Vol. 762 No. 3
107Deputy Sean Fleming asked the Minister for Public Expenditure and Reform if he will ensure that the sale of State assets will not include the disposal of any assets of a company involved in the provision of water supply to households throughout the country; and if he will make a statement on the matter. [20542/12]
As the House will be aware, the Government decided last week that the new Irish water utility is to be an independent State-owned subsidiary of Bord Gáis Éireann. The new water utility is not and will not be included in the Government's programme of State asset disposals. The Government is committed to keeping it under State control.
Bord Gáis Éireann is an excellent example of a strong, vibrant and dynamic State company, which has demonstrated its capacity to invest and develop new, efficient and competitive business for the benefit of Irish consumers. In taking last week's decision, the Government's intention was that a number of key synergies would be achieved between the gas and the water utilities core network functions, such as operating in a regulated environment, network management, metering and utility operation systems. It is also important to note that these core functions will not be impacted by the sale of Bord Gáis Energy, the energy generation and supply business of Bord Gáis Éireann, which I previously announced as part of the Government's State asset disposal programme.
Perhaps the Minister did not get the gist of the purpose of my question. Earlier this year, on 22 February, the Minister announced the Government had decided to sell Bord Gáis Éireann's energy business. Be that as it may, we will not discuss whether it is a good idea in this debate. Subsequently, last week the Government decided in light of the experience and knowledge of Bord Gáis about metering, billing and dealing with hundreds and thousands of consumers throughout the country it should be given the job of dealing with the provision of water meters. In his opening comment the Minister-----
I ask the Deputy to frame a question please.
In his opening comment the Minister spoke about an independent subsidiary. These two words are mutually contradictory; a subsidiary is under something else and not independent by definition. Will the Minister accept that regardless of whether the Minister, Deputy Hogan, made a hames of his role in the proposed metering of water, he will be held responsible for the possible privatisation of water meters throughout Ireland because he, as Minister, has opted to give that business to a company, part of which Government has already decided to privatise? The Government has decided to sell-off part of Bord Gáis Éireann, BGE, and, because of its expertise in metering and billing households, to give it responsibility for the new water utility. Will the Minister accept that the public will find it hard not to view this as a key step along the road to privatisation, which I accept is not the Minister's intention at this stage? However, in light of this, I ask that the Government remove to Bord Gáis from its list of companies to be privatised.
No. Let me be crystal clear, the new State company, Irish Water, will, as far as the Government and I are concerned, be a wholly State owned company per omnia saecula saeculorum. This will be enshrined in specific legislation to be introduced. Irish Water will be a State company providing water in an integrated manner across the State. It is wholly different from the sale of the energy generating component of BGE. We want to keep the expertise that set up and developed BGE and to use it in setting up the next fine State company. Things are not set in aspic. The next major State company, the biggest since the ESB was founded, will be Irish Water. Bord Gáis Eireann, in terms of its level of expertise in managing a publicly owned company with a distribution, billing and metering system, has the management structure which the Government wants to roll out over time - it will be years before all of this is put in place properly - the new Irish Water company. That is the logic behind it.
The parallel issue of setting up competition within the energy sector, which the energy generating component of BGE will provide as competition for the wholly State owned ESB, will also be good for the consumer.
Will the Minister accept that the more he speaks the more he confuses the issue in the public mind? The Minister stated in his initial reply that Irish Water would be an independent subsidiary of Bord Gáis. In his subsequent reply he said it would be a wholly owned State company. It cannot be both. It must be one or the other. It will be owned by Bord Gáis, not the State.
The State owns Bord Gáis.
It does not own the shares in its subsidiary companies.
It does.
It does not, Bord Gáis owns them. The Minister should check company law. One does not own the assets of a company just because one owns a share in it. That is a fact. I again plead with the Minister to remove Bord Gáis from its list of companies to be part privatised by way of the sale of assets given it is the company to which the Government is giving the water metering and billing service in regard to the provision of water. The two services should not be combined in one company.
