Vol. 758 No. 2
1Deputy Niall Collins asked the Minister for Communications; Energy and Natural Resources if he received a warning that the cuts he announced in the warmer homes better energy scheme would result in job losses; and if he will make a statement on the matter. [12920/12]
The Sustainable Energy Authority of Ireland, SEAI, administers the low income housing retrofit programme, Better Energy: Warmer Homes, on behalf of my Department. As I announced in the context of the budget, the Government has committed significant funding of €76.146 million to the wider better energy programme this year, of which €17.146 million is allocated to its Better Energy: Warmer Homes section.
The 2012 allocation of €76.146 million for the overall better energy programme, including Better Energy: Homes, is an overall decrease of 19% year on year. I was able to secure an additional €30 million from the jobs initiative last May. This figure, combined with the 2011 budget allocation of €60 million and €6 million in savings, brought the 2011 total to €96 million. This is a substantial allocation at a time of severe budgetary constraint and in the context of the overall reduction of €750 million which the Government had to make on capital expenditure in 2012. The programme continues to underpin significant economic activity, supporting at least 4,500 jobs and realising significant energy savings for households. The relative prioritisation accorded to the programme is a recognition of its economic, employment and environmental impact.
Grant levels for half the measures under Better Energy: Homes have been adjusted for 2012 in light of market developments and to ensure a better link between grant support and dwelling type. For instance, the reduction in the external wall insulation grant reflects increased price competitiveness in the market and the relative cost of undertaking this work on the various house types.
Additional information not given on the floor of the House.
Since the start of 2012, there has been a decrease in applications across all measures in Better Energy: Homes. The factors behind this trend are unclear and I have asked my Department and the SEAI to report urgently to me in the matter. For example, take-up of the external wall insulation measure has decreased by the least amount, despite the grant level for this activity being reduced by the highest amount. Nevertheless, I would be concerned by any adverse employment impact resulting from the adjustments in grants, while accepting that the scheme must be operated within the allocated budget in 2012.
It is difficult to assess the extent, if any, of job cuts on Better Energy: Warmer Homes as it has a smaller allocation than Better Energy: Homes and is primarily delivered by community-based organisations, of which 26 typically operate back-to-work schemes. In locations where no community based organisation is active, the SEAI ensures measures are delivered by private contractors who are appointed on the basis of a competitive tendering process. In this regard, an invitation to tender was recently published by the SEAI in the EU Journal to establish a new panel of contractors to augment the community-based organisation network. The procurement process will take a number of weeks to conclude and a panel should be in place in May.
This year will see a shift in focus in the Better Energy: Warmer Homes scheme to take account of the publication of the affordable energy strategy and the involvement of energy suppliers in meeting their energy savings targets agreed as part of their voluntary agreements with the SEAI. This new approach will see greater focus placed on introducing an area-based approach to low income housing retrofits. This will result in more opportunities for both community-based organisations and private contractors.
We all agree the scheme has been successful in terms of energy efficiency, securing savings in energy bills and reducing our carbon footprint. This is important in respect of climate change, which is another agenda on which we must focus. Will the Minister nail down the up-to-date position regarding the 2,000 additional jobs mooted as part of the jobs initiative? Is the sum of €30 million provided under the jobs initiative a once-off contribution to the better energy programme? Were the 2,000 jobs realised and, if not, how many jobs have been created under the scheme? Was the Minister warned, prior to the budget, of potential job losses if the budget for the scheme was reduced? Was this matter discussed?
The outturn figures for last year show that between 5,750 and 5,900 jobs were supported by the scheme. In other words, the 2,000 jobs promised under the jobs initiative materialised. Incidentally, I do not know if I should congratulate the Deputy or commiserate with him. Either way, my intentions are good. Unfortunately, as the Deputy indicates in the question, the allocation to the Better Energy: Homes scheme has been reduced owing to the overall reduction imposed on the Government by the memorandum of understanding. However, the allocation still compares favourably with the figure from the 2011 budget. While the latter provided €60 million for the scheme, the 2012 budget provides €76 million for the scheme. As Deputy Collins noted, I was able to secure an additional €30 million from the jobs initiative last year, and this boosted employment. It is our expectation that the scheme will support approximately 4,500 jobs this year. Whether this figure will be exceeded, I cannot say at this stage.
