I wish to share time with Deputy Stanton, by agreement.
Adjournment Debate. - Public-Private Partnerships.
Is that agreed? Agreed.
I am disappointed that the Minister for Education and Science, Deputy Dempsey, is not in the House to give a clear answer on this issue. He seems to have given a number of answers over recent days and there is still a lot of confusion, disappointment, anger and frustration in Cork because of the uncertainty surrounding this public private partnership deal.
The decision to provide a new school of music through a public private partnership deal was taken in June 1999. It was announced for the first of a number of times by the then Minister for Education and Science, Deputy Martin, in October 1999. The Department appointed a public private partnership bidding committee in June 2000 and, in October 2000, a short-list was drawn up.
On 2 February 2001, the successful bidder was appointed following consultation with the Department of Finance which has been involved all along, not just at the last minute. The project was initially to be finished by September 2003 but because of delays in the planning process that was pushed back until the end of 2004. Jarvis Projects Limited was the company chosen to proceed with the project and, in good faith, that company embarked on full design and development negotiations and legal negotiations, went through a full planning process and has spent nearly €8 million on its application for tender and on the legal and development negotiations to date. The company has now been told that the Government is shelving the project.
Close to 1,000 people came to the Opera House in Cork last Friday to protest at the lack of a Government decision on this, and their anger was palpable. The staff and pupils of the Cork School of Music vacated their existing building in September 2001, some 16 months ago, in anticipation of the building of the new school. They were happy to do that because they believed Deputy Martin and other Fianna Fáil Ministers when they said this project would proceed. People are now in shock. They cannot go back to the old Cork School of Music building because it is no longer in a position to be used properly. This means that they are in temporary accommodation, including Moore's hotel and rooms rented for music practice.
What does this say about public private partnerships? They are in tatters. How can we expect a company such as Jarvis Projects Limited to come on board for another project when it has spent €8 million in good faith only to be let down by this Government? The Minister, Deputy Dempsey, blames EUROSTAT for the decision not to proceed, which is nonsense. The process has gone so far that it is not believable that a company would be allowed to spend €8 million before problems with EUROSTAT were anticipated. It is nonsense and EUROSTAT is being blamed for a decision made by Fianna Fáil.
This is a scandal and a mess, and somebody must answer for it. The State could lose up to €12 million if this project does not go ahead as it is costing €150,000 per month in inflation. Cork is to be the European city of culture in 2005 but will be the laughing stock of Europe if this project does not proceed. It was supposed to be the jewel in the city's crown. The students and teachers of the school, and the people of Cork, have been hugely discommoded and somebody must answer for this. Somebody should resign unless this project gets the go-ahead very soon.
We want answers from the Minister of State, Deputy Lenihan, and the Minister for Finance should also be in the House. The Department of Finance has refused to engage with Jarvis in recent months on this issue. The Taoiseach should also be involved. It is a scandal. The Minister of State must take this matter to his Government colleagues. It is a big issue. We will be the laughing stock of Europe and public private partnerships will have no merit if this project does not go ahead. No company will come near this country for PPP projects if it does not. I want answers and will raise this matter with the Minister tomorrow during Question Time, if allowed.
The Government does not realise how big an issue and scandal this is, not only for Cork but for the country. I hope the Minister of State has good news and that we do not hear of some obscure EU directive that has magically appeared. Somebody must be accountable for this and I am interested to hear what the Minister has to say.
As the Deputies are aware, the new Cork School of Music, a constituent part of Cork Institute of Technology, is being procured under the public private partnership model. The Cork School of Music provides training in a wide range of musical instruments, musical theory and speech and drama. The school caters for first to fourth level students, be they amateur musicians, music teachers or performers.
The tender for this project was advertised on a European-wide basis in June 2000. Following the project launch in July 2000, 12 consortia expressed interest in bidding for it. Following the presentation of outline proposals, the number of bidders was eventually reduced to three. These bidders were issued with an invitation to negotiate in November 2000. The consortia bids were submitted in February 2001, were subject to detailed evaluation under design and construction, services, and financial and legal by officials of the Department together with specialist advisors. Following this process, Jarvis Projects Limited was selected as the preferred bidder in March 2001.
We know all that.
The Department's officials and advisers entered into a period of intense discussion with Jarvis with a view to reaching financial close on the project. During this period Jarvis, under the terms of the project, sought and received planning permission for the project from Cork City Council. However, An Taisce submitted a planning appeal to An Bord Pleanála against the grant of permission. During the period of the appeal, work on the project was suspended and was only resumed after An Bord Pleanála rejected the appeal and granted planning permission for the development on 24 December 2001.
Recently, the Department of Finance raised a number of additional issues in respect of the project that officials from the Department of Education and Science have been examining in conjunction with specialist advisers. In addition, the question of the involvement of the European Investment Bank is being addressed. Proposals have been tabled whereby the European Investment Bank could provide refinancing for the project two years into the operations phase, thus reducing the overall cost of the project. Discussions with both the Department of Finance and the European Investment Bank are currently ongoing.
Under EU rules, where projects are financed on a deferred payment basis by the private sector, the capital value of such projects is a charge on the general Government balance over the construction phase. As the Deputies will be aware, the general Government balance is the critical measure of what can be accommodated within our obligations under the Stability and Growth Pact of the Maastricht Treaty. A EUROSTAT group is currently reviewing the accounting rules on this issue, as will a standing committee being established by the Minister for Finance to advise on the general Government balance implications of private sector financed projects.
Ultimately, the final approval for the Cork School of Music will be a matter for the Government and consideration of it will be based on a thorough assessment of affordability of the project in the context of the competing demands on the likely capital funding envelopes going forward.
The money is gone on the jet.
