The discussion was proceeding on Amendment 4 to Section 6 of the Bill. That amendment is now before the Committee.
LOCAL AUTHORITIES (COMBINED PURCHASING) BILL, 1925. - COMMITTEE STAGE (RESUMED).
There was a considerable amount of discussion, when this Bill was before the Committee on the last day, regarding the terminology of sub-section (3), Section 6. If it would meet the objections that were raised, I propose to introduce on the Report Stage an amendment to this effect:—"After the word ‘that' on line 55, to add ‘at the time such purchase was made the members of the local authority had reasonable grounds for believing that such purchase or contract would be.'" I should have stated it is proposed that would be inserted after the word "that" and all the words from "such" down to the word "duties" on line 59 would be deleted. The sub-section would then read: "At any such audit unless the Auditor is satisfied that at the time such purchase was made the members of the local authority had reasonable grounds for believing that such purchase or contract would be in the interests of the ratepapers, he shall charge against such members jointly and severally ...." I think the amendment which I propose to introduce on the Report Stage would meet the objections raised to the section as drafted.
While there may be a certain improvement in form, so far as I can understand it, the essence of the objections has not been met. Even in the amended form, the implication remains in the Bill that if a local authority decided to purchase articles from firm (A), instead of from firms (B), (C), (D), (E) and (F), who might be on the official contract list, such action would be due to unworthy motives unless there could be proof to the contrary. You are throwing an onus on the local authority, and you are implying upon it blame for doing that which the Bill itself, according to the interpretation of the Minister, specifically allows it to do.
In the previous discussion the Minister took as an illustration the case of a local authority which paid a higher price for an article, or bought an inferior article than could have been obtained from the official contractor. I want to take as an illustration a case which is more likely to be met with in practice. I take as an example the case that the articles purchased from a local purveyor, merchant or manufacturer, not on the official contract list, were purchased at an equal price or at a lower price, and that they were of better quality than could be obtained from the official contractor. Consider the position.
According to the Minister's interpretation of the Bill, it is quite open to a local authority to purchase from a firm which is not on the official list. In the case I instance, the local authority purchase at a price equal to or lower than the official contract price. But even in the proposed amendment, the Minister wants to assume that there were mala fides on the part of the local authority in going outside the official contract list. I think the reverse should be the position. It ought to be the auditor's duty to assume honesty of purpose and not to assume, as it appears the Bill permits, that there was some wrongful intention in going outside the official contract list.
I believe the very phraseology of this is important, inasmuch as there is all the difference between having some faith in public authorities and having no faith in public authorities; there is all the difference between believing they are elected as honest men to do honest work and believing they are there to feather their own nests or to do something dishonest. If you are going to assume that, then you are going to get that kind of person. You are inviting such a type, and it will be casting a slur beforehand on the character of public bodies if there is inserted in a Bill of this kind a phrase which assumes wrong intentions unless they can prove to the contrary. I do not think the proposed amendment, in its phraseology, does satisfy the requirements of the case, and in the circumstances I will ask the Committee to divide on my amendment.
Deputy Johnson has just stated that he considers the wording is a matter of very great importance. I think he might have gone further and said the wording was practically the fundamental matter. When the Dáil reported progress on this very question I think there was substantial agreement—I venture to claim that—between the three Deputies who pressed this particular point and the President. If I understood the President aright, I do not think it was his intention—and I do not think it is his intention—to let there be the assumption that unless the contrary be proved, there has been some dishonesty in the transaction of the local body in going outside the official contractor.
I suggest to the President that the matter might be met if the auditor had imposed on him just those duties that are proper to an ordinary auditor in any ordinary business, and not have imposed on him duties that no auditor would accept in an ordinary commercial way. When an auditor goes into a firm and finds some item entered against some transaction, and that is not intelligible to him, he calls for information. If no such provision as this section were in the Bill, and the Local Government auditor went down, he would still, I take it, be empowered to ask why it was the local authority went outside the official contractor in a specific case. In that case he would be putting the question upon the assumption that sufficient information was not before him. With the section remaining in the Bill containing the phraseology that has been chosen for it, the auditor will have to assume, no matter what be the price or specification, and even if the price and specification were better, that there was something undesirable and something dishonest about the transaction.
That is neither fair to the auditor, nor is it fair to the local authority. Why not leave the auditor with the ordinary functions of an ordinary auditor, and let him, if he finds that the official contractor has not been selected and that the official contract list has been departed from, call for information? Let him not, however, stipulate or assume or proceed on the foundation that there has been something dishonest, as this wording would seem to suggest. I think it is a question of wording, and I believe some change in the wording would carry out the President's intention. I do not think the proposed amendment quite carries out the intention.
It would not be a proper course for the Government to accept Deputy Figgis' interpretation of how the auditor should conduct his business. It is not the work of an ordinary auditor who would deal with ordinary business, and the Deputy ought to know the reason why it is not. There is a considerable amount of money distributed by the Government amongst local authorities throughout the country under various heads. In other words, the Government assumes the burden of the cost of a local service to a very considerable extent. In a great number of cases representations have been repeatedly made that the burden should become even heavier on the Government. It is with that in mind, and having it as the fundamental basis of this proposal of combined purchasing, that the idea has become strengthened that the cost of local administration could be—as it must be —brought down to the lowest possible level.
While looking for the advantages that may be derived by local contractors or local business people, the main question is the least burdensome rate that may be borne both by the State and the local authority. That is the real business in connection with this matter. Now we start to get what is known as a list of official contractors. The case is made, "What about the local man? Why will he not be allowed to tender? Why will his tender not be accepted?" This is a matter in which it is impossible to have it both ways. If you endeavour to get a list of official contractors who will tender at the lowest price, obviously you must be in a position to guarantee the maximum of business. If you make a reduction of the amount of business accruing to the official contractor, you will naturally have a higher price than if it were known that he was going to have the whole of the business. I do not know if Deputy Johnson agrees with that.
What does it mean? Does it mean that you are going to guarantee a maximum of business to a particular contractor or to any number? Does it mean guaranteeing anything to the contractor? Is that the intention of the Bill?
The intention of the Bill is to buy at rockbottom price and I am not concerned with anything else.
If you can get that from a non-official listee what is the position?