I thought earlier that the Deputy was just being inquisitive. I know now he is being mischievous. I will clarify the position again. Irish Water will be set up as a subsidiary of a wholly owned State company, namely, BGE. It will be wholly State owned. It is intended-----
BGE will be the parent company.
The State owns BGE and every aspect of it.
No. It owns a share of it.
Please allow the Minister to continue without interruption.
The Deputy is engaging in tautology. It is the Government's intention that the new Irish Water entity - this will be put in statute law and debated in the House - will be wholly State owned. Parallel to that, as part of the memorandum of understanding, we have looked at what non-strategic assets we could sell off. The Government has come to the conclusion that allowing for greater competition in the energy sector through the privatisation of the energy generating element of BGE, and for private competition to the wholly owned public entity, the ESB, which will remain as a vertically integrated wholly State company, will be good for the Irish consumer.
108Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he has brought to Cabinet the findings of his Department’s review of allowances and premium payments paid to public sector workers; and if he intends to make public these findings. [20540/12]
As the Deputy is aware from my previous replies, on 5 December last, during my address on the 2012 Expenditure Estimates, I announced that a review of allowances and premium payments would be carried out by my Department. This announcement was made on foot of a Government decision which requires the public service to take additional measures to deliver further efficiencies in 2012 and thereby ensure the pay bill targets which have been set are met, with a view to delivering additional pay savings in 2013 and subsequent years. The measures include a reduction of 10%, or approximately €40 million, in overtime payments in 2012. This is being achieved by means of a reduction in allocations for overtime by that amount. To date, my Department has received well over 800 business cases in respect of allowances and premium payments. As a result of resource constraints, the volume of submissions to be evaluated and the complexity and variance of allowances across all sectors, it has not been possible to complete the review in a short timeframe. Indeed, agencies and Departments are continuing to propose business cases and seek further explanations in advance of the completion of the review. I will bring proposals to the Government in relation to the findings of the review as soon as it has been completed. In the interim, urgent business case requests are being processed, in so far as possible, to ensure the work of the public service is not unduly disrupted by the review. The outcome of the review of particular allowances will be communicated to Departments and subsequently made public. I have indicated my expectation that further discussions with the relevant staff representative bodies will be required before we reach that point.
It is clear that the Minister does not believe allowances and premium payments fall under the definition of "pay" for the purposes of the Croke Park agreement. He will be aware that the public service unions take a different view. The teachers' unions - the TUI and the ASTI - and the Irish Nurses and Midwives Organisation have been quite trenchant in their defence of these payments as part and parcel of what is understood as "pay" for the purposes of the Croke Park agreement. I ask the Minister to clarify his view on that matter. Can he say whether any changes or cuts that might emerge from the review will apply solely to new entrants? Does he envisage that they would also apply to workers who are currently in employment?
The allowances cover an extraordinary range of entities across the public service and relate to many different issues. Some of them could quite reasonably be acknowledged as being part of core payments even though they are called "allowances". The Deputy will recall that last week, we debated a so-called allowance that is payable to a Minister of State. I regard that as a wage. There are analogies to that across the public service. Some of the allowances in question are historic. When the Deputy reads all 800 cases in due course, she will raise an eyebrow when she comes across some cases and she will wonder whether there is a place for them. The Deputy asked whether I regard these allowances and premiums as being part of core pay. In some instances, they are. In many instances, they are not. She also asked whether any changes will apply to new entrants only. By and large, they will apply to new entrants only. There might not be a sustainable business case in some instances. When I answered that question in exactly that fashion last week, a great deal of news print was devoted to what I had to say. It is clear that there is no longer a justification for some historic allowances. I will seek to address those in the current framework. The changes to most allowances will affect new entrants only.
The Minister should not forget the teachers.
The Minister referred to the additional payment of €17,000 that is made to "super-juniors". We have debated that matter. I repeat that I find it extraordinary that the Minister is standing over that payment-----
-----at a time when he is reviewing premium payments for other workers who are on far lower wages than the Ministers of State concerned.
