Dáil Éireann debate -
Wednesday, 25 Oct 2006

Vol. 626 No. 2

Leaders’ Questions.

Mr. Kenny

All over the country people are out fundraising for vital life-saving equipment. They are running marathons, holding coffee mornings and doing trick-or-treat campaigns. It is only a short time since John Aldridge took up what he called singing to raise money for a CAT scanner in Temple Street children's hospital. The purpose of his efforts was to provide a piece of equipment that would prevent children with serious head injuries from having to be moved to Beaumont or the Mater. People do such things because the Government is not providing money for the required priorities, so where is the €13 billion expenditure on health going?

It is just over a year since I exposed to the House the financial disaster known as the PPARS project. I remind the Taoiseach that €144 million of people's hard-earned money went down the tubes in a system that underpays and misspends. It does everything except what it is supposed to do. In response to that matter, the Taoiseach said he would freeze the project, stop the rot and halt the waste. Neither the Taoiseach nor his Government did that, however. The Dáil was misled about that matter because he did not stop the project, nor did he stop the waste.

I have a copy of the Astron Consulting report, which was published in September this year. The report, which is a fundamental review of the PPARS project review, is worth reading. It does not need any sexing up because its findings are so stark. The report's conclusions are that the PPARS project was "badly conceived" and "poorly implemented". It also states that "the system is not stable yet" and "reflects the old (health board) structure". In addition, it states that "the ongoing costs are very high". This year, the Government spent over €21 million——

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Kenny

——and it is proposed to do the same again next year. An even bigger shock is the report's finding that, from the start, the project's governance has not been strong. Since the pause, which was last October, "overall project governance appears to have gone". It has gone like the money and nobody is in charge. Nobody is responsible for the disappearance of €21 million down this black hole. Is this the financial engineering of which the Minister for Finance spoke?

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Kenny

The final conclusion of this consultants' report is that PPARS might become a "never ending project". A year ago, the Taoiseach told us that he would stop the waste, stop the rot and see that the people's money was saved. What does he propose to do about it now in light of the Astron Consulting report?

The Taoiseach

We are spending almost €13 billion on the health service, a major proportion of which is going into new developments every year.

Mr. McCormack

Administration.

The Taoiseach

Large amounts of that expenditure are going into projects to improve the quality of service for the public at every level. That is not to take away from the efforts of those engaged in charitable fundraising acts, which have always happened in this country.

The PPARS system has been implemented in six Health Service Executive areas so I am surprised that Deputy Kenny is asking us to stop it. To unravel it in those areas would waste money that is effectively working. It is supporting the human resource records for 70,000 staff on the payroll and a large amount of other projects in those Health Service Executive areas. As I said last year, the further roll-out of the scheme, other than in the six areas where it is working, is on hold. It currently remains on hold and no further work has taken place in those areas. The review carried out by the HSE since October 2005 concluded, first, that no long-term strategy should be adopted until the use of the system in existing sites is maximised and fully operational. That is what they are concentrating on. Second, the review concluded that the requirements of the new unified HSE structure should be clarified and that the PPARS project's capacity to fulfil these requirements should be verified.

Deputy Kenny will recall that the HSE did not exist when the PPARS project began. When the HSE started, therefore, one had to take account of the new structure, which is only in its second year. That work will take place over the next eight to nine months, led by the HSE's national director of services. That person is responsible for co-ordinating the activity and is implementing the project.

Sanction is pending for a capital cost of €2.844 million sought by the HSE for this year. No sanction has yet been agreed by the Department so no allocation has been sanctioned this year. Deputy Kenny mentioned a figure of €21 million but the overall cost estimate for the project in 2006 is €4.31 million, which is a recurring cost for the system as it is operating, including software, system-hosting and payroll support. There is a figure of €15.18 million for HSE staff and technical consultancy staff. These costs will continue to reduce as the system beds in. Unfortunately, we have not found a way of bringing in a new system that does not involve staff, and they must be paid. There is also a once-off cost of €1.55 million for hardware and consultancy.

Like all large organisations, the HSE requires comprehensive human resource support and payroll systems. Like other sectors, the HSE could not cover the entire country without using modern technological systems. There have been difficulties with the PPARS system, as there have been with IT systems all over the world. However, it is unreasonable for Deputy Kenny to ask the HSE not to continue to bed down the new system.