I guess it is going to be a new creation. The official contractor must be given some special reason for giving rockbottom price. Let any Deputy make a case for the exclusion of his area from the list so that the local business men, but not the local ratepayers, will benefit. There is nothing for an official contractor to go in for in a case of that kind.
Then your scheme breaks down.
I am going to see that it will not break down. If the local contractor applies for a local contract at a price equal to that of the official contractor it is open to the local authority to take it.
Then what is the value of the guarantee?
That it is more than likely that a particular contractor, say in the case of tenders for two thousand bedsteads, will be given the contract at a price at which the local contractor would supply single bedsteads for. That is agreed. Is the proposal this: that having seen the price of the official contractor, the local contractor can say: "I will supply at the same price"? If that is the case, then there is obviously a conspiracy to make this non-operative.
That is not the case I put. I will take one specific case.
Day and date.
On any given date that the Minister chooses to name.
1st of April.
That will be a very appropriate date. Let him choose his own local body and any article he likes. Suppose, for instance, a local body on the 1st April gives a contract to a local contractor, as distinct from an official contractor, at a lower price than that of the official contractor and at the same specification—the President might say that that would be an extraordinarily rare thing —why in that particular case should the Local Government auditor assume that there had been something that had not been quite straight? Let him ask for information by all means, but not in the manner suggested in the Bill, on the basis of the assumption that there has been something crooked.
The Deputy does not object to giving the information. He complains about what I once heard was the first law of natural philosophy, and that is, the acquiring of knowledge and communicating it to others. In this particular instance a local authority accepts a tender on the 1st April for a particular class of goods from a local contractor at a lower price with the same specification than that of the official contractor. The Deputy did not state at what time the official contractor was declared. If he were declared, say, on the 5th day of March, and if the local contractor comes in on the 1st April, I say that that is not fair. Both events ought to take place about the same time. There should be a fair field. We are prepared to give a fair field to the local contractor. We are entitled to learn from the local authority when it makes a bargain that will be of benefit to the rest of the local authorities throughout the country. The Deputy would do it himself. Supposing he had a number of branch houses in the country with a big house in Dublin, and if he found that one of the branch houses was in a position to purchase shovels or spades at a price lower than that which he was paying in Dublin, surely he would consider it advisable that an entry should be made in the books pointing out why the contract was accepted by the branch house, and stating the price, specifications, and so forth. If the Deputy admits that, and if he were dealing with business on a big scale, surely he cannot object to the same thing being done by local authorities.
I do not.
Very well. I suppose it will be admitted that official contractors will be placed on a fairly low price. If that be the case, surely when there is an alteration made, when you go outside the official contractor, it is not too much to ask that in a column, specially prepared for the purpose, the local authority should state why it has accepted a tender other than that of the official contractor. That is in one portion of it. In the other portion, the amendment which I suggested may not go the whole length of Deputy Johnson's amendment, but it meets the case and, in my opinion, ought to be accepted.
Amendment put.
The Committee divided: Tá, 13; Níl, 31.
Tá
- Darrell Figgis.
- John Good.
- David Hall.
- Séamus Mac Cosgair.
- Tomás Mac Eoin.
- Pádraig Mac Fhlannchadha.
- Tomás de Nógla.
- Ailfrid O Broin.
- Tomás O Conaill.
- Aodh O Cúlacháin.
- Liam O Daimhín.
- Domhnall O Muirgheasa.
- Pádraig O hOgáin (An Clár).
Níl
- Earnán de Blaghd.
- Seoirse de Bhulbh.
- John J. Cole.
- John Conlan.
- Máighréad Ni Choileáin
- Bean Uí Dhrisceóil.
- Michael Egan.
- Osmond Grattan Esmonde.
- Desmond Fitzgerald.
- Connor Hogan.
- Donnchadh Mac Con Uladh.
- Liam T. Mac Cosgair.
- Pádraig Mac Fadáin.
- Patrick McGilligan.
- Risteárd Mac Liam.
- Liam Mag Aonghusa.
- Patrick J. Mulvany.
- Martin M. Nally.
- John T. Nolan.
- Peadar O hAodha.
- Seán O Bruadair.
- Partholán O Conchubhair.
- Conchubhar O Conghaile.
- Séamus O Dóláin.
- Míchéal O Dubhghaill.
- Peadar O Dubhghaill.
- Pádraig O Dubhthaigh.
- Séamus O Murchadha.
- Seán O Súilleabháin.
- Caoimhghín O hUigín.
- Seán Príomhdhail.
- Liam Thrift.
Tellers.—Tá: Mr. Morrissey and Mr. Nagle. Níl: Mr. Dolan and Mr. B. O'Connor.
Amendment declared lost.
Before we go to amendment 5, may I ask when it is that the President proposes moving his amendment?
On Report.
I move amendment 5:—
In sub-section (3), line 55, to delete the word "unless" and substitute the word "if," and in line 56 to delete the word "not," and in lines 57 and 58 to delete the words "for any object other than the bona fide discharge” and substitute the words “without due regard,” and in line 59, to delete the words “of their duties” and substitute the words “to their duties.”
This amendment is in the interest of possible contractors. I have no special duty imposed upon me to look after the interests of either shopkeepers or merchants, but there is such a thing as acting fairly to men who have entered legitimately into a contract and protecting their interests. The section imposes upon the auditor the single duty, in certain circumstances, of declaring the contract illegal. The illegality may be on either side. The fault may be on the side of the local authority or on the side of a contractor and it would be very hard to judge who is to blame. But if the contract is declared illegal there is a possibility, even a probability, of a slur upon the character of a contractor. The amendment merely asks that the auditor shall have a discretion to terminate the contract in certain circumstances, if the occasion warrants such a course, or to declare the contract illegal if there has been any fraud or mala fides on the part of the merchant. I think that some such amendment is required, allowing the auditor the alternative of declaring the contract terminated without any declaration of illegality, instead of merely declaring the contract illegal.
I am afraid I cannot accept the amendment. The amendment, in essence, postulates giving the auditor a discretionary power. He has no such power, and he ought not to have such power. His duties ought to be so defined for him that he will act in the nature of a machine. If you place him in the position of exercising a discretion you put him in the same position as the representatives of the local authority, who are open to temptation, to put it in the lightest possible way. If the contract be a costly one for the ratepayers of a particular district, whose interests should be safeguarded? In my view, it is the ratepayers. A local contractor, or an official contractor, ought not to have a right against the best interests of the ratepayers of a particular district. If his tender has been accepted in the knowledge that it is at a higher price than the official contractor is getting, should there be a cast-iron safeguard in respect of a man like that?