I find the Minister's answer unsatisfactory. On the question of whether the allowances and premia are part of core pay, he stated "Yes" and "No". On the question of whether new entrants alone will be affected, he stated "Yes" and "No". The Minister undertook the review exercise not having consulted a broad range of people, including the unions. Perhaps the Department is still a little at sea in terms of processing. The Minister referred to tight resources and receiving business cases. Is this not a very messy response that he has given? Is it not a very messy process? Workers and their representative bodies would prefer a much more clear-cut answer in respect of whether and allowances constitute core pay. "Yes but no" is not a satisfactory answer. On the fundamental question of whether new entrants or workers across the board will be affected, I would have expected the Minister to have been in a position to answer in a much more straightforward way.
The Deputy has a propensity for reducing both complicated and simple issues to black-and-white responses of "Yes" or "No"; it suits the narrative. I could give the Deputy 800 answers because this is the number of individual allowances, some of which fall into the category of core pay and others of which patently do not. When we have finished the review of over 800 individual allowances, we will be able to answer all the questions. It is taking some time to do that. That it is messy to review all the allowances because it has not been done before does not mean the review should not be undertaken.
It should be undertaken in a coherent way.
The Minister should tell us about the teachers' allowance.
That is the point I am trying to make. This is the first review of all the allowances in God knows how many years, if ever. We are reviewing every sector of expenditure for the first time in my Department so we can determine objectively whether shoe allowances or others are proper and fit for purpose in 2012 and in the current economic climate. I will be making a discernment on that and will present it to the House for its views thereon in due course.
109Deputy Clare Daly asked the Minister for Public Expenditure and Reform his views on whether an emergency programme of necessary public works could put 100,000 persons to work on necessary infrastructure development within 2012. [11608/12]
Before this question can be considered, it is necessary to point out that the sort of capital works programme required to create 100,000 new construction jobs in a given year would require a minimum of €10 billion in expenditure on top of existing allocations, and such funding is just not available. While some of this may be recoverable in the form of tax receipts and reduced welfare costs, very significant costs to the Exchequer would remain. This would require us to reduce dramatically expenditure on the current side and institute additional taxes on a scale significantly above those already imposed.
The quantum of pain to ordinary people that this would involve would be extreme. Moreover, this approach ignores the significant improvements in our infrastructure that have been made to date, as attested to by the OECD. It is worth noting that, over the past decade, some €70 billion was invested in infrastructure and the productive sector. Judged by a range of measures, the quality and quantity of the country's stock of infrastructure has been considerably augmented in recent years.
Even were additional funding available, it is questionable whether such an approach would be feasible or the most effective means of creating new employment. Capital planning must be undertaken with meticulous attention to detail to ensure that the infrastructure being proposed meets a genuine social or economic demand that cannot be adequately met by the private sector and that, if the infrastructure is necessary, the project approach that provides the best outcomes, value for money and optimum return to the State is undertaken.
In regard to job creation, it is important to note that much of the capital programme for the next five years as laid out in the infrastructure and capital investment programme will be geared towards smaller, more labour-intensive projects. However, it is not necessarily the case that capital works programmes would provide the optimal job-creation approach. Infrastructure best serves the economy by aiding economic growth and generating sustainable jobs in the medium term, rather than by providing short-term employment in its construction phase.
Additional information not given on the floor of the House.
Capital investment in enterprise supports has the highest direct employment impact. Accordingly, the capital review undertaken last year made a point of protecting supports to the enterprise sector primarily through agencies such as Enterprise Ireland and the IDA. The unprecedented level of investment over the past few years and in 2012 delivered through the enterprise development agencies can foster sustainable and valuable employment in the exporting sectors of the economy which will be critical to recovery. While the overall capital envelope for 2012 has been reduced, we have held the level of capital allocation for the enterprise sector relative to the preceding period.
The Minister has given his answer to his colleagues in SIPTU who, precisely, are looking for a €10 billion investment programme in infrastructure in order to call for a "Yes" vote in the austerity treaty. I think the answer to the question is that it is possible. Such an investment of €10 billion would create-----
I think the Deputy is supposed to ask a question rather than answer one.
