Dáil Éireann debate -
Tuesday, 5 Feb 2013

Vol. 791 No. 1

Topical Issue Debate

Public Procurement Tenders

Deputy John Lyons

I thank the Ceann Comhairle for the opportunity to speak on this matter and the Minister of State, Deputy Brian Hayes, for attending. The issue I propose is the use of social clauses in public procurement contracts, including quotas to employ jobseekers who are long-term unemployed. As the Minister of State may be aware, I published a social clause Bill late last year and have met a number of experienced professionals who have drafted social clauses into contracts. This is an issue in which I have a strong interest as, being a resident of and a representative for Ballymun, I have seen how significant public expenditure in areas can transform the physical environment without fully addressing the issues of long-term unemployment. In the short time available, I want to look at how to use public contracts for infrastructure, such as schools and retrofitting, to help the long-term unemployed back in to work. I also want to suggest some ways to overcome some of the issues in implementing these clauses based on Irish examples.

The number of long-term claimants on the live register in January 2013 was just under 190,000, approximately two thirds of whom being men who mainly used work in the construction sector. As we all will be aware, this is a structural unemployment issue. As well as retraining options, we need to maximise the employment opportunities for those jobseekers from public spending in the economy.

I listened with interest to the Minister of State's discussion on social clauses in recent weeks and his support for examining the future use of social clauses. In particular, he outlined the key challenges to introducing social clauses and he mentioned four issues. These include the need to ensure a value-for-money approach; compliance with EU treaties and procurement directives, such as contracts that would not be discriminatory; ensuring no cost burden is added to businesses in applying for tenders; and the difficulties in the monitoring of compliance with social clauses.

The Minister of State also outlined the areas on which to focus to best achieve our aims in this area. He mentioned three issues: focusing on social clauses for services and work contracts rather than supply contracts; applying social considerations as contract performance conditions; and using social clauses to support labour activation policies. I have looked at all of these issues in detail and I believe we can achieve this balance using the experience of similar examples already available in Ireland. In the Grangegorman DIT plan, for instance, there was an employment opportunities study carried out to see how this long-term project could benefit Dublin's north inner city. This study proposes local labour partnerships be set up to work with contractors and sub-contractors to identify their skills needs and to provide the training and upskilling needed for the workers. It also proposes long-term strategies around up-skilling so that the community benefits from the post-construction phase. Similar partnerships could be set up for large infrastructural projects such as Limerick regeneration and the national children's hospital. For smaller works, the linkages with local job centres could provide knowledge of the skills and experience in an area before a project starts which would help with local access for work with contractors.

All of these are excellent ideas but to get the long-term unemployed back into jobs, we must look at quotas. The evidence shows that the longer someone is out of work, the harder it is for him or her to come back into the labour market. If we apply quotas for the long-term unemployed to public infrastructural projects, we would not be using a "hire local" social clause and, therefore, would not be using discriminatory ways. Also, to implement and oversee the contracts, we could look at staging the tenders, or making them smaller, to provide us opportunities for oversight by including past compliance in the assessment of new tenders. I hope these points can be taken into consideration in the context of social clauses in public procurement in the future.

Minister of State at the Department of Public Expenditure and Reform (Deputy Brian Hayes)

I thank Deputy Lyons for raising this matter. I also thank him for the interest he has shown in this issue and for the legislation he published in his own right. As he correctly stated, the matter of social clauses in public contracts is something that I have been examining closely in the Department of Public Expenditure and Reform.

Social clauses can be used in public procurement in cases where they are targeted at factoring into the procurement process consideration of social issues such as employment opportunities, equal opportunities and social inclusion. In order to be compatible with EU law, they must be made known to all interested parties and must not restrict participation by contractors from other member states.