Mr. Kenny

That is the usual answer given by the Taoiseach on these matters. I am not sure whether the Taoiseach has been briefed on the four additional factors set out in the report, namely that there was no clear demand from management for the system and that management support was weak and has become weaker since the pause; substantial variations existed in pay and conditions, organisational structures, cultures and processes among agencies, the extent of which was not known before the commencement of the project; there was an inability to definitively freeze the business blueprints or requirements at any particular point in time; and there was a failure to comprehensively follow through on the pilot site implementation strategy before rolling it out throughout the country.

In terms of incompetence, the same applies in every other issue for which this Government is responsible. Last year, the Government spent €21 million on this project. This morning I listened to Fr. Peter McVerry, who said that young offenders were being allowed to rot in a warehouse and that literacy programmes were being cut in our prisons. This money could have supplied 100 public health nurses, while €20 million could buy 1 million hours of home help. A nine-bed intensive care unit could be built for only €2.5 million. The Taoiseach could have given a CAT scanner to Temple Street Hospital, in his constituency. A dialysis machine costs €35,000 and a mobile x-ray unit costs €40,000.

Nobody is in charge over there and the Astron report of September clearly points out what we predicted last year with regard to the PPARS project. Nobody is responsible, nobody is in charge and money is disappearing down the tube. Will the Taoiseach tell the Dáil today what he proposes to do about this? Who is in charge of this project? The Astron report states that there is no governance and nobody is in charge or responsible. Where is the Minister for Health and Children or the HSE while this Government is continuing to wilfully squander the people's taxes? What does the Taoiseach propose to do?

The Taoiseach

I have already stated who is in charge of the programme, namely the national director of shared services. Deputy Kenny can quote from the report but I will give a more balanced interpretation. The Astron report states that PPARS is working quite well in some areas but that overall disappointment exists at what is being delivered. That is what I said one year ago. It confirms that any further roll-out decision is on hold and recommends that it should be based on the new HSE structure, which is now 20 months old. We all agree with that.

The report goes on to state that this would have to be with the support and participation of senior management, which is obvious, and that complexity surrounding staff terms and conditions would have to be removed. We all know that the old health board system had a variety of health boards around the country in which people worked under differing terms, conditions, contracts and work practices. That was the reason we decided, in 2001, to introduce a unified health system, the Health Service Executive, which has come into effect and is working successfully — although in a difficult position — towards implementing a policy on the more than 100,000 health service staff who are working hard throughout the country. The report states that it is difficult to identify realised cost savings in sites where the system has been implemented but that project staff levels were reduced from approximately 500 to 254 by May, and it gives the cost of the project.

The report's recommendations are that a long-term plan is required by the HSE, that as a first step, the HSE should stabilise the system in existing life sites and that we should address issues, including complexity, arising from variations in terms and conditions. That is why we set up the HSE. The report goes on to advise that we should improve ownership and governance. I have already stated that responsibility for this is with the national director of shared services for the health board. The report also recommends that we should have more management and information needs, identify requirements for transfer to shared services and agree steps for a transition to a single integrated HSE structure. That is precisely what is happening. In referring to the issues raised in the report, Deputy Kenny stopped when it came to the recommendations. They are in the same report and, if the Deputy turns over the page, he can read them. That is what is happening.

Mr. Kenny

It says it is a never ending project with nobody in charge.

The Taoiseach

We do need a unified system. It would have been great if the information technology experts working on this system had been able to get it right on day one.

Mr. Durkan

That is right — just like electronic voting.

The Taoiseach

They have completed a substantial part of the work and payrolls and rosters in six areas have been agreed. They ran into the fact that conditions, rosters and terms differed among health boards. In the old system, we did not even know how many people were working for the health boards.

Dr. Twomey

The Government still does not know.

Mr. McHugh

We do not know what they are doing either.

An Ceann Comhairle

Allow the Taoiseach to continue without interruption, please.

The Taoiseach

That is why we established the Health Service Executive, why we are now getting value for money and are able to implement a better programme and why this Government has been successful in developing a proper integrated health system——

Mr. J. O’Keeffe

The Government has only been successful at wasting money.

The Taoiseach

——that has reduced waiting times for patients, improved the numbers of day patients and has far more staff working on frontline services. It is another credit to this Government.

Mr. Durkan

If that is a credit, I am worried.

Mr. Rabbitte

I want to raise the case of the separated mother of two who faces the prospect of having €500,000 in costs pursued against her by the State in respect of a damages action she took over the sexual abuse she suffered while attending primary school. Deputies will recall that the principal of the school concerned was jailed after being found guilty of 21 charges of indecent assault from a sample of 380 counts relating to 21 girls. The State successfully sought to deny liability for the actions of the teacher, even though he was employed by the State. We now have a situation in which the woman, who was described by Mr. Justice de Valera as having suffered catastrophic injuries as a result of the unforgivable actions of a teacher, faces the seizure of her only asset, the family home.