Why assume a higher price?
If you do not assume a higher price, or a level price on a lower specification, there is no necessity for the auditor to enter into the matter at all.
The auditor has a discretion in the first part of the section, a discretion which the President says he should not have. You give him the discretion of saying he shall be satisfied or dissatisfied as to the bona fides of the local authority. If he comes to the conclusion that the local authority was not justified in making a contract at a lower price than the official contractor's price—perhaps thinking on the lines on which the President himself has been thinking, that he must protect the interests of the central contractor so as to cut prices— he may say that the local authority was not justified or that the advantage they were getting was not big enough to entitle them to go outside the official list of contractors. In such a case there is a mandatory provision that he must declare the contract illegal. Inferentially that is a slur upon the character of the local contractor or national contractor, who is not on the official list of contracts. Something he has entered into bona fide is declared illegal. There is an imputation of illegality on the part of the contractors. All I am asking is if there are no mala fides that the power of the auditor may be one of two things, either to declare the contract illegal or, in circumstances which do not show any mala fides on the part of the contractor, to terminate the contract. I imagine that anybody representing mercantile interests would feel that that was due to them, and I leave it to those Deputies who are more interested in business concerns than I am to stand up for their interests.
I think the Deputy might reasonably leave it to them, because, from my experience, the business men of this Dáil are very much alive to what their interests are. I wish to say that Deputy Johnson misinterprets me if he thinks I am concerned only with looking after the interests of the central contractor. I am not. The only interest involved is the question of getting the lowest price. You can only get the lowest price in certain circumstances. You cannot get an official contractor to tender at a low price if he knows that the business he is going to get from local authorities will represent only 25 per cent. of the total business. In other words, let us assume for a moment that whiskey was the item that was looked for. The Deputy, I am sure, has not much knowledge of that article of diet. But in that instance the specification is a very real item. There are various strengths of whiskies. The standard I think is usually called proof, and the higher the percentage of degrees under proof the lower the quality of the article. When I mention the word "quality" I mean the lower its exhilarating properties. A case is on record of where the price per bottle of whiskey has been lower through the local contractors than through the central contractor, but the percentage of degrees under proof has been very much higher, and while they may claim that they are getting whiskey at 12/6 a bottle I do not think there are many people suffering from severe colds or wishing to help their digestion who would be much enamoured at purchasing whiskey 39 degrees under proof. We have evidence of the fact that in some places it was purchased at such a standard. The local trader who has bought a huge quantity of this particular article at a low price, if he does not sell it to the county home or some other local institution, would have it on his hands for the rest of his life, unless he gets a much stronger article and blends the two together. I am prepared to take each article the Deputy has mentioned seriatim and make the case I am making for whiskey for the rest of them. No case exists for allowing a contract to run an hour beyond the moment that the auditor finds that it was entered into at a price higher than the price of the central contractor or at a level price where the specification is lower.
The President, then, has made my case. The contracts are not allowed in certain circumstances to run beyond a certain time. My amendment provides that the contract shall be terminated or, in other circumstances which may show mala fides, that it shall be illegal. Does the Minister not realise the possibility that a local authority may enter into a contract, not with a local shopkeeper, but a shopkeeper, merchant or manufacturer anywhere who is not on the official list?
I do, I admit that. It may be either with a local contractor or anybody else, but our experience has been that it is invariably a local person.
The President is speaking of experience in the past, but he is legislating for the future.
I am speaking of the last month or two, or three months.
After all, we are supposed to have some foresight, and we must consider the possibilities of injustice being done by a Bill of this kind. You may be legislating generally, but you must also take into account the possibility of doing injustice in a particular case. You may have a national contractor who is not on the official list. He may be able to sell an article to a local authority, say in County Cork, at a price below that of the official contractor. The auditor then comes along and says: "No; these official contractors entered into a kind of bargain. They got some kind of promise of a certain amount of trade within the year and the amount of the cut under that price is not sufficient to justify you in entering into this contract. Therefore, I am going to declare it illegal." I am sure that is an imputation against the honesty of the contractor. I am not talking about local shopkeepers at all, but of the possibility of a national contractor, perhaps of higher merit than the official contractor. The auditor is going to declare that the contract entered into bona fide is illegal. I am suggesting that the auditor should get an opportunity of saying that it shall be terminated without declaring an illegality.
The President has quoted instances of whiskey. I am not going to refer to that, because, as he says, I know very little about it—either the trade or the taste, I am glad to say. But Deputy Good the other day quoted another item—cement—which is more likely to be on the official list. There are many other items that are likely to become the subjects of rings, trusts, agreements or understandings between either merchants or manufacturers. You get this list of traders, manufacturers or merchants upon the official list of contractors. They know what price they quote. They make their arrangements. You cannot do better at the moment than the price they have quoted, and you are going to bind every local authority, according to the Bill, to purchase from that possible ring; you are making it as difficult as possible—you are going to make it almost impossible—for the local authority to go outside that ring. You are making it not only difficult, but you are going to cast upon other contractors not on the official list an imputation, at least of impropriety, if they attempt to sell an article to a local authority. As I said earlier, that is a case that the merchants, the manufacturers and the business men ought to be making for themselves, but I am quite sure that this Bill is going to be quite disastrous in its operation if you are going to encourage the formation of rings and arrangements and to deprive local authorities of the opportunity of buying in a better market than the ring will provide.
I could make the same case as Deputy Johnson in theory, but our experience goes to negative everything he has said. On the last day I instanced the case of a local authority being beset by a ring, so that milk could not be purchased at anything under 2/- per gallon. Deputy Johnson can conceive a number of members sitting round a table and receiving tenders, every one of which quotes at 2/- per gallon.
The Minister surely is not saying that milk is one of the articles which he precludes from being on such a list, because he will not allow any contractor to contract, except he is prepared to contract for the whole country.
Precisely. As a matter of fact, it was the institution of this trade department which prevented that local authority from being salted and having to pay that price, even though milk was not on the official list. There was no central contractor for milk. There was no official price for milk, but the Department were able to get a price from another part of the country which would have been impossible but for this central purchasing system.