The European Commission issued guidance in 2010 that identified a range of social considerations that could be relevant for procurement, including promoting employment opportunities for young unemployed or long-term unemployed and promoting compliance with core labour standards. This guidance stressed that when incorporating social considerations into the procurement process one of the key challenges is ensuring compliance with the EU treaty principles and the procurement directives. The EU procurement directives primarily envisage that social considerations may be included as contract performance conditions, provided they are not discriminatory and are included in the contract notice or in the contract documents and relate to the performance of the contract. For example, the EU directive states that contract performance conditions may be intended to favour on-site vocational training, the employment of those experiencing particular difficulty in achieving integration, the fight against unemployment or the protection of the environment. Challenges arise from the need to ensure that value for money is not adversely affected, additional costs are not placed on domestic suppliers relative to other potential suppliers, and the targeted benefit is capable of being measured and monitored during execution of the contract.

Deputy Lyons is aware that proposals for a revised set of EU directives governing public procurement are being considered. The inclusion of social considerations in public procurement procedures, specifically at the contract award stage, is an issue that is being addressed in the reform of the procurement directives. In this regard, the revised directive, when implemented, should provide greater scope and legal clarity on the use of social criteria at contract award stage. Reaching agreement on the public procurement dossiers is a key priority for the Irish Presidency of the European Union.

The proposal that all public procurement contracts include a requirement that a quota of long-term unemployed be employed in the delivery of all procurement contracts poses a number of significant risks. In the current economic climate, in particular, bearing in mind the difficulties in the construction sector, businesses have for obvious reasons been reducing their existing work force rather than taking on new employees. Consequently, it is likely that, where a business is awarded a public contract, in particular a small scale contract, the work would be carried out by the existing employees of that business.

In such circumstances a social clause requiring that a number of long-term unemployed people be employed in delivering a public contract could either impose an additional cost on SMEs that they may not be able to afford or result in an employee of the supplier being let go in favour of a long-term unemployed person.

The inclusion of social clauses in the procurement process would therefore appear to be most suited to situations where the social benefit could be considered a core requirement and could be linked directly to the contracting authority's policy or strategic plan, as the Deputy mentioned in his contribution. Experience in other member states would also indicate that social clauses will tend to be used for services and works contracts rather than supply contracts. A further consideration is the ability of contracting authorities to effectively monitor compliance with the social clause - this may be more difficult where some of the work is to be performed in another member state.

Obviously, the main purpose of the public procurement process is to ensure that goods, services and works are purchased by the State in a manner that is legal, transparent and of high probity, and our key requirement is the achievement of value for money. Within this context, my Department and the national procurement service are examining a targeted approach to the use of social clauses focused on contracts in parts of the capital area where employers are likely to be hiring additional workers to deliver the contract. This is likely to mitigate the risk of displacing workers already in employment while offering the opportunity of assisting with labour activation measures for the long-term unemployed.

Deputy John Lyons

I thank the Minister of State for his very positive response to an issue on which I have been working since I became a Member of the House. I agree with what he has said in many respects. In the case of some of the obstacles we have seen, such as the possible displacement of people who are working full-time, we need to look beyond the obstacle and see the solution in order to address that. As the Minister of State and I both know, retraining alone will not give everybody a job. The State is a big spender - it will build numerous schools and many other infrastructural projects over the lifetime of this Government. Please God, work will shortly commence on the new national children's hospital, not to mention Limerick regeneration which is under way. We have not yet lived up to the opportunities that are before us. I am glad we are changing our view of how social clauses can be used to address the number of people who are unemployed.

Of the 190,000 long-term unemployed, almost two thirds are men and were working in the construction sector. We have a ready-made workforce and have shovel-ready projects. I admire the creative thinking coming from the Department of Public Expenditure and Reform on this and I look forward to seeing some attempt to address quotas and getting people who are long-term unemployed back into the workforce. We need to learn from best practice. Some of the experts involved in the public procurement process, whom I have met, have advised that we can do it even as the legislation stands from an EU perspective. Hopefully, the forthcoming EU legislation and objectives will open horizons and expand opportunities for offers of social clauses for people who are long-term unemployed in particular.