Information obtained under the Freedom of Information Act indicates the Department was warned by the Sustainable Energy Authority of Ireland that a budget of €71 million would sustain 4,000 jobs. It is critical to nail down the precise number of jobs that will be supported under a specific measure. The Minister indicated the total amount allocated to the scheme in 2011 was €96 million. Does this figure include money that was carried forward?
As to the advice given by the Sustainable Energy Authority of Ireland, which administers the scheme, its assessment of the €76.146 million is that it will create or sustain 4,500 jobs. That is the SEAI's advice as of today. Almost all of the budget for 2011 has been spent. The uptake, which was high in 2011, has decreased in the first two months of 2012. I have asked the SEAI to give me an analysis of this decline. Prices in the marketplace are more competitive and the scheme has been finessed as it has progressed. The idea was to kick-start awareness of the merits of energy efficiency, for all of the reasons Deputy Collins cited. However, whether as a result of the finessing of the grant levels, the exceptionally mild winter or some other reason, the figures are down, as the Deputy noted. I am not sure one can make a judgment on the basis of two months and I have asked the SEAI to report to me on the matter.
I remind the House that we have six minutes per question.
2Deputy Martin Ferris asked the Minister for Communications; Energy and Natural Resources the position regarding the proposed LNG project. [13109/12]
As Deputy Ferris knows, I have consistently welcomed the proposal by Shannon LNG to construct a liquefied natural gas, LNG, terminal near Ballylongford, County Kerry. Such a facility, together with the bringing onshore of Corrib gas would provide important security of gas supply for Ireland. I met the promoters of the project soon after taking office last year and both my Department and the Commission for Energy Regulation, CER, are in regular contact with Shannon LNG. The House will be aware from my replies to previous parliamentary questions of the meeting last December between the Taoiseach, the Minister for the Arts, Heritage and Gaeltacht Affairs, Deputy Deenihan, Deputy Spring and myself and company representatives from Shannon LNG and of the general discussion at that meeting.
The Commission for Energy Regulation has been engaged in an extensive consultation process on the matter over some time and has had considerable interaction with Shannon LNG and other stakeholders. Decisions on the regulatory treatment of the gas interconnectors and tariffing are statutorily a matter for the CER under the enactment of the Gas (Interim) (Regulation) Act 2002. The CER, as the independent energy regulator, is statutorily charged with a duty to protect energy consumers, ensure security of supply and support competitiveness. The regulator has a duty to ensure new sources of gas for the Irish market do not result in unwarranted increases in the price of gas to business or domestic consumers.
I fully acknowledge the complexity of the decision which the regulator must make and the need for various difficult balances to be struck. Together with all players and potential players in Ireland's gas market, Shannon LNG has a key commercial interest in the outcome of the regulator's ultimate decision on this complex regulatory question. Given the complexities, there are many different perspectives on this issue.
On 1 March the Commission for Energy Regulation held a further public forum for stakeholders. This followed publication on 17 February of its proposed decision paper on the issue of the regulatory treatment of the gas interconnectors. Stakeholders have a further opportunity to respond to the regulator by 16 March on the matters raised in the proposed decision paper. At the end of this period, the CER will assess all comments received and publish a final decision. I understand the regulator has indicated a decision will be made by the end of April.
As the Minister will be aware, this issue has been ongoing for more than 18 months. I do not know how many times I have tabled it as a Topical Issue Debate matter or raised it on the Order of Business. This is the second time I have raised it with him at Priority Question Time. He is also well aware of expectations in north Kerry which has been devastated by unemployment. The value of the project going ahead cannot be overstated. Communication seems to be a problem, which I cannot understand, given that on 21 December the Taoiseach said he would set up a meeting between Shannon LNG, the regulator and the Department. If we cannot get all of the stakeholders around the table, this issue will not be resolved.
A question, please.
I attended a meeting last Thursday morning which included a briefing session that involved the regulator. In answer to a question from the floor from one of the groups supporting the Shannon LNG project about who was responsible for policy, the regulator said he was. I assume policy is determined by elected representatives, not the regulator. Is it possible in the short term to facilitate a meeting between all of the stakeholders in order that this issue can be resolved to everybody's satisfaction?
