78 Deputy Catherine Byrne asked the Minister for Finance the pre-conditions he is setting before the Government will agree to give up its pay awards. [21867/08]
Vol. 656 No. 2
78 Deputy Catherine Byrne asked the Minister for Finance the pre-conditions he is setting before the Government will agree to give up its pay awards. [21867/08]
94 Deputy Róisín Shortall asked the Minister for Finance if, in view of the changing economic climate, the Government proposes to review its decision to accept substantial pay increases for Members of Cabinet, albeit on a deferred basis; and if he will make a statement on the matter. [21971/08]
I propose to take Questions Nos. 78 and 94 together.
As the Deputies are aware the Government decided that the increases recommended by the Review Body on Higher Remuneration in the Public Sector should be implemented for the generality of grades covered by the recommendations on the following phased basis: 5% from 14 September 2007, the date of the report, or where the total increase is less than 5%, the full increase from that date; half the balance from 1 September 2008; and the remaining balance from 1 March 2009.
However, the Government has already decided to defer implementation of the review body increases recommended for ministerial and parliamentary office holders and to phase them on the following basis: 4% of the increase from 1 September 2008, half the balance from 1 September 2009 and the remainder from 1 September 2010. On this basis the increases will not be applied in full until September 2010.
The Minister has not answered the question he was asked, which was whether he intended to set any preconditions before the Government would agree to give up the pay increases. Will the Minister set any preconditions? Does he share the Taoiseach's view that the increases should be surrendered if a satisfactory outcome is forthcoming from the national pay talks? What does he regard as a satisfactory outcome from the national pay deals that would trigger the surrendering of this pay increase? Will the decision to surrender some of this pay increase be confined to Ministers or will it apply also to senior public servants, who are due to receive further increases on 1 March next year, according to the schedule?
I have been considering this question since my appointment as Minister for Finance. The Taoiseach has made clear that the Government is prepared to review all increases in the context of the social partnership discussions that are under way. I do not want to pre-empt those discussions at this stage. I appreciate that the Deputy asked whether preconditions were being set. In my discussions about this with the Taoiseach I have not viewed it as a matter requiring preconditions but as a matter, as indicated by the Government through the Taoiseach, that is there for discussion in the context of the social partnership negotiations.
To clarify, will the Government surrender the pay increase regardless of the outcome or only if the outcome is within some range? Perhaps the Minister would clarify Government policy in this regard.
The Irish Congress of Trade Unions, IBEC and so on do not normally negotiate Ministers' pay, so it is up to the Minister to decide what is to be done. With whom will the Government sit down and negotiate? Will representatives of the Government sit down with David Begg? Will they negotiate will all three pillars within the social partnership? Will the Minister clarify what the policy is?
I recognise the considerable public disquiet surrounding these pay increases. They were determined, as the Deputy knows, by a group——
Why not just surrender them?
They were determined based on an exercise of comparison with the private sector. I know from discussions with finance Ministers from other countries that there is grave concern in many European countries about the high levels of remuneration with which senior private executives are awarding themselves. In that context, I agree with the position of the Taoiseach and the Government that we are prepared to review this matter in the context of these discussions, which I do not want to pre-empt. In any event, when participating in discussions of this type, it is not wise to indicate what one will do. One does not go into discussions or negotiations after indicating what one intends to do anyway.
Who will the Minister discuss it with?
I will not indicate at this stage what I intend to do.
We will receive more Exchequer figures this afternoon — the Minister probably knows them already — which may not be any better than those for the first five months of the year. In view of the state the economy is now drifting into and the current pandemic of uncertainty, and from the point of view of the moral authority of the Government, should it not bin these pay rises now?
The process for determining Ministers' pay rises should be handed over to the system that governs the pay of TDs, so that they are within the public sector process. Does the Minister agree that in view of the culture of greed with regard to bonuses which has so infected the international private banking sector, determining Ministers' salaries by comparison with the private sector whose workers are immersed in the bonus culture, does not make sense? That is why the moral authority of the Government is in danger. Why does the Government not just give up these increases and provide moral leadership and authority on this issue? The level of these pay increases is totally unjustified.
Two or three issues arise from the Deputy's question. I agree with her that the bonus payments, characterised by some payments in senior banking positions, are deplorable. That these increases are occurring in international financial markets is a cause of common concern among many European Finance Ministers.