Deputy Brian Hayes

I agree with what the Deputy has said and I thank him for the interest he has shown in this area and the lead he has given. He highlighted the challenge of unemployment. Effectively half of our unemployed are considered long-term unemployed, which is a dreadful statistic when so many people have lost their jobs. I understand that approximately 60% of people who lost their jobs in the past four years were directly or indirectly related to the construction sector. We are looking at this in a creative way. I do not want this navel-gazing exercise to go on forever and I want to see action on it. I have told my officials that I want to get this over the line. I believe we can do it under existing legislation and EU directives. When one considers that between 2013 and 2016 the Government plans to spend more than €13.1 billion on construction, there is clearly an opportunity to do something here.

We will spend approximately €1.3 billion on public private partnerships. We would argue that those are additional infrastructural projects. We are considering starting in that area to see if we can make progress. The approach needs to be targeted and legal. We cannot restrict people from other European Union member states, as the Deputy knows. We do not want a displacement effect of putting out of business people who are working in another area, and who are viable and not debt-ridden as many other construction companies are. The social clause consideration fits best in cases where a contractor who has won a contract by the State needs to employ additional workers.

As the Deputy rightly points out this needs to be compatible with EU law, but we want to get it over the line. I appreciate the opportunity he has given me today to give out the public message to the Department and others to get on with this so that we can get it in place. This is something we will do. Obviously it needs to be legal and correct, but I am satisfied we can get this over the line.

Mortgage Arrears Report Implementation

Deputy Michael McGrath

My party has a duty to hold to account the Government on its handling of the mortgage arrears crisis. A report in this morning's Irish Independent informs us that a new Cabinet sub-committee is being established with additional senior Ministers drafted into it to deal with the mortgage arrears crisis. It paints a picture of distinct unhappiness in Government circles over how the crisis is being handled. The Department of the Taoiseach appears to be frustrated with the Department of Finance. The Department of Finance seems to be frustrated with the Central Bank. The Central Bank seems to be frustrated with the banks and the most frustrated of all are the customers in distress with their mortgages who cannot get a solution identified and put in place. That is the kernel of the problem.

We all need to accept that the only solution to this crisis is for the Central Bank and the Department of Finance to identify a suite of options that can be deployed and then for the banks to put in place a targeted solution for each individual mortgage customer who is in distress. I fully accept there is no silver bullet and the problem will not be solved easily. The only way to solve it is for the banks to get down and dirty, and deal with each file on an individual basis. As is the case with all my colleagues in this House, I am dealing with individual cases of borrowers in mortgage distress and it is utterly frustrating for the people concerned because the banks are not facing up to their responsibilities. Whatever fine words might be uttered in this House, the reality is altogether different.

It is now 18 months since the Keane report was published. That report identified a number of innovative solutions that could be put in place. The record since then of the banks in dealing with mortgage distress is that just 12 split-mortgage arrangements have been put in place in those 18 months. Up to December 2012 only one mortgage-to-rent transaction was completed - we were told a number of others were in the pipeline. The bottom line is that the banks are hoarding their capital and not facing up to the problem, as they should. Customers are not being facilitated in getting a solution to their problems. It is just lingering on with significant damage to the economy and to the lives of the people concerned.

The Minister of State knows the scale of the problem. According to the last official figures, 180,000 residential mortgages were in some form of trouble - either in arrears or had been restructured and had not yet fallen back into arrears. That is almost one in four residential mortgages in distress, which is a national emergency. The Government has undertaken initiatives but they are not working so far. The figures keep on getting worse. Some 44,000 mortgage holders are in arrears of more than a year.

Almost half of them are in arrears of two years or more. In the majority of cases, people will not be able to work their way out of that situation without the bank coming to the table with a solution. That is what I want to see happening. I look forward to the Minister of State's response, which I hope will clarify the role of the new committee and how its work will differ from that of the existing banking and mortgage arrears committee. It is hoped we will soon get some solutions to this problem.