This should be contrasted with the issue I raised yesterday with the Taoiseach regarding the more than €1,300 million in compensation paid out by the Government for the abuse of young people in residential institutions. The Taoiseach will recall that the State voluntarily agreed to pick up the charges and costs in cases to which it was not and could not have been a party. When I asked the Taoiseach why this decision was made, he said: "The Irish church does not have those resources." He also said he makes no apology for spending €1,300 million in taxpayers' money on discharging this liability when the State was not a party and could not have been made a party because the church did not have the resources. What about the woman who does not have resources, who was sexually abused and suffered catastrophic injuries and who now faces the seizure of her home to discharge costs of €500,000 because the State will not admit liability? By claiming the teacher was not its agent, the State pleaded successfully that it did not have liability and it is now pursuing the woman for the charges. Should not the same conditions be applied to that woman out of compassion as those applied in respect of the sloppy, secret and negligent deal conducted through Deputy Woods which the Taoiseach tried to justify?

The Taoiseach

I will address both issues. Obviously, I cannot comment on the circumstances of a case that is before the Supreme Court but, when the case concluded in the High Court last March, I made it clear that the Government had asked the State Claims Agency — the statutory body which deals with legal fees — to approach the issue of costs in a measured and sensitive way. The woman lost her case in the High Court and, because there was a large bill, I said we would do that. I understand the State Claims Agency told the lady's solicitor on the record at an early meeting that while some arrangements would have to made regarding costs there was no question whatsoever of her losing her house — so that does not arise. However, the lady's solicitor informed the agency that she intended to appeal the case to the Supreme Court, so obviously I could not go any further. If she did not want us to deal sympathetically and in a measured way with the issue at the end of the High Court case, but wished to proceed to the Supreme Court, as was her right, then I could do nothing. In any case the High Court has put a stay on the costs pending the termination of the Supreme Court appeal, so I can go no further in that.

On the second issue raised by the Deputy, 14,000 applications have been made by people in residential institutions to the redress board. These are vulnerable people who were in institutions, either sent there by the State or under joint authority by the State, which was jointly responsible. When seven years ago I gave the apology for how these people were treated, because their lives were ruined and destroyed, we said we would set up a redress board — the numbers have increased from the originally envisaged 6,500 to 7,000 cases — and to give these people awards of court. This was the right and humane thing to do. The State would have had to pay for these charges. In our view the State was responsible. They were State institutions or institutions run by religious to which the State sent these people. The State, in our view, is liable for that. The figures are higher, but we will not stop half way down and state we cannot pay the people involved. There was the deadline of last December which showed that we would have cumulative average awards of approximately €76,000 and legal and administrative costs of approximately 20%. We have paid those costs. I make no apology for paying those people to whom I made an apology and for whom we set up a redress system.

Mr. Rabbitte

That is not the issue. The issue is that if the Taoiseach sent out Deputy Woods to do this secret deal because the church did not have the resources, why does the same principle not apply in this case? In reply to a parliamentary question tabled by Deputy O'Sullivan, who raised the issue after the Taoiseach made his remarks about the measured response, the nice Minister for Education and Science replied as follows. This was in the case of the mother of two facing the costs of €500,000 and the loss of her home. The bossy Minister for Education and Science said:

The State has a responsibility to the taxpayer to fight cases where it knows it has a strong defence. In that context, it is also natural to seek an order for costs when it successfully defends a case.

That was the formal considered response written for her by her departmental officials and parroted faithfully here by the nice Minister for Education and Science after the Taoiseach's measured words.

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Rabbitte

What do his measured words amount to? Of course, the woman concerned has no choice but to appeal to the Supreme Court where the Government will claim in defence that it has no legal responsibility for the actions of teachers in such circumstances. However, here we have a circumstance where the Taoiseach believes on the one hand an organisation can cap its liability at £100 million for people abused in residential institutions with the State picking up the remaining €1.2 billion, while on the other hand in a case involving an individual citizen where the principal was jailed for sexual abuse——

An Ceann Comhairle

The Deputy's time has concluded.

Mr. Rabbitte

——where she received what was described by the judge as catastrophic injuries, the Minister with responsibility has said the costs will be prosecuted against her. In those circumstances it is not for the Taoiseach to say that her home is not at risk: that is not how the system works. If she is responsible for the €500,000 and that is her only asset, then her home is at risk.