Concerning the comparators used by the body in question, the review and benchmarking bodies compared public sector jobs with jobs of equal value in the private sector, but not necessarily senior executives in banks. The review body found that the salaries of many senior public service posts — we will leave Ministers out of the equation for the moment — were below private sector levels even when allowance was made for the value of pensions. It was on this basis and in respect of the lower quartile of the private sector rates that the commission worked.
At this stage, I am not prepared to be more definitive concerning the Government's position because it is important that the negotiations on social partnership should occur between the relevant partners. The Taoiseach has made clear that the matter has been placed on the agenda. This is as much as I can state at this stage.
Regarding Ministers' positions, Deputies have an arrangement whereby their increases are made automatically because they are linked with a particular grade in the public service.
Ministers have no such linkage and are consequently in an impossible position constitutionally and politically.
I will make two brief points. Today, the OECD issued a report on Europe's economic indicators. In Ireland, it singled out the ongoing pay talks and pay restraints. This is like déjà vu because I also asked the Minister’s predecessor whether he believed that telling people to have pay restraints on the one hand while, one the other, Ministers are accepting pay rises above the average industrial wage was hypocritical. Does the Minister believe he is entitled to be paid more than the Secretary of the Treasury in the US?
I am sure the House will get an answer to that.
I have made it clear that the Taoiseach has placed this matter on the agenda of the public social partnership talks. I am not prepared to go beyond that this afternoon. The Taoiseach has made it clear that the matter will be subject to further discussion and that issues have not been finalised in that regard.
Unlike the pay talks, the Ministers' wages are already determined. They should lead by example and have the moral authority to stand up and say——
Does the Deputy have a question?
I am telling the Minister that, effectively, it stands to reason——
That is not in order, this is Question Time.
It sounds as if the Cabinet has gone in like a negotiating group with a shop steward at its shoulder and told people that Ministers should get a certain amount. The salary increases are unacceptable to most people. The increases would be difficult to justify at any time, but they are almost impossible to justify given the economy's difficult situation. Where is the Minister for Finance's leadership? Yesterday, he told people — we will not use the "W" word again — that they should show restraint in their comments.
The Deputy can use it if she wishes.
I will not.
Will the Deputy put her question to the Minister?
He is giving the impression that, somehow or other, the Cabinet has, as an adjunct to the pay talks, participated so that it can negotiate a bit for itself. This would not be acceptable, as the Government must show moral authority.
Does the Deputy have a question?
Why will the Government not forgo the increases?
The Government is entitled to be paid——
I did not intend to prohibit Deputy Burton from using that word, but I will prohibit myself from using it in future.
Is the Minister withdrawing it?
Entering the talks, it is neither my frame of mind nor the Taoiseach's that this item is on the agenda because we want to justify the increase.
Is it the Government's position that, in future, the setting of ministerial pay will be a matter for the social partners or will it continue to be a decision by the Government and an order of the House? If the latter remains to be the case, it is up to the Ministers to decide not to take it. It is not up to Mr. David Begg, Mr. Turlough O'Sullivan or anyone else sitting around the table, as it is not their role. It is up to the Ministers to show leadership and say that they will not take the increases because the economy could not take it and to do so would be inappropriate.
Is that a question?
That is a question.
It was decided to defer it for a substantial period and the questions the Deputies raise are not simply of relevance to Ministers but concern a substantial category of senior public servants as well.
Does the Minister believe the senior civil servants in question are entitled to those increases while people on the lowest rungs of the civil service are barely earning €400 gross a week? We live in the real world.
79 Deputy Tom Hayes asked the Minister for Finance if he plans to alter the decentralisation programme in any respect. [21904/08]
84 Deputy Brian O’Shea asked the Minister for Finance if he has plans for a review of the programme of decentralisation; and if he will make a statement on the matter. [21961/08]
139 Deputy Denis Naughten asked the Minister for Finance the timetable for completion of decentralisation of Government Departments; and if he will make a statement on the matter. [19793/08]
I propose to take Questions Nos. 79, 84 and 139 together. The programme for government states that the Government will continue to move ahead with decentralisation and ensure that no public servant is obliged to accept decentralisation against his or her wishes and that promotion opportunities remain available.