Deputy Brian Hayes

The Government is aware of the significant difficulties facing home owners in meeting their mortgage obligations and is committed to advancing appropriate measures to assist mortgage holders experiencing real and genuine difficulty. A special Cabinet sub-committee was put in place in March last year to address the mortgage arrears problem. This committee, chaired by the Taoiseach and including all relevant Ministers, reflects the need for accelerated progress in this area.

At official level, the Department of Finance is taking a lead role and in that context, a high level steering group, chaired by the Department's Secretary General, was established to drive the implementation of the recommendations contained in the Keane report. The Government's strategy to assist those in mortgage difficulty is built around measures in four distinct areas, namely, personal insolvency, a mortgage advisory service, the mortgage-to-rent scheme and engagement with the banks. Considerable progress has been achieved across this agenda.

The Keane report indicates that given the recourse nature of mortgages, personal insolvency reform and, in particular, the introduction of new more accessible insolvency resolution frameworks are essential for the resolution of the mortgage arrears problem. The Personal Insolvency Act 2012 is now law. This should be a catalyst to incentivise banks to reach an agreed solution with individual borrowers in resolving mortgage arrears cases. It is expected that the majority of agreements between borrowers and lenders can be made outside of the provisions of the Act as bilateral agreements between borrowers and lenders, without recourse to the new insolvency frameworks or the courts, would, in many cases, be in the interest of all parties. However, the new insolvency framework will be necessary for some cases and the insolvency service is now urgently preparing the ground to make them operation as soon as possible.

An extensive independent mortgage advice framework has also been put in place by the Minister for Social Protection, comprising an enhanced website, a mortgage arrears information helpline and the provision of free independent one-to-one professional advice to borrowers when considering a long-term forbearance-resolution offer from their lender. The Minister of State with responsibility for housing and planning has now put the mortgage-to-rent scheme on a nationwide basis. Protecting the home of the most distressed mortgage holders through a mortgage-to-rent scheme whereby the ownership of the house passes to an approved housing body is a key social back stop housing support for those with distressed mortgages. The existing owner then becomes a social housing tenant. This option is now available in appropriate cases and will be of benefit to low income families whose mortgage situation is unsustainable to allow them remain in their homes.

The Central Bank, under its MARS project, has been intensively working with lenders for some time to ensure that they have a range of longer term options, such as trade-down mortgages, split mortgages and sale by agreement or other appropriate options as may be developed by lenders for their distressed mortgage customers and that they have the capacity to implement these in an effective manner. While progress in this area has not been as rapid as desired, greater effort and resources are now being deployed across the banks to this issue and real engagement on resolution options should now be further enhanced.

In addition, the Central Bank's code of conduct on mortgage arrears remains a key framework to govern the relationship between mortgage holders experiencing difficulty and their bank and it offers very worthwhile protections for distressed households. The code provides that each bank must put in place a formal mortgage arrears resolution process to deal with its mortgage customers who are in arrears or pre-arrears and for the establishment of dedicated arrears support units and appeals processes to handle such cases. The Central Bank has commenced a review of the code of conduct on mortgage arrears which will involve a public consultation process. The review of the code will have to take account as appropriate of recent developments such as the new insolvency legislation.

The Government is committed to building on the progress made and further intensifying its efforts to address the mortgage arrears problem and in that context is proceeding on the basis of the recommendations of the Keane report. However, banks and other lenders also have a very significant obligation and responsibility to address mortgage holders experiencing genuine mortgage arrears. Given that lenders extended the credit in the first instance, they can be regarded as having the primary responsibility for addressing the debt problems now facing their customers and for resolving the position in a sustainable way for those customers experiencing genuine difficulty.