The Taoiseach

They are two separate cases, as the Deputy knows. I am not responsible for the lady pursuing the case to the Supreme Court — that is her right, so I have no comment to make about that. However, when the issue arose following her High Court case I made it very clear on the record of this House that we had asked the State Claims Agency, the statutory body that deals with these cases, to approach the issues of costs in a measured and sensitive way. The issue today was that she would lose her house. I was putting on the record that the lady was told last spring on the record at a very early meeting that arrangements would have to be made regarding costs because she lost her case. There was no question whatsoever of her losing her house. The solicitor came back to advise that she would go to the Supreme Court, as is her right, so I cannot get involved. As I said, the High Court has put a stay on the costs order anyway, so the issue does not arise until the end of the Supreme Court stage. However, the house issue does not arise at all.

While I know the Deputy knows the answer, to avoid confusion let me say the State was liable jointly for children it took into care and that was the point. We were liable for that. If we were going to apologise to them, say we would compensate them and set up a redress board for them, the ultimate number was a matter for the independent redress board to look at the cases and decide whether we were liable and it was for us to pay them the costs. The Deputy can either agree or disagree with that. I know the Deputy believes we should have——

Mr. Rabbitte

The Taoiseach voluntarily agreed to discharge——

An Ceann Comhairle

Allow the Taoiseach to speak without interruption.

Mr. Rabbitte

——costs where the State was not a party and was subsequently made a party.

The Taoiseach

I am answering the Deputy's question. I was not going to get into a position of saying we would put a cap on the number of people who could enter the redress system or a cap on the money going out. We did not do that. These were people we were entitled to look after. We have all heard horror stories about these people and we need to be sincere about what we did.

Mr. J. O’Keeffe

The Government was trying to look after the woman too.

Ms O’Sullivan

What happened was horrific.

The Taoiseach

If I did not honour those commitments, I would have been in here week after week saying why I did not. The fact is I honoured the commitments and we will finish that process. The State is not liable for abuse by teachers or others — they are not State employees. In one case the State was liable jointly for children it took into care and in the other case it was not.

Mr. Rabbitte

Whose employees are they?

The Taoiseach

If Deputy Rabbitte is stating the State should have no responsibility to fight cases where it knows it has a strong defence, that would be an extraordinary thing for any state to do.

Mr. J. O’Keeffe

Who paid the teachers?

An Ceann Comhairle

Deputy Jim O'Keeffe is not even in the Labour Party. Allow the Taoiseach to speak without interruption.

The Taoiseach

I have made clear what we would try to do for this lady after the High Court case and I am not in a position to make any further comment on the matter until after the Supreme Court case.

Mr. McCormack

The Taoiseach might have a whip around.

Mr. Sargent

One of the worst inflationary pressures on individuals and families relates to house prices. The gap has widened hugely between personal disposable income and the price of a house, and is now at a ratio of 11:1. Will the Taoiseach take any corrective action on the matter? We have heard a number of announcements from the Taoiseach, the Minister for Finance, Deputy Cowen, and the Tánaiste all saying different things. The Taoiseach is on the record as saying people should buy, and would be foolish not to buy and listen to the naysayers as he calls them, although others might call them experts. Effectively the Taoiseach is talking up the housing market with his comments.

The Tánaiste has said the Government would abolish stamp duty, which has had a knock-on effect — he suggested the Government has so much money that it does not know what to do with it. The Minister for Finance said he would not interfere, despite all the property tax breaks that have certainly interfered with the market over the years. Will the Taoiseach make a clear statement of Government policy on the matter that will address the problems people are facing rather than having this Dutch auction politics, in which even Fine Gael has involved itself, trying to undercut each other with policies on stamp duty? Nothing will be done about house prices as a result of that. Any auctioneer will advise that there is a stalling of the market as it waits to ascertain whether any of these things will happen. Over the past two years my colleague, Deputy Boyle, the Green Party's finance spokesperson, has proposed targeted reforms to the stamp duty regime that would benefit older persons who wish to downsize — they should be facilitated — and people with disabilities who need to move house for accessibility reasons.

Mr. F. McGrath

Hear, hear.

Mr. Sargent

Will the Taoiseach implement these measured and targeted recommendations, which have been rejected by the Government? Has he given thought to the matter and what will he do to assist older persons and those with accessibility needs to obtain housing? Such assistance could represent a start in respect of reforms.

The Taoiseach

Our overall strategy is to increase housing supply to meet demand and to improve affordability, particularly for first-time buyers.

Mr. Sargent

What about older people?

The Taoiseach

We are investing heavily in infrastructure to deliver high levels of housing. One third of all the houses in the country have been built in the past nine years. We are putting greater focus on building active and successful communities through quality housing.

