running for four months. I suggested that they should run for six months. Two months are still to run. I said we were prepared to extend the contract from four to six months, conditional upon getting certain reductions. The Deputy may not have heard of the reductions, but I believe reductions were got. If the Deputy were to ask me in what particular items, I could not say, but I believe eggs were one of the items.

Nothing to do with the elections?

The principle underlying this Bill, as set out in Section 2, is one that should have the support of every Deputy. One of our real grievances against the Government is the heavy burthen of taxes imposed on the taxpayers. But there are other bodies that run the Government very closely in burthening the unfortunate ratepayers—the different local authorities. Anything that would tend to relieve the ratepayers ought to have the support of Deputies. For that reason I hope that Deputies will unanimously support the principle underlying this Bill, notwithstanding anything that Deputies Morrissey and Johnson have said.

Tell us what the principle is.

The principle, as I have said, is set out in Section 2, which I will read for the Deputy:—

"It shall be the duty of the Minister to take all such steps as may be desirable to enable local authorities to obtain jointly from one or more suitable contractors such supplies of any commodity as may be required by them in the performance of their duties."

It is obvious that local bodies have to purchase commodities from contractors. These commodities can be purchased in bulk on behalf of local authorities from one or more contractors. There can be no doubt of that fact, and it is so obvious that it needs no argument. When the same principle was put forward when other Bills, such as the Railways Bill, were being considered, it had the support of Deputy Johnson and those who sat with him.

Will the Deputy refer to the debates and the divisions?

It was admitted in connection with that Bill that one of the advantages to be derived from it was the collective purchasing by the different departments on behalf of the unified railway instead of from separate entities. We have yet to see the advantage of that purchasing, but that was certainly one of the points made. I do not know whether Deputy Johnson is a member, but I am sure he is a supporter, of the many co-operative concerns in the country, and would he tell me what is the basis of the success of these concerns?

Voluntary co-operation.

Unified purchasing.

Not by compulsion of the State.

Unified purchasing is the basis of the success of co-operative concerns. Take another illustration, if it be necessary. The State, or local authority, is only carrying out a bigger business on the lines that the same business is carried out by what we might call an ordinary business firm. Take such a concern in the Free State, having a central department in one of the largest cities, and with sub-offices in different towns or in every town.

Who is the State Socialist now?

Would anyone suggest for a moment that the policy of such a business concern would be to purchase locally in the different towns, rather than centrally through the head office? As I have said, the advantage of purchasing centrally is so obvious that it needs no argument. While the principle is laudable, we must, in adopting it, be sure that we are not going to get into troubles, if I might call them such, that might take away some of the advantages of that principle. First of all, I do not see that it is incumbent on the Ministry under this Bill—of course it is one of the things that can be put right in Committee—to advertise its intention to accept tenders in bulk for these different commodities, as required by the different local authorities. I think there should be a section in the Bill that just as it is incumbent on the local authorities, for reasons I need not go into, to advertise the fact that they are about to receive tenders for such and such commodities, so, for similar reasons, it should be incumbent on the Minister to advertise the fact that he is about to receive tenders for such and such commodities in bulk. But, as I have said, that is a matter that can be put right in Committee.

Another matter I would like to mention, and it is the only point regarding which I have some difficulty, and that is in connection with the setting up of a central department. There will have to be officials who will draw up specifications for these different commodities, and ensure that the samples sent in by those who are tendering for these supplies are up to a standard that could be approved of. That means the setting up of a new department, and one of the difficulties I have at the moment is as regarding the expense involved in the appointment of numerous officials in that department. In fact, it is possible if that department were carried out on the same generous scale as some of the existing departments in the Government, the expense possibly of carrying on such a department might more than outweigh any advantage that might accrue from centralised purchasing. But I hope the wisdom of some of the Deputies will enable us to insert amendments in Committee that will prevent that state of affairs arising.

As far as I can learn the principle that combined purchasing is good business is admitted. Where exception is taken, is with regard to the way in which we arrive at combined purchasing. It was in consultation with the General Council of County Councils that this Department commenced to function in the first instance. Deputies who have had experience of joint bodies will admit that there is rarely satisfaction in their management of a particular institution. The management of the Trade Department of the Local Government, or of joint purchasing by, say, the General Council of County Councils, would not be as satisfactory as if it were under the Ministry. It would mean a very large number of meetings of the General Council, and possibly there might be a difference of opinion as to whether or not support should go to one part of the country or another. If you are committed to combined purchasing the only point in dispute is as to whether the department having control of it should be under the local authorities or under one central authority. My opinion is that the most satisfactory way is to have it under a central authority, and the best central authority, and the one most disinterested, would be the Department of Local Government.