That is my case.
The Deputy then makes the case: "Better let the local authorities hang separately; they cannot hang them all together." The principle of this Bill will result in better prices being obtained by the local authorities. If the principle be admitted, why provide every possible avenue to enable local authorities to slip out of purchasing from the central contractor? If that be the idea, then there is every reason why this particular section should be objected to. If the central purchasing system be a good system, what is the objection to having examined and investigated the reasons for departing from it? I do not see any objection to it. There should not be protection provided for a contractor who, knowing that there is a central purchasing system and being in a position to get on the official list, is able to get a contract in a local area, when he might have tendered for supplying local authorities throughout the country.
I have listened to the discussions on the Bill and the various amendments and, frankly, I must say that my opinion of the Bill is not a favourable one in any respect. The centralising of control by throwing upon the auditor obligations which, under ordinary circumstances, are not within the province of an auditor at all, is based on the idea that a few of the local authorities are going to be bodies, like little children, that cannot be allowed to have any say in such an important matter as purchasing for the institutions which they were elected to control. In one particular case the President stated that milk was the subject of a ring, where all the people in the district quoted the same price. Surely it does not require a drastic Bill of this kind to enable local authorities to extend the areas of operation. The Local Government Department stepped in in the case that was mentioned. The Local Government Department will have supervision over the operations of such a public body and can criticise or bring before them points which an auditor may call attention to. I think anything in the way of an amendment that would moderate the harshness of the decisions that may be come to, and that are compelled to be put into operation by the Bill, is all for the good.
Central purchasing, it seems to me, brings into play possibly more objectionable features than those that the Bill proposes to remedy. It may be that the purchasing of large quantities from the central contractor will be cheaper, and, as the President stated, it is due to local bodies that they should be put in a position to purchase at the lowest price. To say that the local bodies must under any circumstances purchase from the official contractor——
No, that is not the case.
I cannot see with the operation of the Bill that any locally-elected bodies will be safe if they go outside the central contractors. No matter what consideration arose that influenced the local authorities in departing from central purchasing the auditor must, in the ordinary course, start with the assumption that there is fraud behind it. I think that is taking away from the judgment of the local authorities. It may be said that there have been great abuses in connection with local authorities. I do not know. I think it is a slur on local bodies, and on the men who will be elected to them, if, when the auditor comes in, they are, practically, to be put into the dock and compelled to justify their action, whether that action was open to suspicion or otherwise. I intervened rather on the invitation of Deputy Johnson on this matter, because I feel that as the Bill is going through more questions may arise than are now evident on the face of it. I think the modification proposed by the amendment of Deputy Johnson would materially assist to soften the Bill in a way that is required.
I do not know if the Deputy was here when I undertook to introduce an amendment on the Report Stage. I think it would compose the Deputy's mind if he was aware of that fact. The section would read:—
"At any such audit, unless the auditor is satisfied that at the time such purchase was made the members of the local authority had reasonable grounds for believing that such purchase or contract would be in the interests of the ratepayers."
Amendment put and declared lost.
Question proposed: "That Section 6 stand part of the Bill."
I want to repeat some of the arguments that have been used because I think this is the essence of the Bill, inasmuch as it imposes what are, in effect, penalties for doing what ostensibly the Bill allows to be done. The proposal is that the Minister shall enter into tentative or provisional contracts with central agencies or principals, and shall notify the various local authorities throughout the country that such articles can be obtained at a certain price for a certain period, such price to be the price at which they are to be delivered in any part of the country. A small manufacturer in Cork, Dundalk, Wexford or Galway tendering for particular articles of common consumption would not feel justified in entering into a contract to supply the whole country. Unless he can enter into a contract to supply the whole country, if required, he is not allowed to go on the list of official contractors. That contractor may say he is prepared to supply that article within the province of Connaught, of Munster, or of Leinster, but not outside. He can calculate the rate of carriage, cost of delivery, etc., and he knows that within such an area his equipment would allow him to supply all probable requirements. He may not go on the official list of contractors, however, because he will not bind himself to supply the whole country. In effect, the local authority is to be debarred from going to that contractor outside the official list. If the local authority risks the penalties and defies the intention of the Department of Local Government by making a purchase from the contractor for the province rather than the contractor for the whole country, when the auditor comes along he will say: "No, you are not justified in entering into this contract, though you are saving the ratepayers money." The contractor is then going to have imputed to him wrong motives, and the local authority is going to have imputed to it wrong motives; and both are placed entirely at the mercy of the judgment and discretion of the auditor. There is a pretence that the Bill intends to allow contracts to be made outside the official list. That is shattered by this section. Everything in this section is designed to frighten the local authority from entering into any such contract outside the official list of contractors even though they may be getting a better quality and paying a lower price.
The imputation all the time is that they have been doing a dishonest thing and acting against the interests of the ratepayers. The Bill, with this section, is going to do what Deputy Wilson will be glad to hear, and what I once would have thought, from certain speeches from their benches, Business Deputies would be glad to hear—to establish by a side-wind, in respect of certain scheduled articles, a system of National Purchase and State Socialism. It is going to say: "We, the Local Government Department, are going to purchase through particular agencies all the commodities required for all the Local Government institutions in the country (naming the particular articles), and we are going to make it penal for any of those Local Government institutions to go outside that range." I said "State Socialism," but State Socialism with a difference; it is rather State Socialism via organised commercial trusts. You are going to encourage the trusts and are going to tell the customers of the trusts that they will have no alternative but to purchase from one or other member of this trust.
I think, if this section passes, it will be quite useless to suggest any longer that the intentions of the Bill are to give liberty to local authorities to purchase outside the official lists. As Deputy Good pointed out the other day, we do not know the kind of commodity to which this Bill is going to apply. That is all in the future. It may be bricks, cement, ticks, flour, bread, milk —anything, at the discretion of the Minister for Local Government. You are going, by passing this section and the Bill as a whole, to make it incumbent on every local authority to purchase those articles from the small group, as it probably will be, or the single person, as it possibly will be, that the Minister for Local Government designates. You are going to make it as difficult as possible for any person to go outside that list. I say this section ought not to be embodied in the Bill in its present form. It is an insult to the local authorities, and it is doing by a side-wind what might be in certain circumstances a good thing, but which is being done in a bad way.