Ms Burton

But no schools.

The Taoiseach

The Deputy is six weeks too early for the financial statement for 2007.

Mr. Boyle

We have the pre-budget statement.

The Taoiseach

It will be released on this day in six weeks.

On the stamp duty issue, I appreciate the constructive comments made by Deputy Boyle and others and I am sure all of them will be considered. Stamp duty applies to a range of property and other transactions, as Deputy Sargent knows. These include residential and commercial transactions and also share dealings and bank levies.

The yield from stamp duty last year was in the region of €2.7 billion. The source of revenue makes a significant contribution to investment in public services, including health care and education. There is no stamp duty chargeable on owner-occupiers of new houses with a floor area less than 125 sq. m. First-time owner-occupiers are treated more favourably owing to changes the Minister for Finance, Deputy Cowen, made some years ago. When it comes to purchasing second-hand properties, they are exempt from stamp duty on houses worth up to €317,500 and they benefit from reduced rates on houses worth up to €635,000.

Approximately one third of all stamp duty comes from residential property — that is all. Recent comments, while not made by Deputy Sargent, imply that it all comes from residential property.

Mr. Boyle

The Taoiseach should look at his Cabinet, for God's sake.

Mr. Sargent

And his Tánaiste.

An Ceann Comhairle

Allow the Taoiseach to continue without interruption.

The Taoiseach

I am just trying to be helpful to Deputy Sargent. It is estimated that, in the current year, only €70 million of stamp duty, out of a total yield of €2.7 billion, will be from first-time buyers. The Government is always prepared to listen to arguments and debates but one should note that over one third of stamp duty on houses is derived from the more expensive upper end of the market.

I do not believe the Deputy is arguing for houses worth between €1 million and €2 million.

Mr. Sargent

They cost that.

The Taoiseach

The point is that, of the €2.7 billion received from stamp duty, only €70 million relates to first-time buyers. The case is not as it is sometimes presented.

Mr. Sargent

Most of the Taoiseach's reply, which alluded to building more houses, is probably good news for Paddy the Plasterer but it is not very good news for many house buyers. The reality is that the thresholds are meaningless in many parts of Dublin. One will not get a house for less than the thresholds. I understand the stamp duty take for this year is approximately €70 million in excess of expectations. The Government is raking it in.

About four months ago, I asked the Taoiseach about a similar matter, that is, the famous Report of the Committee on the Price of Building Land, which cost 27.5p in 1973. The committee reported to the then Minister for Local Government. The report was reviewed by the all-party committee in April 2004 and was still found to be necessary. I asked the Taoiseach about it because land prices comprise approximately 45% or 50% of house prices in the Dublin area. Basically builders are walking away with approximately €250,000 before foundations are even laid.

Will the Taoiseach do anything about this matter? When I asked him about it, he said he was and still is in favour of the Kenny report. I asked about the legislation and he said it was being drafted, that he was pressing to get on with it and that he did not agree with me. He said he would try to address the matter over the summer and that he was giving me a serious answer to a serious question. How serious was his answer? The summer is gone and we are still trying to deal with the difficulty posed by house prices. Will he implement properly the recommendations of which he stated he was in favour?

The Taoiseach

A number of points arise and there is no point in my going back over the stamp duty issues. On the Deputy's point that we are accruing far more than expected from stamp duty, I was pointing out where it comes from. It is not simply derived from residential property but from a range of sources.

The resources that accrue from stamp duty are used. Every year, we invest approximately €1 billion more in health care. We have invested €500 million in the capital programme for first and second level schools and the welfare package for this year amounted to €1 billion.

Mr. Sargent

I referred to house prices.

The Taoiseach

As I said at the outset, our policy has been to increase supply — we have done so. We used to build approximately 25,000 houses per year and we now build 80,000 per year. Affordability is a key issue for the Government. In fairness to the Government, it amended Part V of the Planning and Development Act and also launched the affordable housing initiative.

Mr. Cuffe

The Government filleted it.

The Taoiseach

All of these measures were designed to increase supply.

Mr. Sargent

Why did the Taoiseach scrap——

The Taoiseach

The latest programme, which pertains to the period 2007 to 2009, involves 27,000 affordable houses. Overall, the programme will meet the needs of 60,000 households in the various schemes in the social housing category.

We are proceeding with the proposed legislation concerning zoned land which developers hold for a period before selling. It is the key part of the Kenny inquiry and we are still proceeding with it. I still intend to bring in that legislation.

Mr. Sargent

When?

Mr. Cuffe

What did the Government do over the summer?