I have no plans to review the programme and I am confident the public service will deliver this programme in a considered, sensible and sensitive manner. My colleague, the Minister for Transport, has advised the Government of some administrative changes to the programme in relation to functions under his aegis. These changes will not impact on the overall number of posts for any location.
The October report from the Decentralisation Implementation Group, DIG, which can be accessed at http://www.decentralisation.gov.ie, provides the OPW time frames for the expected completion of permanent accommodation at that time. The DIG is currently updating the position on property with the OPW and early indications are that there are now likely to be some shifts in the completion dates for permanent accommodation caused by property selection and acquisition issues, brief and design issues, tendering periods, planning issues and contractual arrangements.
Examination of the position in regard to progressing the relocation of the State Agencies is under way and I expect a report on this matter later in the summer. I understand there will also be an update on the time frames for the programme generally at that time.
I confirm that the Government has recently asked the implementation group of Secretaries General to deal with the governmental and cross-departmental issues arising from decentralisation of the headquarters of Departments and the need to provide facilities for Ministers, Ministers of State and officials while in Dublin on business. A sub-group of the implementation group has been established to progress these issues.
Is the ostrich the bird that sticks its head in the sand and ignores what is going on around it? What progress has there been with regard to State agencies after four years? It is virtually zero. Is it not the case that ICTU has indicated that if there is no review of decentralisation in the context of the OECD report its unions will not co-operate with the transfer of State agencies? The OECD found that the Government's failure to create any opportunity for mobility between agencies four years into the decentralisation programme is totally undermining it as a tool for delivery of effective public services. What is the Minister's reaction to this? When will the penny drop that the Government must change its attitude and begin to deliver real change for people? If it is to go ahead with decentralisation the programme must be practical and provide improvements unlike the way in which it is administered at present.
Is the Minister not aware, being Dublin-based, just how crazy some of the situations are for his own constituents? Will he answer the wake-up call and allow us to have a sensible debate on this and work out something that is feasible?
Deputy Bruton raised several issues. First, the progress report was published by my predecessor last October and at that stage the decentralisation implementation group was of the opinion that the programme is progressing satisfactorily. The time frames are, of their nature, indicative and subject to a number of variables. I made it clear in my answer that there has been some slippage regarding them. Planning for a substantial amount of decentralisation and its implementation are well under way.
I asked a supplementary question.
The Deputy asked whether it was the case that there has been no decentralisation. There has been.
Of State agencies.
I beg the Deputy's pardon. There have been considerable difficulties with regard to State agencies but these represent a very small proportion of the total number of posts to be decentralised. Negotiations with ICTU are ongoing and the Government is attempting to work through the issues in question with congress.
The Deputy mentioned criticism contained in the OECD report. That, again, has been referred to the implementation group of Secretaries General for consideration.
The Minister is responsible for this programme and so is his Government. He cannot outsource it to an implementation commission and then tell us that if that group is happy then so is he. The Minister's predecessor said there would be delivery of decentralisation within three years or, if not, Ministers would deserve to be sacked. They are not sacked, the programme has not been delivered and the Minister is sticking his head in the sand and pretending that everything is going swimmingly. It is not and it is time the Minister and his office woke up and made some changes.
When the implementation group revert to me I will take decisions on the matter.
I wish to ask the Minister——
That is the problem. The Minister outsources programmes and then ignores his responsibilities.
The senior officers of the State work to Ministers as a collective body. Advice is sought from them on occasion and then one acts——
The Minister refuses to act.
One acts on that advice if it is appropriate.
The Minister refuses to take any responsibility in this House.
I remind the Minister that the word "quango" means a "quasi-autonomous non-governmental organisation". From his answer, it appears that decentralisation will be decided upon by such a body. The implementation group is, effectively, a quango which will report back to the Minister.
The Labour Party has asked, on an all-party basis — I believe Fine Gael has agreed — that there would be a complete audit and review of the standing of the decentralisation programme. There is a large element of agreement among the parties in this House that decentralisation, properly managed, can be good for the economy. The shambles we have, however, is extremely costly. It was affordable when the Celtic Tiger era was at its peak and money could be blown hither and thither.
The Minister spoke about the necessity for people to make judicious assessments of spending. Completion of decentralisation is conservatively estimated to cost some billions of euro extra. Will the Minister review the programme on an all-party basis so that there can be value for money? That would be true decentralisation rather than the re-location proposed in the Minister's programme.