I share the Deputy's view of the desirability of proceeding with a significant employment project in an area such as Ballylongford. I have, in so far as it is within my power, done everything to indicate why the Government wants to support and progress the project as quickly as it can. However, as I stated previously, we would have had a decision last October from the regulator whose task this is under statute if the promoters of the project had not decided for whatever reason to have recourse to the European Union. That has delayed the process. The consultation with stakeholders the Deputy has sought is under way as a result of the meeting held on 21 December to which he referred. All of the stakeholders were convened by the CER and invited to make submissions. They were further invited to make written or oral submissions before 16 March on the draft decision paper published. The regulator has promised to have a final decision by the end of April.
I still cannot understand why a person with the Minister's authority cannot convene a meeting of all the stakeholders around the table which is the only way he will resolve this issue. Making submissions is a delaying tactic that will push out the boat all the time. It is within the Minister's remit to convene such a meeting. If it happened, it would clear the muddy waters and people would be clearer. Will he pull the stakeholders together and initiate a meeting between the CER, the Department and Shannon LNG to resolve the issue?
I again draw the Deputy's attention to the statutory function and role of the regulator. On 1 March he convened a meeting of the stakeholders and everybody was invited to make a presentation. I refer to the article in today's edition of the Irish Examiner on this issue which deals with some of the complexities and pitfalls for the consumer and the national interest. It is being bruited in Kerry by the promoters that I can give a policy direction on the matter to the regulator. I want to make it clear that I can give a general policy direction, but I cannot intervene on behalf of, or in opposition to, a particular project.
Are the promoters in compliance with the policy direction of the regulator?
Yes, I believe they are and that we cannot anticipate-----
The Minister does not sound certain.
I cannot be certain until I hear the decision. The CER has not made the decision, but staff in the office have pledged that it will be made before the end of April. The last time we had such a meeting, they pledged that it would be made before the end of October and the company went to the European Union, which was regrettable because it delayed the process. I am as anxious as everybody else that the project be given the green light and that we proceed with it as soon as possible. However, there has been misrepresentation in the ether about who performs the various functions.
3Deputy Catherine Murphy asked the Minister for Communications; Energy and Natural Resources if he will elaborate on potential future changes to the public service broadcasting licence fee structure, particularly with reference to the introduction of a broadcasting charge; if he will make known figures relating to the use of online services which would fall under the definition of public service; if he will outline the way such figures might verifiably be used as part of any new funding system for the delivery of public service broadcasting, if possible; if he is considering differential rates in the new charge for domestic householders and commercial businesses; and if he will make a statement on the matter. [12634/12]
The programme for Government commits to examining the role and collection of the television licence fee in the light of existing and projected convergence of technologies and transforming the television licence into a household-based public broadcasting charge to be applied to all eligible households and applicable businesses, regardless of the device used to access content. In line with this commitment, my Department is examining both the effectiveness and efficiency of the existing model of television licence fee collection in the context of the changing technological environment. It is also examining the applicability to the situation in Ireland of various international models for the funding of public service broadcasting.
Although subject to evasion, the existing television licence fee system has provided a stable funding base for public service broadcasters. The rationale for providing State funding for public service broadcasting is to provide an independent and reliable income flow that allows these corporations to attain their public service objects, while ensuring they can maintain editorial independence. This is especially important in the context of news and current affairs.
The overall aim of public service broadcasting is to provide services and content which cater for all interests in society, while ensuring the varied elements of Irish culture and its intrinsic values are protected. Through the obligations placed on public service broadcasters and the criteria set for the funding of content through the sound and vision scheme, the production of quality indigenous programming and the production of minority interests can be assured. Whatever the system of funding, the rationale for providing funding will continue to apply and any changes that may be implemented on foot of the review must continue to provide a secure funding base for public service broadcasting and content, while also recognising the reality of new mechanisms to access such content and its pervasiveness in today's society.
Additional information not given on the floor of the House.
The principle underlying the proposal for the introduction of a public broadcasting charge on eligible households and applicable businesses is that publicly funded public service broadcasting is a public good and, as such, of benefit to society in general.