There is no necessary divulgence to the people of why certain persons should be put on the official list. Under the Bill, it is not going to be made clear that certain contracts have been entered into with certain persons for good and sufficient reasons. At the discretion of the Minister, certain persons will be put on the official list for supply of certain articles for the whole country. You are almost making it penal for the local authority to go outside those contractors. I say the section should not pass. If it passes, it will be doing what the Minister for Local Government, in his introductory speeches, denied he was attempting to do.
I am sorry I did not hear all the President had to say by way of explanation of some of the clauses that presented considerable difficulty on the last day. One of the objects we had in view on the adjournment asked for was to get information on those particular matters. I agree with Deputy Johnson that the object of this Bill is not exactly what has been explained to us by the President. The President is anxious to paint in rather attractive colours some clauses in this Bill that are anything but attractive. The Bill, as drawn, is really intended—the more one studies it and the more one hears it debated the more one is convinced— to prevent local authorities from purchasing any particular commodities for which a price has been arranged centrally. The President has done everything he can to try and get rid of that particular feature of the Bill, but I am convinced he has not succeeded. The intention of the Bill is just, as Deputy Johnson has explained, to prevent local authorities purchasing locally. That being so, before I give my approval to this Bill or this particular clause, I want to know what particular items the Bill is to apply to. That is the kernel of the measure. While it would be an advantage to apply the principle of central purchasing to certain items, I am satisfied it will be a disadvantage to apply it to other items. I do not know whether the President has given us the information we called for on the last day about the schedule to be attached to this Bill. If we had that, we would know what items it applies to. Until we get such schedule, one is at some disadvantage in dealing with the Bill. I urge, therefore, that the President should give us some information on that point.
The President has laid stress on one feature. He thinks that by purchasing centrally he will get rid of a certain amount of what we might call the "local fraud" that has arisen in connection with contracts. Central purchasing, instead of getting rid of "local frauds," may create national fraud. There is no use in using that argument amongst practical men. I might as well argue, on the other side, that this Bill is going to aggravate rather than reduce the trouble he has mentioned. I want to know, before I can give my consent to this Bill, the particular items it is going to apply to, because I am satisfied, from my experience of business matters, that central purchasing will be an advantage in some cases and a disadvantage in others. I think we should apply central purchasing to goods, where it is an advantage, and not apply it where it is going to be a disadvantage.
I was glad to hear my colleague, Deputy Good, on this matter, because he voiced my opinion now to a greater extent than he did on former occasions. Deputy Johnson stated that this was State Socialism. We have been getting used to a certain amount of Socialism, so this measure has not come so suddenly or harshly on us as it would earlier in the session. But Clause 6, no matter what any Deputy's opinion on it is, would be a dangerous clause in any Bill. The whole principle of central purchasing could be dealt with, I think, without this Bill at all. If this Bill is necessary, clearly Clause 6 aims at bureaucratic control of all the institutions in the country, as far as purchasing is concerned. You cannot get over that. The people elected to run the local government of the country are going to be puppets in the hands of the Local Government Minister. The auditor can make the position of the individual councils practically unbearable unless they deal with the official contractor. Deputy Good has said that this clause is just as likely to lead to abuse as if the local authorities were left, as in the past, free to use their own judgment in connection with the purchasing of supplies. I would like to emphasise that. You have got a body in Dublin—a trades body—with a valuable concession to give to a contractor in connection with supplies to all the institutions within the Free State. Whatever contractors are selected are going to be in the happy position of State concessionaires for valuable supplies. Human nature being what it is, does any Deputy imagine there is not going to be a great deal of wire-pulling and general manipulation? By "manipulation" I mean that the efforts of a great many people will be put forward in the most strenuous way to get concessions which must be valuable. It is quite true that the weapon that is going to be put in the hands of the Local Government Department can be used to the benefit of the country. As has already been pointed out, in connection with articles that can be manufactured in the country, it would be a tremendous advantage to be able to place with a manufactory a substantial order, instead of its having to compete in the several places where contracts were to be given. But does not that cut both ways? Is that not likely to lead to a state of affairs whereby a particular manufactory may be without competition of any kind because the local bodies in the country are informed that they must get their supplies from the official contractor? Those people who would be, in ordinary circumstances, willing to compete, are going to be told beforehand that there is no use in their doing so, because the inference is that a particular contractor is going to get the supplying. People in an ordinary business way are not going to put in tenders when they know that their tenders are not going to get due consideration. The tendency in some cases may be towards the setting up of a monopoly for certain articles, and this monopoly so far from cheapening the article, as is the President's idea, may increase the price, to the benefit of the suppliers.
Various other things may arise, under the operation of this Bill, to the detriment of the trade of the whole country. I think it is a very difficult thing, once you embark on legislation dealing with business, not to do a great deal more than you intended to do. The intentions which brought about the production of this Bill I am satisfied were good and sound—the cheapening of the goods to the benefit of the ratepayers. But it is a very difficult thing to carry that out in actual practice. This Bill goes a long way beyond that. Under the drastic powers taken in Clause 6, and other clauses of this Bill, you are going to provide another step in the ladder of bureaucratic control. This Bill will take away all initiative from those people who are elected on the local boards. That, I think, is not desirable. The objects which are sought to be attained by this Bill would, I think, be attained more surely by cooperation between the Local Government Department and the local bodies. To come along with a hammer and hit a man on the head is not the best way to persuade him. This clause is holding out a threat to every man on the local boards. That threat is not going to serve as encouragement to the local men to use their judgment or to assume that full sense of responsibility which their election under the Local Government Act would warrant their assuming.
I notice that while the speeches against this particular clause dealt almost entirely with the theory of objection, very little attention was paid to the particular items. In other words, the speeches did not come down to brass tacks. Deputy Hewat pointed out that there is a danger of placing the local authorities in the country in the hands of a monopoly, or of particular monopolists. I suppose I will be quoted extensively as a desperate character when I say that I would like very much to see in this country monopolists of that kind manufacturing goods which do not happen to be manufactured here at the present moment. There are such institutions in this country that, even though they are monopolists, are splendid institutions. I think Deputies will admit that Guinness's is a very well run monopoly——
For the benefit of the shareholders.
Is the President right in saying that it is a monopoly?