Deputy Michael McGrath

I thank the Minister of State for his response. The problem is that while there is engagement between the banks and their customers, it is not real engagement. I have assisted many borrowers with the completion of the standard financial statement form. While some get a response weeks or even months later, others do not get a response, leaving them not knowing where they stand. Meanwhile, the overhang of debt is causing major problems for them, including stress, lack of certainty and fear of losing their homes. All of this is also acting as a drag on the overall economy. The evidence in this regard is in the official published figures. More than 99% of mortgage restructures to date comprise the standard instruments of interest only repayments, reduced payments for a period of time, extension of the term, capitalisation of arrears or a payment moratorium for a short time. The innovative solutions identified are not being rolled out.

The Minister of State is duty bound to say in this House today that the Government is not satisfied with the manner in which this issue is being dealt with. High level officials in Government and the Central Bank briefed the Irish Independent about their concerns. This issue is not being dealt with. The banks are not facing up to their responsibilities. It is about time we called a spade a spade. The banks have been recapitalised by the people. They are hoarding that capital and are not facing up to the bad debts on their books. I acknowledge that the solution will have to be on a case-by-case basis. However, it must be within the context of the suite of measures which have been identified, rolled out and supported by Government and the Central Bank. This is not what is happening on the ground, which is my reason for raising this issue again.

Deputy Brian Hayes

The patience of all of us in respect of this matter is being stretched. The Government has put in place the building blocks. The banks must now engage with people who have distressed mortgages. The legislation in terms of insolvency is in place. The code of conduct is also in place. The banks, as the Deputy knows, have been well capitalised. As I have repeatedly said, they are better capitalised than Swiss banks in terms of their capital reserve ratios. The banks have been given the money to either write down, write off or restructure debts in accordance with the original capital assessments completed more than 18 months ago.

The Central Bank has agreed and accepted the suite of measures put in place to allow each of the institutions deal with this issue. The Government wants this year to be the year when deliberate and extensive action is taken by all of the financial institutions to bring this over the line and to get on with the task of restructuring people's mortgages, where appropriate. Deputy McGrath is correct that this will have to be done on a case-by-case basis. The banks have been given the tools and capital to address the issue. It is now the task of Government to drive this process forward and to ensure the banks are accountable to the people who have well capitalised them over a period of years. The Government expects extensive delivery on this programme in 2013. The matter is being monitored at Government and departmental level. The Department of Finance is involved on a daily basis with bringing this issue to some conclusion. We expect to see results this year.

Overseas Development Aid Provision

Deputy Olivia Mitchell

I thank the Ceann Comhairle for providing me with a timely opportunity to raise this issue. I also thank the Minister of State, Deputy Hayes, for attending in the Dáil. I appreciate the Tánaiste and Minister for Foreign Affairs and Trade has much on his hands at present.

As chairperson of the all-party interest group in the Dáil on sexual and reproductive health rights and population and development, I raised this issue last year with some of my colleagues hoping to ensure we would use our EU Presidency to prioritise gender equality and maternal and child health. I raise it again at the start of our Presidency to encourage the Tánaiste to highlight the importance and urgency of these issues at the various opportunities which will arise for us during the Presidency, namely, the EU budget discussions, the post millennium development goals, MDG, framework discussions and at the conference we will host in April on health, nutrition and climate change. Specifically I want this issue fresh in the mind of the Tánaiste next week when we host an informal meeting of EU development aid Ministers and the High Representative. These are talks in advance of the global discussions on the post-2015 development framework. The Minister of State is aware, as are we all, that the EU contributes a staggering 55% of all world aid so what we prioritise and what we want to bring to the fore carries weight. We need to use our position to focus specifically on sexual and reproductive health rights which have been losing focus and support in recent times with absolutely catastrophic results for millions of women throughout the world.

The prime development goal is to end hunger and poverty. Ireland has always had a particular and historic motivation in this regard. Ending hunger crucially depends on a healthy educated female population in the developing world. Reproductive health care and access to family planning allow women to have some say in the number of children they have and when they have them. Without this, they and their children are subject to a cycle of poverty which no amount of food aid can ever alleviate.