-----100,000 jobs in this sphere. The Minister seems to have mistaken "infrastructure" to mean solely construction projects even though the question did not ask that. It dealt with all aspects of infrastructure that could deal with the programme which is seriously necessary and which the Minister's colleague, the Minister for Social Protection, Deputy Burton, said will be delivered in terms of child care infrastructure and so on.
Will you frame a question please?
I would like the Minister to deal with that aspect and why he thought the question just related to construction when it did not and how he sees this fitting in with the treaty discussions.
The Deputy is quite wrong if she interpreted it as a rejection of the SIPTU line in regard to economic stimulus and not infrastructural spend. Its demand was for economic stimulus. I have met the presidents of SIPTU and the Irish Congress of Trade Unions on this matter.
Can I say very emphatically that Government policy has three strands? Certainly, we need to have a balanced budget by working towards a 3% deficit by 2015 as laid out in the Stability and Growth Pact. Equally, we recognise there is a need for a stimulus package and we have been working on ways to do that. It is important that a third of the proceeds of the sale of State assets will be involved in infrastructure and stimulus. At the instigation of the trade union movement, we have been engaged with the pension funds because we want to ensure more of the pension funds, which ordinary workers pay into, are expended in this economy. I have had direct discussions with the European Investment Bank and other international lenders. I have met with the vice president of the European Investment Bank and I have more meetings coming up.
I say all of this to give the Deputy the absolute assurance that we regard stimulus as a very important co-strategy to ensure we meet the targets of economic recovery we have laid out.
Sadly, the reality is the opposite. The Minister is presiding over an economy that is in a depression and he has not delivered any stimulus whatsoever.
Do not will us to fail.
The reality is that circumstances and resources exist in this country and necessary work and materials are in place which could, for example, deal with the archaic water mains infrastructure which could put tens of thousands of people to work repairing that network. In regard to the septic tank debacle, does the Minister think householders are going to solve that crisis on their own? It is a civil engineering matter. I mention areas in my constituency and Wavin pipes. The materials are there as are the workers but this Government has failed to match the two. Clearly, it is quite happy to preside over 0.5 million people on the dole.
I know the Deputy prefers to make speeches than ask questions even at Question Time. There are Deputies in this House who wish us to fail, which is shocking.
That is rubbish.
The constant down talking of our economy is not without its own consequence. We were bequeathed the most disastrous economic hand ever left to a Government. We have set out a strategy to get us to recovery. I have said to the Deputy that it cannot be done by balancing the budget alone, although that is an integral part which she has entirely ignored. We cannot continue to borrow €1.4 billion per month. There is only one borrower and it set out conditions on the terms of borrowing. The Deputy knows that because she is fully briefed in regard to these matters, but she wants to pretend life is otherwise.
However, the Deputy is right to the extent that we need stimulation of the economy as well, although not with magic money but with real money and that is why we have identified the National Pensions Reserve Fund and the pension funds which, hopefully, we can persuade or encourage to invest in this economy. We have established NewERA and the strategic investment fund as a precursor of a State investment bank. We are very much on the stimulus agenda and we will succeed in getting this economy right.
110Deputy Sean Fleming asked the Minister for Public Expenditure and Reform if he will he ensure, in relation to the sale of the valuable National Lottery licence by the State, that the issues highlighted in respect of the sale of the second mobile phone licence will not recur; if he will further ensure that no contact with Ministers by parties involved in the licence process will be permitted, that the sale process will be fully transparent in relation to tendering and rating of bids for the licence and all relevant documents will be published; that the licence process will include a requirement that the proportion of sales going to good causes and the prize fund and the retailers’ margin will be maintained at current levels by the successful bidder; and if he will make a statement on the matter. [20543/12]
As the Deputy is aware, I announced on 4 April that the Government had decided to hold a competition for the next national lottery licence. The licence will be for a 20-year period and will involve an upfront payment to the State with part of this payment being used to help fund the building of the new national children's hospital. No decision has yet been taken on the terms of the competition for the next licence. Before a competition can commence, the Government is committed to introducing primary legislation to revise the National Lottery Act 1986. My Department is carrying out the necessary preparatory work on that legislation.