It is. I think if there be any person here who has any particular liking for the product of that institution, he will admit that it is a monopoly.
Would you wipe out Beamish and Crawford?
Not at all. Beamish and Crawford are still at liberty to tender for all the institutions in their area, and I think it will be found that there will not be much difference between the prices. The price is generally an understood price. It is not subject to reduction. It is on a standard. It is not one of those articles that one can select for examination from the point of view of price. If Deputy Corish were sitting over there I would be prepared to ask him whether or not his particular constituency did benefit by reason of the activity of this Department——
Does that mean that this Bill is merely continuing the activities of the present Trade Department? Does the President not admit that this is extending and enlarging, to a very considerable degree, the activities of the Department he is now praising?
I hope so.
If the Minister desires and intends to make legal and formal the present activities of the Trade Department, then I am with him. The present activities do not attempt even to preclude competition with an official contractor.
I thought it was understood that I had explained the provisions on a previous occasion, when dealing with this section. At the present time it would be open to the ordinary ratepayer to go into the audit of the accounts of any local authority and if that local authority were taking goods from the official contractor, and if the local authority had not advertised for tenders for these he could object to the payments being made. That is the position.
Does the Minister now suggest that he is only trying to regularise the present position of the Trade Department and remove this obligation from the local authority?
Yes, and more. The Deputy smiles, and there is good reason for it. The position is that at present there is an official contractors' list. Local authorities advertise for tenders after that list has been published. Then people are in a position to see what the price is that has been tendered by the Central Purchasing Department. I take it that will be admitted not to be exactly good business. Deputies Hewat and Good would agree with me in that, that it is placing a rather big strain upon the Local Government Department to have their list printed and published and in the hands of the local authorities, and then allow these bodies to look for tenders.
How is the President going to prevent that?
If that has not been already provided for it will be dealt with by me on the Report Stage.
Will the President attach a schedule? He would be quite right when he said that we did not discuss the particular item which he called brass tacks. Now to come to brass tacks, we have been calling for them by way of a schedule. Will the President on the Report Stage bring in a schedule and then we will be able to discuss the brass tacks? At present we cannot.
I have two copies which I will circulate to Deputy Good.
Will it be attached to the Bill?
No.
Then it is no use.
I am not going to be limited by what is in the schedule. I want this Department to be a workable institution. If Deputy Good had been here on a former occasion he would have heard me say, in response to criticism from Deputy Morrissey, that I would have been bound to accept the amendment from Deputy Morrissey or any other Deputy in connection with the distribution or consideration of the tenders, and that I would have members appointed by the General Council of County Councils, sitting with the Minister or with the official on these tenders in order to deal fairly with them.
As an Advisory Committee?
Or more than that. I would be prepared to give them a statutory position.
That is quite fair. The other point with regard to the schedule is one in which the Minister does not go as far as that. If he attaches a schedule to the Bill he can easily get the authority of this Dáil to add to that schedule any items brought forward by the Minister and passed through the Dáil from time to time. That is, that we should have a clause attached to the Bill giving the Minister authority to add to that schedule, providing that certain notice is given. That would prevent any difficulty arising on a particular point. Now, that being so, I would urge, both in the national interest and the local interest, that a schedule should be attached to this Bill, a schedule that we would have an opportunity of discussing in the Dáil before we are asked to pass this Bill.
I do not think that is necessary at all. I see a little force in that, but with the enormous number of items which a local authority requires and which perhaps a local authority may require in the future, and which might be required, say, while the Dáil was not in session, the Minister would be unable to instruct his particular department to ask for tenders for that by reason of the fact that he had not got authority from the Dáil.
We could get over that; we could provide for that.
I do not like the idea. I would be prepared to consider it. I do not promise to consider it favourably, but I do promise to consider it with a view to seeing whether anything can be done. Deputies fail to realise the potentialities of this proposal.
It is a bad principle in this section.
It is. There are several kinds of goods manufactured in this country since this Trade Department was set up. Amongst them are bedsteads, fenders, fire-irons, handles, army shirts, dungarees, and soft cotton shirts. Deputies have laid particular stress upon the advisability of giving due consideration to the discretion of members of local authorities in accepting tenders. I admit that theoretically the case could not have been put stronger. In actual practice it has turned out that there is a considerable partiality amongst certain local authorities or members of certain local authorities for buying goods that are not of Irish manufacture. As far as I am concerned I am against that. I believe Deputy Johnson is against it too.
I have got an amendment dealing with that matter down.
We propose to accept that amendment. As far as giving members of local authorities special discretion in those matters is concerned, I will tell you what my experience was. I was a member of a local authority for a great number of years. That authority was probably the largest purchaser in Ireland. I was at one time Chairman of its Supply Committee. The amount of work done there and the volume of it was remarkable. For three hours members were sitting working as fast as they could through long lists of schedules of prices. One was really more like a machine than a person exercising discretion. One's discretion was limited by the recommendations made by officials who had time to examine and set out in detail figures and specifications. Except in very rare circumstances, the lowest tender was accepted. So far as my experience of that particular local authority is concerned, if I were still a member of it, I would rejoice in being assisted, in the matter of purchases, by such a measure as this.
Would the President rejoice in being compelled to follow the decision of the Trade Department in this matter?
I would rejoice in being able to set out in the columns provided the reasons why we would accept a tender other than that indicated in the official lists, if those reasons were good reasons.
The President has been good enough to agree to consider the appointment of an Advisory Committee. That is a distinct step in advance.
I agreed to do so when we were dealing with this in Committee the last day.
I did not hear it. I only heard it for the first time to-day. I would now also ask the President to undertake to consider between this and the Report Stage the question of inserting a schedule.
Certainly, but not favourably. I will, however, consider it.
Unfavourably?
No, not unfavourably; but I will examine it very critically.
I thought, as we got the President to go so far, we might get him to go a little bit further and so settle our difficulties. I am sorry he will not do so.
I am concerned about a small blanket factory in my area which, through the operation of this institution, has been practically wiped out. I am very much inclined to follow the reasoning of Deputy Johnson that there should be some way in which a small factory of that kind would be allowed to enter into competition with the official contractors.
This will kill them all.
I believe it will.
It will throw a wet blanket on them.