Deputy Burton raised a vast range of issues. When I receive the relevant reports I will examine them with care. However, decentralisation is Government policy. The implementation group is simply that, a group to implement the programme. There has been some slippage in meeting targets but a substantial amount of decentralisation has taken place.
The issue of decentralisation of powers mentioned by Deputy Burton is a much wider issue because it concerns local government. The question of decentralising as many public servants as possible in different locations of Ireland in accordance with the plan is under way and will be continued. I was surprised Deputy Burton suggested that the Government should abandon the programme.
I said that it should be reviewed.
The review seemed to be pointing——
The Minister should not put words in my mouth.
The review seemed to point towards an abandonment because it referred to the cost of constructing buildings in the current climate.
The Minister told the House the whingers would have to cut back on the cost. He spoke about value for money and I reiterate his point. He said that costs must be examined. Is he now saying this is not necessary?
As recommendations come back, I will examine them. The Government made a decision regarding decentralisation and I assure the House that decision stands——
The cost does not matter then.
——and the function of the implementation group is to implement it. Any cost arising from decentralisation must be appraised and will be judged on strict value for money terms, as every project related to it to date has been judged.
This programme was introduced by one of the Minister's predecessors in 2003. It was nothing more than a budget gimmick that was rushed in, with a lack of planning. Various OECD reports show there has been no planning. The Minister is the person responsible.
Does he accept the decision was rushed and was a budget gimmick? Does he accept he is the Minister responsible? Does he accept that, to date, only 120 posts have been decentralised so far this year? Less than 20% of all posts overall have been decentralised. The programme was supposed to have been finalised by the end of 2006 and nearly two years later it is still unfinished. Will the Minister bring an all-party approach to bear so a proper structure can be put to the decentralisation programme?
Regarding the second question I accept I am the responsible Minister. Deputy O'Donnell expressed concern on the one hand that the decision was rushed and on the other that decentralisation was not happening fast enough.
I said it was rushed.
The Deputy cannot have it both ways.
It is now some four and a half years later.
The view of the implementation group is that it is proceeding satisfactorily.
Less than 20% of the plan has been implemented. Does the Minister seriously believe this is happening at an appropriate pace? The Minister's predecessor, Mr. Charlie McCreevy, said that heads should roll if decentralisation did not happen by the end of 2006. At present less than 20% of posts have been decentralised. There are 20 offices from a total of 56 yet to move to the proposed locations. Less than 50% of the staff which have decentralised have come from Dublin. What is the Minister going to do about this?
Perhaps the Minister for Finance can include the rate of decentralisation in the response to Deputy Morgan's question.
The planning of decentralisation was——
I would not expect——
The Minister should answer the question. What is he going to do about it?
I call Deputy Arthur Morgan.
The Minister is rolling his eyes when he should be rolling his head.
I would not expect the Minister for Finance to admit the decentralisation process is a mess and sitting high and dry. Does the new Minister for Finance accept that — none of us would see it as a shame or a disgrace if the Minister was to take a practical view — relocating An Bord Iascaigh Mhara to Clonakilty is simply a non-starter? Will the Minister accept there is a fresh opportunity to agree, ideally on an all-party basis, real decentralisation and the best way to roll it out?
I am not convinced of the merits of an all-party approach as I am not convinced such a process would secure agreement on the way to proceed.
Is the Minister going to take responsibility and do something about this?
I will take responsibility. If there has been some delay in the progress of decentralisation——
It is not simply some delay, it is four and half years late.
The delay is due to the myriad of issues involving staffing, property acquisition, planning and so on which arise in an exercise of this character. It was wise to be ambitious——
What is the Minister going to do about it?
However, it is wiser to ensure decentralisation takes place in accordance with the wishes of staff and involving buildings constructed on the basis of value for money and proper contract procedures.
That is a waffley answer.
We are no longer dealing with priority questions.
That is correct and the reason anybody can take a shot.
I did not realise that until now.
80 Deputy Arthur Morgan asked the Minister for Finance if he will review public private partnerships as a method of financing public projects; and if he will support a full review of the use of PPPs by the Comptroller and Auditor General. [21934/08]
The Government remains committed to the use of the public private partnership process as a viable Government option for appropriate projects within the overall parameters set out for public investment in infrastructure and public services.