The Department will continue to pursue this matter with the Department of Finance and all other concerned parties with a view to having the matter determined by Government in the very near future.
The Minister's contribution was very weak.
I wish to raise the grave concern of parents and families of children and young adults with intellectual disability in County Kerry following the budget announcement in December last. I refer to the cutback of approximately €400,000 for the Kerry Parents and Friends Association and the cut of €775,000 for St. Mary's of the Angels, Beaufort, County Kerry. The Kerry Parents and Friends Association was set up in 1973 primarily as a support to people with intellectual disabilities and their families in County Kerry. The association opened its first residential and day service for ten adults with intellectual disability in Tralee in 1978. Since then the association has developed both day and residential services at 11 locations throughout County Kerry. The association has 217 people on its database, 53 of whom are involved in full-time or part-time residential and day services, 110 in full-time or part-time day service only and approximately 56 who are in receipt of support services under the association's home support programme.
To maintain 2002 service levels, the association has projected a deficit in revenue funding for 2003 of €413,000. It will have no option but to curtail service delivery this year and it is currently reviewing all services in an attempt to identify absolutely necessary curtailments which will impact least on service users, their families and staff. Despite having 14 beds empty and available in Killarney, Castleisland and Valentia, Kerry Parents and Friends Association will not be able to respond to emergency demand for day or residential placement. Emergency placement usually arises following the death or serious illness of a parent or carer. Many of those on the association's database are living with elderly parents and over recent years emergency admissions have been necessary.
The association will not be able to meet the demand for new day placements for children leaving special and mainstream schools next September. There will also be difficulties in meeting the change in service requirements of many of their current service users due to changes in needs, such as care for the elderly and challenging behaviour. It will not be able to relocate people already selected from St. Finian's hospital, Killarney, to more appropriate residential accommodation in the community, which it has done successfully in Listowel over the past year.
Kerry Parents and Friends Association has been underfunded for many years and this has been acknowledged by an independent consultant appointed by the Department of Health and Children. The association has incurred revenue funding deficits since 1984 and had a funding deficit of over €200,000 in 2001 and a large deficit in 2002. In the absence of additional change in funding policy in 2003 to address these serious deficits, the association faces a threat to existing service provision and employment. For example, funding for St. Mary of the Angels will be reduced by approximately €700,000.
No funding has been allocated for new service development in 2003, despite the fact that 1,711 individuals living at home require a full-time residential service, 861 require a day service and 1,014 require a respite service. Furthermore, more than 400 people with intellectual disability are living in totally unsuitable conditions in long-stay psychiatric hospitals. Consequently, there will be no funding for emergencies, which will inevitably arise when a parent or carer dies or is no longer able to look after their child, nor will funding be provided for day services for those children with intellectual disability leaving school this year. As a result, during this year St. Mary of the Angels will not be in a position to respond to demand for emergency day or residential placements. The respite service, on which parents heavily rely, will have to be curtailed. Day placements for children leaving St. Francis special school at Listowel will not be available and it will be very difficult to respond to the change in needs of the service users.
It is most regrettable that in 2003, organisations such as Kerry Parents and Friends Association and St. Mary's of the Angels will no longer be able to respond imaginatively in the true spirit of voluntary organisations to the needs of people with intellectual disability in County Kerry and throughout the country. I hope the Minister of State will have positive news for these people because they are very angry with the present situation.
I am replying on behalf of my colleague, the Minister for Health and Children, Deputy Martin. I thank the Deputy for raising this matter and giving me the opportunity to outline the position concerning this issue. I presume the Deputy is referring to the services provided by Kerry Parents and Friends Association. Between 2000 and 2002, the association received €8.5 million in revenue funding and €2.2 million in capital funding. In 2000 it also received a once-off grant of €190,000 to assist with a cumulative revenue deficit. Funding for 2003 has not been finalised with the Southern Health Board, which has the responsibility in the first instance for the provision of health related support services in County Kerry.
The overall economic position in 2003 has had implications for all aspects of public investment and this is reflected in the Estimates and budget adopted by the Government for 2003. Within this overall framework, however, two thirds of the additional funding available for non-capital investment in services has been allocated to the health services. This funding is being applied largely to maintain existing levels of service across all service programmes, including services for persons with an intellectual disability.
Between 1997 and 2002, an additional €188 million in revenue and €139 million in capital funding was provided, making a total additional investment of €327 million for the maintenance and development of services to persons with an intellectual disability and those with autism. Included in this funding is €27.2 million, which was allocated to meet identified need in existing service. In the current year, further additional funding of €13.3 million has been allocated to services for persons with an intellectual disability or autism to meet the full year cost of the 2002 developments and to further enhance the health related support services to children with an intellectual disability or autism. This funding brings the total additional investment in these services to €340 million over seven years. Of this total amount, over €200 million has been built into the ongoing budget base.
This funding has brought about very significant and unprecedented developments in the services. Between 1997 and 2002, approximately 1,700 additional residential places have been provided, with most of these based in the community. This figure includes new residential respite places which were developed in 1997 and 1998. Between 1999 and 2002, approximately 465 dedicated respite places were also provided. In addition, the period from 1997 to 2002 saw the provision of approximately 2,950 new day places.
Despite this very significant investment, demographic factors are contributing to growing waiting lists for residential services in particular, even though the number of persons in receipt of services, including full-time residential services, continues to increase. The increased birth rate in the 1960s and 1970s has resulted in large numbers of adults in their late 20s and early 30s requiring full-time residential services. In addition, persons with an intellectual disability are living longer than previously, adding to the needs of services compared to previous generations. This has also been the international experience in service provision to this population. While it is regrettable that the level of investment in these services achieved in recent years could not be maintained in 2003, my Department will work closely with health boards and other service providers in relation to service provision this year.