Publicly funded public service broadcasting services and content are now available to everyone on an ever-increasing range of platforms and devices - radio, television, smartphone, personal computer, laptop and many other devices - and access is not dependent on ownership of a device. In short, everyone benefits from the availability of these services, regardless of how content is accessed or relayed to the public. Therefore, the cost should be borne by society as a whole.
The replacement of the existing funding system based on the collection of television licence fees with one based on the imposition of a device-independent charge on eligible households and businesses is a complex process and much of the detail has yet to be worked out. In this regard, I can confirm that my Department is in the initial stages of developing proposals to engage independent consultants to assist in progressing this work in the coming year. At this point, however, as the charge will be device independent, the issue raised by the Deputy regarding the use of data relating to online services is of no particular relevance to the funding system or the manner in which charges might be applied. The charge will replace the current licence fee and all households and businesses will be subject to the charge, except for those specifically exempted. I can confirm that the question of differentiation between the charges to be imposed on households and businesses will be one of the issues to be considered by my Department as part of this process. However, the details of the precise approach have yet to be determined.
On the issue of exemptions under any new system put in place, this will have to be given detailed consideration when the type of model to be developed is agreed. That said, it is my expectation that the current exemptions relating to pensioners and those entitled to the household benefits package will continue to apply.
The programme for Government includes what the Minister has outlined. When is he likely to introduce enabling legislation? Is it likely to be this year? I refer to the scale of implementation of the charge. For example, people renew their television licences on a rolling basis. If a new charge were applied, would that be on an annualised basis?
I spoke on another occasion of consulting with the Department of the Environment, Community and Local Government about the use of a database. Is that the same database as the one used for the household charge? Section 14 of the relevant legislation allowed for the use of the database, or there was some discussion about the protocols with regard to the Data Protection Commissioner.
On previous occasions the Minister said the charge for the television licence might end up being less than it is at the moment. If that is the case, somebody else is coming into the mix. I understand people are viewing on different platforms and so on. Most companies, for example, will have a computer, but will not necessarily watch television. The charge the Minister is considering appears to capture businesses also. Will there be a differential in the charge for businesses and households, or does he envisage a single charge?
I do not envisage that any decision will be finalised this year, for a number of reasons. High among these is the objective of successfully managing the transition from analogue to digital television services by RTE. That is a big project, and RTE has put something like €70 million into building the system and general preparation. The termination of analogue signals across Europe and the move to digital terrestrial television is high on the list of priorities, and I do not see that being interfered with this year.
Deputy Murphy wanted to know whether the television licence charge would be lower. This is a dangerous business. I answered a question about whether it could be less by saying it could, but I did not say it would. We have not reached that stage yet. What I did say was that any public service broadcast charge will be a replacement of the existing television licence. This is not an additional charge or tax or levy. If we improve the efficacy of the collection system to avoid the loss of up to €30 million, one never knows. I might well surprise Deputy Murphy, as the amount conceivably could be less.
With regard to the distinction between business and domestic viewers, there are many anomalies in the existing system, one of which is the fact that only one television licence is needed for a 500-bed hotel, but if one has three cottages occupied for two months a year on the west coast - or a caravan, if that is one's choice - one must have a television licence for each of them. There are issues such as this that need to be ironed out to be fair to consumers.
It will be a new charge if somebody new has to pay it.
Most of us value public service broadcasting, and I acknowledge that it needs to be funded. There is major pressure on public service broadcasting due to the limited amount of advertising and so on. How extensive will the review be? Will it be a total review of broadcasting, taking into account not only internal but also external competition and dealing with the survival of public service broadcasting in the face of this?
The Deputy is right; unfortunately, advertising is limited, and I regret to say there is no particular sign at the moment that it is increasing. There is competition, also, from online advertising for a share of the traditional advertising market. That is a problem for the industry. The answer to the Deputy's question is that it will be an extensive, root-and-branch review because of the phenomenal and accelerating developments in the broadcasting sector. Viewers no longer rely on accessing public service content on traditional televisions. They may now access it through a number of different devices, and they do access public service content, although they may be reluctant to admit it. It does require an extensive review. The Deputy mentioned competition outside the jurisdiction. Obviously, there is online competition, but we must also compete with high-quality public service broadcasters in the neighbouring island. We will examine the overall situation.