The articles I have referred to, blankets, are very necessary in the county homes. Up to the present those manufactured locally were sufficiently cheap to be used; but through the operation of this Central Authority the factory is now closed and many hands are out of work. There should be a recasting of Section 6, so that an article of that nature should be allowed to be taken on its merits. The factory I have in mind is not large enough to supply more than one county. It is, however, a case in point following up Deputy Johnson's argument.
Would Deputy Wilson give us some information as to the price that the blankets were supplied at?
Perhaps if Deputy Wilson cannot give information in the matter of the price, I can supply some information which may be of interest. It has come to my knowledge that on more than one occasion where articles were tendered for in competition with the official contractors, it was found that some of the local articles would be about 50 per cent. dearer but would be above 300 per cent. better, and therefore the local authority thought they were justified in accepting the local tender. Even the Inspector of the Central Authority thought the local authority were justified in giving the contract to the local contractor. There are several cases in which local authorities ought to be allowed to exercise their discretion. I think we will insist on being allowed to exercise our discretion. Where local authorities are justified they will insist on exercising their own discretion.
I have the official list before me for flannels and blankets and I observe that as regards nine items mentioned, each item is of Irish manufacture. There are no things on the list bought from persons manufacturing in any country other than Ireland. The case mentioned by Deputy Gorey is a case which, in my opinion, would justify the insertion, in the column provided for the purpose, of the reasons why the local authority purchased from the local contractor. I am not the Local Government auditor, but I can say from my experience of Local Government auditors, that they would not question an item of that sort. If it were found the particular article could be purchased in another county, goods for goods, at a smaller price, then you have no right to complain.
I quite agree.
In the case Deputy Gorey referred to he said the price was 50 per cent. higher but the goods were 300 per cent. better. Is the auditor to be the judge of the better quality of the goods? Who is to be the judge of the difference between the relative qualities of goods and their relative prices?
I have not heard that particular question raised before. I should say the auditor would have the facts on the paper before him. He would have percentages of wool and he would have weights and measurements. All that would be down on the list. In a case like that I do not think the discretion of the auditor would be necessary. The quality in the case brought forward by Deputy Gorey was 300 per cent. better, but the price was 50 per cent. dearer.
As regards the case I mentioned, the local inspector was satisfied, and there was never a word about it afterwards.
The only thing is that the specification provided for the acceptance of blankets 300 per cent. inferior.
I did not mention blankets. I said an article was contracted for.
Deputy Wilson mentioned blankets, and I presumed Deputy Gorey was following in reference to the same article. If the official specification is to be zero, and the article 300 per cent. better in quality is going to be accepted, it seems to me the zero official figure should not be there at all.
I would like to emphasise that an Irish factory cannot get on to the list of official contractors unless it is prepared to supply an article at a given price, not merely in its own area but in any part of the Saorstát. The manufacturer must be prepared to supply that article to any institution in any part of the country. If he cannot do that, and if his equipment is not adequate enough, he cannot get on the official list. A local authority near at hand, if it purchased an article from that man at a lower price even than what is on the official list, has again the imputation put against it that first the local authority and then the man himself were acting mala fide. This section confirms that position, and practically puts the local authority and the contractor in a position of defence.
That is a good case theoretically, but the experience of the Trade Department has been that the small local contractor is delighted to get an order to supply the country.
What is meant by the President's reply that the small local contractor is delighted to get an order to supply the country?
I should have said the small local manufacturer.
That is exactly Deputy Johnson's point.
Deputy Johnson's point is theoretical; mine is practical.
Deputy Johnson's point is—and the point put forward by the Farmers' Party is similar—that the local contractor is only capable of supplying one county. Deputy Johnson says the man cannot get on to this list of contractors at all except he can supply the whole country. That appears to be a logical interpretation of the Bill. I would like the President to explain the last statement he made, that the local contractors were delighted to get the opportunity of supplying the country.
I corrected that by saying "manufacturers."
Do you mean that they could supply the local area?
With regard to that, there was a previous amendment down.
I know there was a previous amendment down in the name of Deputy Johnson, but that it was not accepted. The question was discussed, when this Bill was before us on a previous occasion, of having what we call contractors in certain prescribed areas. Now the Bill prescribes that it is to be the contractor on a schedule that is to supply the whole area. The difficulty is to get outside of that. My difficulty on that is a primary one, because if you had what you call bulk purchasing and were to start local purchasing, you would knock the bottom out of the bulk purchasing. No matter what way we take it, there is considerable difficulty in it. The blanket illustration that was given was an excellent one, and showed the necessity of having a schedule attached to the Bill. I think if the President would give us a schedule he would clear away a great many of his difficulties in connection with the Bill.
Question put—"That Section 6 stand part of the Bill."
The Committee divided: Tá, 27; Níl, 13.
Tá
- Earnán de Blaghd.
- Séamus Breathnach.
- Seoirse de Bhulbh.
- Máighréad Ní Choileáin
- Bean Uí Dhrisceóil.
- Osmond Grattan Esmonde.
- Desmond Fitzgerald.
- Connor Hogan.
- Liam T. Mac Cosgair.
- Pádraig Mac Fadáin.
- Patrick McGilligan.
- Risteárd Mac Liam.
- Liam Mag Aonghusa.
- Patrick J. Mulvany.
- Martin M. Nally.
- John T. Nolan.
- Michael K. Noonan.
- Peadar O hAodha.
- Partholán O Conchubhair.
- Séamus O Dóláin.
- Peadar O Dubhghaill.
- Eamon O Dúgáin.
- Séamus O Leadáin.
- Séamus O Murchadha.
- Pádraig O hOgáin (Luimneach).
- Seán O Súilleabháin.
- Caoimhghín O hUigín.
- Liam Thrift.
Níl
- John J. Cole.
- Darrell Figgis.
- John Good.
- David Hall.
- Séamus Mac Cosgair.
- Tomás Mac Eoin.
- Pádraig Mac Fhlannchadha.
- Ailfrid O Broin.
- Tomás O Conaill.
- Aodh O Cúlacháin.
- Liam O Daimhín.
- Domhnall O Muirgheasa.
- Pádraig O hOgáin (An Clár).
Tellers: Tá, Mr. Dolan and Mr. O'Connor; Níl, Mr. Morrissey and Mr. P. Hogan (Clare).
Question declared carried.
Sections 7 and 8 were agreed to, and added to the Bill.