PPP procurement is one option to be used alongside traditional approaches for the delivery of public investment projects. In choosing to adopt the PPP approach for a particular project Departments and agencies must assess, in conjunction with their advisors, the optimum model to use in the prevailing circumstances. There is a wide variety of possible PPP models provided for in legislation and elaborated on in central guidance issued by my Department. Within these models the form of the arrangement entered into would be specific to each project.
The approach offers several advantages which I outlined in an earlier answer. A summary list of PPP projects is available on the public private partnership website —www.ppp.gov.ie. This list includes 73 projects each of which has an estimated capital value over €20 million, which Departments and agencies advise have reached various stages of the PPP appraisal and procurement process. A total of 13 projects are operational and 15 are in construction. In addition, the Department of the Environment, Heritage and Local Government advises there are over 100 projects in the local government sector with a capital value of less than €20 million that are progressing as PPPs.
For specific projects, the Department has the same role in public private partnership projects as it does in capital investment projects generally. Based on Government policy, the Department of Finance sets the overall capital investment framework and the basic principles to be observed for the appraisal, assessment, procurement and evaluation of projects. Individual Ministers are responsible for the projects and programme in their areas, within that overall framework.
I agree with the earlier comment from the Acting Chairman that a full debate on this issue is appropriate, but I will not attempt to have such a debate during Oral Questions. Is the Minister confident that public private partnerships represent value for money for taxpayers, especially given the contracting public finances? Will the Minister support a review of PPPs by the Comptroller and Auditor General? I accept the Minister said in his reply that the Government remains committed to PPPs. It is possible to take this view while at the same time support a review of the process, whatever models are employed, to ensure that such models are effective. Does the Minister for Finance agree that under the current public private partnership arrangements, it appears the private sector incurs a low risk?
The Comptroller and Auditor General spoke to the Committee of Public Accounts on this matter on 17 April and he emphasised that it is not the case that PPPs are good and traditional procurement is bad, or vice versa, rather that certain situations are more suitable to a PPP solution. The Comptroller and Auditor General also noted that there are many different types of PPP and he specifically drew attention to the expertise of the National Development Finance Agency as crucial in that regard and I agree with his view. There are certain projects which are appropriate for the PPP model.
Regarding the relative allocation of risk and whether such arrangements represent value for money, I accept such projects are value for money in certain circumstances as the Comptroller and Auditor General recognised, for the many reasons I have set out in my earlier reply.
I know the Minister for Finance is eager to see the delivery of the NDP in full, in budget and on time. Does the Minister believe the €2.2 billion allocation for public private partnership projects for 2009 will be delivered in budget and on time? Does the Minister share the view of the Comptroller and Auditor General that there needs to be more transparency in this process, especially for the House which is ultimately responsible for the guardianship of public money?
I have no difficulty subject to the necessary caution that sensitive commercial information cannot always be disclosed in the House, which is one of the difficulties in ensuring full accountability in this area. I accept there is a difficulty here. However, the envisaged investments through PPPs next year are important. One of the advantages of the PPP arrangement is the rigorous assessment process which the State agency involved conducts in regard to the PPP. This often leads to considerable delays at the beginning of the PPP.
Are we on schedule to deliver €2.2 billion next year?
I am reluctant to sign off in blood on an item I have not yet examined. However, I am not aware of any circumstances which would prevent it.
The Minister for Finance said in response to the earlier question on PPPs and Dublin City Council and McNamara Construction's pulling out of several projects, that only one of those was the subject of a tight legal framework. I understood that at least two of those projects had been subject to contractual commitments——
It is too late to raise this matter now.
It is important that the Minister for Finance clarify this matter.
It is not possible as we are out of time. We are moving onto question No. 81 and we will try to finish before 3.45 p.m.
Is the Minister saying——
Am I not entitled to ask a supplementary question?
No, it was not a priority question and the Deputy has had his say.
Can I even ask a brief supplementary question?
No, not even a brief supplementary question.
I would like to assist the Deputy, but I must observe the rules of the House.
We are moving on to an interesting question.
I understood the Chair was not entitled to a personal opinion.
This Chairman is.