Efforts have already been made to standardise articles. Deputy Johnson, I think, made the case on one occasion that there should be standardisation of building materials, and that is an excellent principle. We are certainly coming to the stage that centralisation is a most important thing. All big businesses in successful countries are now centralised. While I would prefer, if I got my choice, a collection of small industries throughout the country, as mentioned by Deputy Morrissey, I would like to know where are the small industries and how they can possibly be supported nowadays, and be able to compete with huge institutions, with the inexhaustible sources of supply at their command, so far as capital, bulk purchases, and things of that kind are concerned. The small industries are going, if they are not already gone. We may regret it, but the fact is there. As far as the local authorities are concerned, much the same thing would prevail. No single local authority can be in a position to buy as well, or as cheaply, as one particular department purchasing for the lot.

Does the Minister discriminate between certain articles which are easily standardised and universally used, and articles for local consumption which are local in their general character?

We are coming down to the particular items. I have looked through a list which has been furnished to me. The Minister for Justice had a list himself of about 30 articles. If it would not delay the House too long. I would like to draw attention to the difference in price between articles bought locally and those bought by this combined system. Here are some of the articles:—

Article.

Local Contract (no specification.)

Local Government Contract (with specification as per list.)

s.

d.

s.

d.

Check for aprons

2

1½ per yard.

1

2 per yard.

Blay calico

1

3½ per yard.

0

9 per yard.

Fine flannel

2

6 per yard.

1

8 per yard.

Coarse flannel

2

5 per yard.

1

10 per yard.

Cotton sheeting

5

9 per yard.

1

5½ per yard.

Blankets

4

0 per lb.

2

7 per lb.

Blue serge

17

11 per yard.

10

6 per yard.

Worsted yarn

3

6 per lb.

2

9 per lb.

Fly wool

5

0 per lb.

4

2 per lb.

Mr. COSGRAVE

What local authority is the President referring to?

I have not got the name of the local body before me, but if application is made I will be pleased to supply it to the Deputy.

Mr. COSGRAVE

I know local bodies myself and they never advertise for contracts without supplying a specification.

I could easily keep the House until to-morrow morning detailing the difference in price at which local authorities accepted contracts over the Local Government Trade Department's prices. I have the list here.

Mr. COSGRAVE

From what body did you get that list?

The list is supplied by the Local Government Trade Department, and they have compared their prices with the prices paid by certain local authorities throughout the country.

Could the Minister also supply a list counter to that—that is to say, where the Trade Department quote a price and where the local authority has made a contract at a price lower than that quoted. This list, of course, has been drafted for the purpose of supporting the case for this Bill. What I want to know is, if the Minister is prepared to produce a list showing where the Trade Department prices were higher than the local prices?

I would be pleased to get that. The point is that it would be a wonderful advantage to the Trade Department and I would be very glad to get it. Here is a case where the advantage is all on the other side, and is it to be refused? This particular list, from which I am reading, was compiled on the 29th January, 1924, that is 12 months ago. There is a later out in order that it could not be stated that I was unfair, this is a report made by the Trade Department at the time to justify its existence, or to point to certain lessons that might be learned from it.

The point of objection to that is that this is all possible and all this case is made in respect of the Trade Department that is functioning up to now where there has been a choice given to the local authority to act through the Trade Department. Now you want to impose an obligation on the local authority, in effect a rigid obligation, to buy through the official contractors, and in effect, I say again, not to allow any local choice on the part of the local authority.