SECTION 9.
(1) The expenses of the Minister in carrying this Act into effect to such amount as may be sanctioned by the Minister for Finance, shall be paid out of moneys to be provided by the Oireachtas.
(2) At the end of every local financial year the Minister, by order under his seal, shall certify the sum which has been expended by him out of moneys provided under sub-section (1) of this section during such local financial year in carrying the performance of his duties under this Act into effect, and shall assess that sum on the several counties and county boroughs in Saorstát Eireann in proportion to the net annual value of the property rateable for poor rate in such counties and county boroughs respectively and shall send copies of such order to the council of every such county and county borough.
(3) The council of every county and county borough shall raise the amount assessed by such order on such county or county borough by means of the poor rate as a county at large charge and shall pay the same into the Exchequer of Saorstát Eireann in accordance with such directions as may be given for the purpose by the Minister for Finance.
I beg to move amendment 6:—
In sub-section (2) to delete all words after the word "several" line 36, and substitute the words "local authorities purchasing supplies from official contractors in proportion to the total value of the purchases made by them from such contractors during such financial year and shall send copies of such order to every such local authority."
This amendment applies the acid test to the President's statement that it is not intended to make purchasing from the central authority compulsory. If a local authority purchases locally it is not fair to ask them to meet the general expenses. They should be only asked to pay in proportion to the use they make of the central authority. The obvious method of allocating expenses to local authorities is to allocate it in accordance with purchases made, and not to put upon it the expense of keeping up the central purchasing department from which they do not receive any benefit. The President can conceive local authorities that will purchase locally and that will not make use of the central authority, and, when he says that it is not intended to make it compulsory that they should purchase from the central authority, I think they ought not be compelled to bear expenses of the central authority, or, at any rate, only in proportion to the extent to which they use it.
I regret I cannot accept the amendment. Although the words "local authority" are used, the principal purchasers will be the county councils, and I am not disposed to open up a very intricate accountancy arrangement in order that no local authority will be charged a pound more in the year, perhaps, than it would be required to pay in ordinary circumstances. It may be necessary later on, should it appear that a particular local authority would derive major advantage, to consider whether or not an extra charge should be borne by that local authority. But as to the principle of the thing, as far as the majority of the local authorities are concerned, they are very much on the same level, and I should say that on the whole the extra cost that might be imposed upon a particular body will not be so considerable as to warrant the accountancy that would be required if we were only to charge for value received in every particular case. Deputies are aware that the amount paid to the local authorities by the central Government under what is known as Government grants through the local taxation account vary very considerably, and it is not regulated according to either the wealth or the extent of the area of each county council, and to superimpose this particular exact accountancy arrangement for charging to each area only its exact amount would really place an undue burden upon the economy of the scheme, and it might perhaps even minimise the advantage that would be derived from it.
It occurs to me that the equities of the case would surely be met more easily and fairly by making the local authorities pay the cost of the administration proportionate to their use of the administration. This is supposed to be a Bill to enable the local authorities to obtain jointly such supplies as may be required. When you are enabling the local authorities to do a certain thing one would imagine that they would pay for the machinery according to the use they made of it, but the Bill, as it is framed, proposes to make them pay according to the rateable value whether they use the machinery or not. I do not know what amount is likely to be involved. It may be quite small and not of very great importance, but certainly, theoretically, the case for making the charge a pro rata charge according to purchase is much more likely to be just. Again, I point out, difficulty arises from not knowing what kind of articles are going to be put on the contractor's list. You may find, for instance, predominating, such articles as might be used by the county boroughs for roads or houses. Conceivably these may be dominant, and the county boroughs will pay according to the rateable value, and not according to the use they make of the machinery for purchase. On the other hand, the articles upon the contractor's list may be mainly articles used by the county homes and the like. In such cases the cost may be fairly well distributed over the country. But on the face of it the equity seems to be much more fairly met by allocation according to the amount of purchase rather than rateable value. If the cost is not going to be great I do not suppose very great difficulty will be experienced by the local authorities, but if the cost is to be considerable I suggest that the method of allocating the cost to be borne should be the method proposed in the amendment.
I calculate that the amount per county council, taking it at 50 per cent. in excess of the information which I have at my disposal, would be about £200. The average county council would produce about £2,000 for one penny in the pound. Two hundred pounds would mean a rate of one-tenth of a penny. I do not think that the case is one on which a great deal of time may be reasonably spent.
Do I take it that the Minister is expecting that the cost of administration will be about £5,000?
The actual figure given to me is not £4,000.
Amendment put and negatived.
Question—"That Sections 9 and 10 stand part of the Bill"—put and agreed to.
SECTION 11.
The Minister may by order make regulations for all or any of the matters following, that is to say:—
(a) appointing the procedure to be adopted by local authorities in carrying this Act into effect,
(b) determining the standard of quality for any commodity for which the Minister has appointed or intends to appoint an official contractor,
(c) prescribing the conditions of supply for any such commodity as aforesaid,
(d) regulating the procedure and other matters relating or incidental to any testing or ascertaining of the quality or nature of any commodity for which he is authorised by this Act to make arrangements,
(e) prescribing any matter or thing which is referred to in this Act as prescribed or as being or to be prescribed.
As the President has expressed his willingness to accept it, I will formally move the following amendment:—
Before paragraph (e) to insert a new paragraph as follows:—"requiring that any commodity to be supplied shall be manufactured wholly or in part in Saorstát Eireann."
Yes, I accept the amendment.
Amendment put and agreed to.
On behalf of Deputy Nagle, I beg to move the following amendment:—
Before paragraph (e) to insert a new paragraph as follows:—"requiring that the wages to be paid and the conditions of employment to be observed by an official contractor for the supply of any commodity to local authorities shall be such as are required in the execution of contracts with a State Department."
I am assuming in this amendment that the practice regarding the fair wages clause is being rigidly adhered to in respect of purchases by State departments. The proposition in that case would, I imagine, be acceptable, inasmuch as the contract is, more or less, similar to a State contract. A contract made with a local authority is, in the first case, made with the State, in effect although not in form.
I accept the amendment.
Amendment put and agreed to.
Question—"That Section 11, as amended, stand part of the Bill"—put and agreed to.
Sections 12 and 13 and the Title were agreed to without amendment.