The integrity of the process is a high priority and ongoing work is being led by officials in my Department. I stated in my announcement on 4 April that the ongoing provision of a fixed percentage of annual lottery turnover for good causes will be a legislative condition of the next licence. This percentage for good causes will be retained at 30.5% of lottery sales, which was the level that was achieved in 2011.
Regarding prizes, the National Lottery Act contains a provision that at least 40% of sales must be returned to players as prizes. I do not envisage this provision being changed.
Regarding retail outlets authorised to sell national lottery tickets, I am cognisant of the essential role retailers play in the operation of the lottery. I am also aware of the importance to retailers of income from the lottery, particularly in the present economic climate. The position of retailers will be taken into consideration in the context of the arrangements for the next lottery licence.
I thank the Minister. I acknowledge that he addressed the last portion of my question, namely, the per cent for good causes and prizes in the retailers' margin, but the essence of my question was different. When Fine Gael and Labour were last in government, one of their last actions was to issue the second mobile telephone licence. We all know that substantial issues were raised about the then Government's handling of that process. What measures will the Minister put in place to ensure something similar does not apply in this instance? I do not want to revisit the mobile telephone issue, as we all know what was involved.
The Minister stated that the bidding process will commence in October. Will he explain which external consultants will be employed to carry it out, how will it be done and will the lobbyist Bill be published prior to a final decision? In the interests of ensuring the integrity of the process, will the Government ensure that people tendering for it or those working on their behalf will not have access to Ministers through the front door, back door or pub door, whichever the case may be? Will the Minister reassure the House to this effect?
What about the last Government?
I have finished my question, Deputy.
Please, these are Priority Questions.
The Deputy makes a valid point of which I am cognisant. I want to ensure that any process involving my Department or the Government is transparent and has no external pressures or influences placed on it. I have issued a protocol to myself as well as to every senior official-----
Will the Minister issue it publicly?
Yes. I would have no difficulty with placing it on a website. The protocol relates to all of these matters. For example, I will not meet anyone - I have received calls from all over the place from people who want to see me or my advisers - in respect of these matters. There is one access point at arm's length for people who will advise others on how to go about the process. This will apply in the case of every sale of State assets, in that I will not be directly lobbied and I will not meet anyone regarding those matters. If people have something to say, they will talk in an open fashion to the people charged with handling their communications.
I am pleased to hear that and I would welcome the protocol's publication, which was news to me. Will the Minister consider the lobbyist Bill? During this process, which will last for 12 months or so, people who know people who know people will inevitably contact Ministers through various mechanisms, as occurred previously. We want to ensure that the scoring card by which the ultimate decision is made will be public and transparent so that there can be no allegations or suggestions that the card can be changed at the last moment.
I fully accept the Deputy's point. He is right and it is good to have this discussion at an early stage. It is my firm intention to achieve that. Regarding the register of lobbyists Bill, I am anxious that it proceed. There are a number of linked Bills. For example and as the Deputy knows, the detailed heads of the whistleblowers legislation are before the committee. I hope I will receive a response before the summer, but I do not know whether the committee has decided to hold hearings on it. The Freedom of Information Act amendment is proceeding and I hope to have it published by the end of the year. A great deal is happening on this front.
The registering of lobbyists is a difficult matter. Everybody lobbies to some extent and a considerable amount of legitimate lobbying is done by, for example, child care groups on child care and farmers on agricultural policy. As long as this is done in an upfront and transparent manner and there is no inducement of any description, it will be very good.
111Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform if he will consider taking responsibility for the collation of cross departmental data on increments paid across the public sector; and if he will make a statement on the matter. [20541/12]
My Department has access to detailed data on increments only in the Civil Service sector, for which I have direct responsibility. Detailed pay roll data for other public servants, including that for increments, are held and managed by individual public service employers. The availability of specific data on increments varies across those bodies. For example, detailed data on the cost of increments in the local authority sector is not currently available to the Department of the Environment, Community and Local Government as it covers 34 individual local authorities.