There is a local choice always in the case of a local price being more favourable. The Deputy's case was in respect to articles produced locally. On looking through the list I find some difficulty in finding articles that might be produced locally. For instance, in the case of Hennessy's brandy the Trade Department price is 15/- per bottle, while as regards local prices I find that they vary from 16/6 to 20/-. I could give a list of the local authorities which paid the heavier price if the Deputy wishes to have it, but I imagine that the reading of the list is becoming somewhat wearisome to the House. The percentage is much the same down along. If the case be made in regard to eggs, bacon or butter or articles of that sort, certainly, the local contractor might do much better. There is one article that I have come across in the course of my perusal of this list. It is that of margarine, in which the percentage of fat was as low as five per cent. That was an imported article. As a result of the intervention of the Local Government Trade Department, an article of Irish manufacture was I believe provided at a lower price, in which there was a very much higher percentage of fat. I would like to know if the case is that the unfortuate people in these districts are to be deprived of the extra fat and the advantage of the lower price, and the further advantage of having Irish manufacture, simply because some particular local contractor happened to get a better price for the foreign material. I observe, too, in reading through the list that in one case a local authority up north specified for soap which was manufactured in the Six Counties.

The price they paid was beyond the price at which the Trade Department was purchasing soap manufactured in the Saorstát. I came across another case in which a certain local authority had in stock a considerable quantity of English goods. The corresponding items in the Local Government list were of Irish manufacture and the quality was much superior in the case of the articles prescribed by the Department. I think it will be generally admitted that if there is anything to be done for Irish industries it is through Government contracts and through contracts given by local authorities. In certain cases there is competition between the local contractor and perhaps an Irish manufacturer living in another county or at the other end of the Saorstát, and it is no justification to say that you are helping the local person by giving him a price in excess of what the goods could be bought at elsewhere when they are all of Irish manufacture. That is what entered into a good deal of the opposition to this central buying. I do not mean to say that everybody has made a case against the central purchasing, but that is one instance. I am sorry I cannot find the particular item that I mentioned, but it was very interesting. Deputy Corish, I think, made a complaint about road machinery. Now, in the case of the supply of road machinery, I do know that many delays occurred. In looking through the files dealing with that, I think there is very little doubt that if the local authorities themselves were dealing with that separately, much greater time would have elapsed. There was considerable delay and delay in many ways, but there is no doubt that the Department took every possible step that could be taken, at the time, to ensure delivery at the earliest possible moment. In that particular case, so far as I know, there was a ring amongst the suppliers, and perhaps no great advantage was derived by central buying, except in the matter of early delivery. But in the event of machinery of the kind being required again, it is likely we will be able to make some inroads upon that ring. Quite a number of articles which had not previously been manufactured in this country were subsequently manufactured by reason of the orders that were given from this Trade Department. Deputy Corish knows of one in regard to bedsteads, where, apart from what was required by the local authorities, as a result of the Department's acting, it was possible to supply merchants in various parts of the country. I observe, on looking over the list of purchases, that one local authority had actually paid 11/- per bedstead for foreign manufacture over and above the price at which home-manufactured goods could have been supplied. The same thing applies to shovels and to two or three other items.

This is the report: "I inspected a particular institution, checked books and stores. I enclose you a list of compared prices. I opened the sample mattress and found it was filled with fibre, although the specification was for half fibre and half hair. So far, only one sample has been sent in. I have sent you a sample of the shawls, which you will see for yourself are useless. The tweed, of which I have also sent a sample, you will notice is only single width at 3/9 per yard, while ours is 56 inches at 3/10½. The quilts, which are supplied at 8/6 each, are only 54 inches by 69 inches and weigh 33 ozs. against ours at 8/10 each, 60 inches by 80 inches, forty ounces. The quilts purchased by this institution are English manufacture. The blankets, of which I have sent you one, have been delivered, but I do not think the sheep have suffered very much in the supply of the blankets to this institution."

That is a sample of the return submitted in respect of a certain institution. Surely, the people for whom these goods are supplied are entitled to have the very best articles money can buy, and at the cheapest price. If the Department is at any time inefficient, if they purchase goods that can be bought cheaper or better, there is an opportunity here of dealing with the Minister and of criticising him in respect to the Department. I would like to case the mind of Deputy Good in respect of the cost of this institution. It is in existence now for about three years; it is in its fourth year, and the cost is known. It is, I think, £4,000 per annum. In the first year of its existence, from the most careful calculations that can be made, a saving to the country, in respect of purchases, has been effected of something like £100,000, and, apart from other advantages, it has secured the purchase of Irish manufacture as against foreign manufacture. and it enabled certain goods to be manufactured here that were not previously manufactured here.

Question—"That the Bill be read a second time"—put and declared carried.
Third Stage ordered for Wednesnesday, 18th February.
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