4Deputy Niall Collins asked the Minister for Communications; Energy and Natural Resources if he completed an impact analysis of potential job losses on ESB or Bord Gais when they are part privatised; if he will publish same; and if he will make a statement on the matter. [12871/12]
The Government has decided that Bord Gáis Éireann's energy business and some of the ESB's non-strategic power generation capacity will be part of the assets disposal programme required by the memorandum of understanding. The Government has also reiterated its commitment to retaining the ESB as a vertically integrated utility in State ownership and to retaining the electricity and gas networks, as well as the two gas interconnectors and the east-west electricity interconnector, in State ownership. I do not envisage job losses in ESB or BGE as an inevitable outcome of the planned disposals. The proposed sales can deliver positive outcomes for Ireland's energy markets, for the two State utilities and their employees, for consumers and for business. The ESB will remain a strong strategic player, positioned more competitively in the all-island energy market and in due course in the integrated European market. BGE is a dynamic and successful company which has delivered real benefits for consumers as it has invested in and increased its power generation and energy supply. The sale of BGE's energy business will support this vibrant company and its employees in continuing to grow while enhancing competition in the energy market for the benefit of the economy and consumers.
The asset disposal programme will be implemented in an orderly process over time in a way that allows all policy regulatory and financial issues to be addressed in advance and that ensures full value for the State. It is important to emphasise that the Government has agreed with the troika that a proportion of the proceeds of the State assets programme can be used for reinvestment in support of employment and economic recovery.
Will the Minister let us know directly whether there has been an impact analysis? Most commentators have the opinion that full or part-privatisation effectively means potential job losses, because private investors seek a return on their investment. That must be planned for and factored into the strategy that the Government undertakes as part of this programme. We also need to debate further in this Chamber the fuller definition of strategic, as opposed to non-strategic, State assets. I will give the Minister an example which is not under his area of responsibility. Deputy Ferris and I are of the view that the Shannon-Heathrow landing slots under the stewardship of Aer Lingus are a strategic State asset for regional development in our part of the country, yet the Government seems to have taken a view that they are a non-strategic State asset.
In pursuing an agenda, it is not a matter of left-wing or right-wing policy; what is important is whether it is the right thing to do, socially and financially, for the country, bearing in mind the employees involved. Has the Minister carried out an impact analysis? If he has, can he publish it?
There are deficits in the pension funds of the aforementioned companies. How does the Minister propose to deal with this prior to embarking on this course of action? The deficits are significant.
If the Minister tries to sell these assets in a climate in which these deficits persist, he will secure a potentially depressed sale price or face an industrial relations issue as part of the sales process. I ask him to respond to these two specific items - the analysis of the impact on jobs and the pensions deficit.
I have not made any analysis of the impact on jobs and in advance of decisions being made I am not sure how one would do so. I have talked to management in the ESB and Bord Gáis and I am happy as a result of those discussions that part-privatisation of, say, Bord Gáis down the line, far from being likely to lead to job reductions, could lead to additional employment as additional investment by a private sector partner helped to grow the market.
The second matter raised by the Deputy - the pensions issue - is separate to be considered down the line in the two companies to which he referred. I am glad that the ESB has managed to get the support of its group of unions to refurbish the pensions scheme and done so imaginatively and creatively. Bord Gáis is well on the way to doing the same. These are immensely successful companies and there is no intention, as I have said time and again, of disposing of any part of them in inferior market conditions or in the current market environment.
5Deputy Martin Ferris asked the Minister for Communications; Energy and Natural Resources if he has received a report on the safety record of Balfour Beatty which has been awarded the maintenance contract for Bord Gáis; and if he will make a statement on the matter. [13108/12]
I have received two reports on the safety aspects of Bord Gáis's award of a contract to the Balfour Beatty-CLG joint venture. As I have no direct role or responsibility in a tender process or contract award by a commercial semi-State company, the focus of my scrutiny in this instance is to ensure both BGE and the Commission for Energy Regulation have carried out their duties appropriately and effectively and that their respective assessment processes have been robust.