81 Deputy Shane McEntee asked the Minister for Finance if he has ruled any recommendations in or out from the OECD report on public service reform which has been passed to a new committee for consideration. [21913/08]
I welcome the OECD review as a major contribution to the ongoing modernisation of the public service. When the Government initiated the OECD review, it requested that our public service be benchmarked against those of other comparable countries and that recommendations be made for the future direction of public service reform. We wanted to know how the decisions the Government is making are translating into services for the citizen and how this can be improved.
The OECD review includes many positive observations on the public service. It acknowledges the central role played by the public service in contributing to an economic success story that many OECD countries would like to emulate. It recognises we are on a sound trajectory of modernisation but argues that we could further improve the yield from reforms by renewing focus on their pace and sequencing to make them more mutually reinforcing.
I agree with the OECD that there is a compelling need to adopt a more citizen-centred approach. There must be an increased focus on service delivery over internal reforms and a shift in emphasis from organisational inputs to outcomes for the citizen. The modernisation process must deliver to the user results that are clear, useful and verifiable. We must have public services with citizens at the centre.
The Taoiseach recently announced the establishment of a task force to develop an action plan for the public service. This group has been asked to prepare a comprehensive framework for renewal of the public service which takes account of the analysis and conclusions of the OECD report, as well as the lessons to be drawn from the strategic management initiative, the organisational review programme and the efficiency review process. The task force has been asked to complete its work by the end of the summer. That work will inform the next phase of the modernisation process. I look forward to the report.
The question was whether any of the OECD's recommendations have been ruled in or out. The Minister has not answered the question. Instead of reading the question, the officials who draft the replies simply seem to offer a response to another question.
The reply was taken from the top shelf.
Ministers and Secretaries General will be loath to agree to a pay settlement linked to performance. The Minister will encourage change in that regard. Will he also encourage change in the Estimates process, which has come under criticism from the OECD and elsewhere? Last week, unfortunately, he indicated that he had no intention of introducing such change. Will the decentralisation programme, which is a crazy undertaking in some of its aspects, be subject to change if it is so recommended?
The manner in which the Department of Finance manages agencies — by controlling staff numbers, grades and pay — has been highly criticised in the OECD report. Is that up for review under the current process? Will there be a review of the way in which quangos are established? As colleagues have pointed out, the establishment of 16 new quangos is envisaged under the Government's legislative programme. Will we see effective change in the way we deliberate on such issues or will this report, like many of its predecessors in the area of public service reform, vanish into history having produced no significant change?
The Deputy asked several questions. First, nothing is ruled in or out on foot of the OECD report. That is the answer to the question tabled. Deputy Bruton is correct that the answer given rather adroitly avoided dealing precisely with that issue.
I prefer to use the word "agencies" rather than "quangos". More than 800 such entities were identified in the report. There is certainly a need to review this number and the scope of their functions, with a view to reform. The Fine Gael Party published a document on this some time ago. I would appreciate if Deputy Bruton were to forward me a list of those bodies he considers should be curtailed, abolished or merged with other agencies. I will take his views into account.
Important considerations arise in regard to the traditional control the Department of Finance has raised over establishments in the public service. It is my considered view that the Department must control the size of those establishments, because that control is an essential weapon in maintaining the control over current expenditure which Deputy Bruton often extols. There is undoubtedly a difficulty in that the requirements on agencies have been more relaxed than those on line Departments, with the result that the latter have sometimes found it difficult to recruit.
The OECD report puts forward the view that our tax take will fall substantially, perhaps to as low as 38% in volume terms and that there must therefore be reform within the Civil Service to obtain better value for money. The necessary changes relate not only to the agencies to which the Minister referred. There is another difficulty in that Departments do not know the numbers of staff in some of the agencies under their remit. For example, the OECD report observed that the Department of Education and Science is not aware of the number of prefabricated buildings in use in schools throughout the State.
Does the Minister intend to take a hands-on approach to ensure that civil servants in the relevant Departments know how many people work in the devolved agencies, how many prefabricated school buildings are in use, how many patients are waiting on trolleys and so on? Does the Minister agree it is a shame to have so many highly paid senior civil servants, some earning more than €250,000 per year, who cannot provide this type of information? How does the Minister propose to manage Civil Service reform?
I share the concerns outlined in the OECD report. That is why the Government has established a task force to consider what reforms can be introduced on the basis of the conclusions drawn in the report.