I have no plans for my Department to assume responsibility on an operational basis for the collation of pay roll data across the public service. Detailed data on increments are not currently available or readily accessible within the sectors. No specific financial provision is made to public service bodies in respect of increments because they are required to meet the cost within their overall pay allocations. As it is a matter for public service bodies to manage the cost of increments on an individual basis within their individual pay allocations, details are not sought for expenditure planning purposes and the information does not form part of the estimates process. However, the public service reform plan provides for a move to shared services across the public service and this will ensure greater accuracy of data and provide access to improved management information in real time. This is one of the many strategic benefits of shared services.
On increments generally, based on more detailed information recently requested by my Department on the total cost of increments in a full year in the various sectors, the estimated full year cost of increments in the public service excluding the local authority sector is estimated at no more than €180 million per annum and less than half that sum in 2012. Significantly reduced recruitment, the ongoing substantial fall in numbers of public servants and higher numbers reaching the maxima of scales have reduced the cost of increments. This cost will continue to fall over the coming years.
I tabled this question because the issue of increments has given rise to considerable public comment. In previous exchanges we established that cuts to or stoppage of increments would disproportionately affect people on lower incomes. I raise the issue not because I want the Minister to cut increments, but due to my astonishment at discovering that his Department does not possess the kind of data which I would have expected it to gather and which the chairperson of the Croke Park implementation body, P.J. Fitzpatrick, assumed it already possessed. It is important not only that the Department gather the data in question, but also that it become a repository for them.
The Minister should be able to take a bird's eye view. He cited the figures of €180 million globally and €90 million this year but he should have a more in-depth sense of what is going on. He recently announced his plans to establish a Government economic evaluation service with a staff of 20 to 30. If he is not going to be in the business of acquiring and storing detailed data and analysis on public sector pay, why does he want this unit? I asked him a direct question regarding whether he will assume responsibility for that kind of information. He appears to be saying "No" but I do not think that makes sense.
I agree with much of what the Deputy said. I am anxious to amass as much data on all public expenditure as possible. Bluntly, however, I was more than surprised - let me put it in a kind way - at the lack of overview of all public expenditure that resided in the former Department of Finance. Some of the detailed questions the Deputy raised over the past 12 months have helped to expose this issue. We are pulling all of that together but there is always a conflict between the total cost of implementing certain initiatives and the value one gets from them. As we move towards our objective of an integrated public service we have discovered all the various arrangements. For example the Deputy will have seen that arrangements for leave and sick pay vary across agencies and Departments. We will have a commonality about that and we are working might and main to do that. In the context of doing all that we will have a much more integrated overview of every issue including increments.
The Minister mentioned the issue of data on expenditure on local authority pay. It is astonishing that the Department of the Environment, Community and Local Government does not have that information. It is mind boggling particularly given that the Government has correctly placed such an emphasis on scrutinising expenditure. However, the Government cannot do that if there are big gaps in the information provided to it. Given that the Minister has been in his new Department for more than a year, I would have thought he would have insisted that the Department for the Environment, Community and Local Government would have access to that information and more to the point that he would have it. How can we have any rational debate on these matters when much of the time, the Department of Public Expenditure and Reform is working on guess work?
It would be very unfair to say we are working on guess work - we understand the full quantum of pay in the total sums. However, we do not have it disaggregated to the degree the Deputy feels we ought to have at a central level. There is always a divergence of view about devolution. We call it local government and not national government in a local setting. The local authorities have autonomy in a number of the functions they perform and they decide the specific skills they need in their own functional areas. Not every local authority is identical in the skill set required because obviously a predominantly rural local authority has a different skillset requirement than an urban one has. Consistent with proper oversight and ensuring proper value for money, I believe the Deputy is correct. However, we also need to balance that with ensuring a degree of autonomy at local level if we are to have local government worthy of that title.