I have received a report from Bord Gáis whose management and board have a legal and fiduciary responsibility to ensure compliance with both procurement and safety requirements. I have also received a report from the regulator which has the statutory responsibility of regulating the activities of natural gas undertakings with respect to safety. The Bord Gáis report advises that the safety incidents previously highlighted by the Deputy, some of which date back ten to 15 years, should be seen in the context of the scale of the Balfour Beatty Group which employs over 270,000 people and has 163 subsidiary companies. The report provides safety statistics for Balfour Beatty Utility Solutions and CLG Developments Limited which are the partner companies in the joint venture. Bord Gáis considers that these compare favourably to UK and Irish construction industry statistics. The report advises that following a rigorous assessment process, Bord Gáis is satisfied that the Balfour Beatty-CLG joint venture is fully qualified to undertake its obligations to the high safety standards demanded by Bord Gáis Networks.
The regulator's report advises that, following a detailed evaluation of the change to the Bord Gáis safety case on foot of the new network services and works contract, the regulator has accepted the change and that a further verification process is in place, including audits and inspections by the regulator, to ensure the change is managed effectively.
My officials are assessing both reports together, with additional clarifications subsequently received, and will forward their own assessment to me shortly. In the interim and as I have no direct responsibility in the award of the contract in this instance, I have asked Bord Gáis to write directly to the Deputy on the issues he has raised.
The last time I raised this issue with the Minister, he asked that I forward the evidence I had available, which I did. The Minister of State, Deputy O'Dowd, asked that I do the same and I also forwarded it to him and the regulator. I am not certain that enough attention has been given to the safety aspect of the matter. The Minister has mentioned that the issues I have raised date back ten years; some of them do, but I refer, in particular, to issues which arose in 2008 and 2009. In 2008 Balfour Beatty was fined £2.25 million sterling after it had been charged by the British Serious Fraud Squad and found guilty of false accounting. In 2009 it was fined £5.2 million sterling by the Office of Fair Trading for engaging in corrupt practices in securing construction contracts.
Will the Deputy, please, frame a question?
In the light of this how can Balfour Beatty be deemed to be in compliance when it is not in compliance with paragraph 3.9 of the Department of Finance's guidelines which reads: "Candidates or tenderers who have been convicted of involvement in organised crime, fraud, corruption or money laundering must be excluded from performing a public [service]"? How can Balfour Beatty be deemed to be in compliance in light of the convictions in 2008 and 2009?
We are talking about the serious issue of safety in the gas system. I have set out for the House the statutory responsibilities in that regard. I take the allegations made by the Deputy very seriously and acted on them after he had brought them to my attention when I last answered questions at Question Time. I have since received the two reports to which I referred, one from Bord Gáis and the other from the regulator whom I am not in a position to second guess. I have indicated why the regulator is satisfied that the company, despite the blemishes on its record, to which the Deputy referred, is competent, qualified and has a track record to deal with the functions allocated to it in this contract. It is a company which has 270,000 employees and 163 subsidiary companies. It operates and provides these services across Europe. That is the advice available to me and I have no reason to second guess the regulator in that regard.
I refer to the criminal conviction guidelines of the Department of Finance which provide that if somebody has been convicted of fraud, that person is precluded from participating in a public contract. It is clear that Balfour Beatty was fined £2.25 million sterling in 2008 after it had been charged by the British Serious Fraud Squad and found guilty of false accounting, yet it has now been awarded this contract. I understand all of this is the subject of a court case that is pending, but the guidelines of the Department of Finance do not allow a company with a fraud conviction to be awarded a public contract. Therefore, the awarding of the contract contradicts the guidelines. The Minister referred to safety and the number of employees in this group, but it has these convictions against it. There are convictions dating back ten or 12 years, but these were made in 2008 and 2009. I, therefore, ask the Minister to investigate the matter.
I do not know about the allegation of false accounting, but if the matter is still before the courts, we should let it make its decision. I repeat this is a transnational company which has 163 subsidiaries. I do not know if any of the persons involved in the false accounting alleged has anything to do with the company involved in the joint venture in the provision of services here, but on the question of false accounting - I have written to the Deputy about the other matters he raised with me-----
I raised that issue also.
I will pursue the question of false accounting.