The recent report on the mapping of EU development aid and population assistance showed the total population assistance from the EU institutions is less than 2% of overseas development aid. It also shows, and I am very sorry to have to say this, that Ireland's population assistance as a percentage of overseas development aid is declining. It may be only a marginal decline but it shows that population assistance generally is losing priority even in our aid programmes.

I do not want to suggest that other goals are less important. Rather I contended that achieving all of the MDGs depends on access to contraception by women, who are for the most part the breadwinners, farmers and providers in their societies. Countless millions of lives depend on the good health of these women. This is not just my contention; it is an established fact that access to family planning goes hand in hand with improvements in health and increased prosperity. Giving women control over their fertility and better reproductive health care is the single biggest contribution we can make to sustainable development in the poorest countries and this is what overseas development aid is all about. This is the message I hope will be brought to the informal EU aid Ministers' meeting next week so it is prioritised in the development of the post-2015 development goals. In fact, it should be more than prioritised; it should be central to the framework because it is fundamental to the achievement of the other goals.

Deputy Brian Hayes

The Tánaiste has asked me to take this matter. He thanks Deputy Mitchell for raising this very important issue and apologises that he cannot be here. He will monitor the debate and the Deputy's contribution.

The provision of reproductive health services, including family planning services, is essential in tackling the continuing high rates of maternal mortality in the developing world. The position Ireland takes on sexual and reproductive health is based on a firm commitment to the programme of actions agreed at the international conference on population and development, ICPD, in Cairo in 1994. The ICPD set out a number of principles on reproductive health issues including the importance of gender equality and the empowerment of women to reduce poverty and vulnerability; the right of all women to the information and means to make autonomous decisions about their fertility; and the link between women's control over their own fertility and the wider empowerment of women in economic, social and political life.

Ireland has a strong record of support for the provision of family planning services for women in developing countries, through our funding and our policy work at EU and global levels. We assist access to family planning services in countries where such services are considered inadequate, including in Ethiopia, Mozambique, Tanzania, Liberia, the Democratic Republic of the Congo, Zimbabwe and Somalia. In 2011, as Deputy Mitchell is aware, Ireland spent €6.75 million on reproductive health services. At a global level in the past six years, Ireland has contributed more than €34 million to the reproductive, maternal health and family planning programmes of the United Nation's Population Fund, UNFPA, and is one of its top core funders. In addition to specific support for reproductive health services, we also invest heavily in building up national health systems to ensure the sustainability of all health services.

As the Deputy stated, the EU is also a major supporter of reproductive health services through its geographic support instruments and through thematic funding. For example, since 2007 the EU has allocated €580 million to health programmes including reproductive health programmes under its thematic programme Investing in People. The EU and its member states are the largest providers of development assistance in the world, providing more than 55% of global overseas development aid. This will remain the case under the next multi-annual financial framework, MFF. The Irish Presidency supports President Van Rompuy in his efforts to secure a deal on the MFF and we have sought to ensure that a fair proportion of the EU budget is allocated to development assistance. Ireland's EU Presidency comes at a crucial period for international development policy as discussions commence on the framework for global development after 2015, the target date for the millennium development goals. A key priority for Ireland's Presidency will be to ensure the EU adopts a strong coherent position and takes a lead in the discussions on the future of development policy and practice. As the international community opens discussions on the framework for global development after 2015, we will continue to highlight the MDG targets where least progress has been made, including maternal mortality.

On 15 and 16 April, the Government and the Mary Robinson Foundation-Climate Justice will convene in Dublin an international conference on hunger, nutrition and climate justice. The objective is to listen to and learn from the experiences of local people, particularly women, and to inspire innovative thinking and solutions to inform a new approach to addressing hunger, nutrition and climate change. Women are essential drivers of positive change in our fight against hunger, under nutrition and negative effects of climate change. They play a crucial role in tackling these major global challenges, not least because the majority of smallholder farmers in the developing world are women, but also because women have primary responsibility for producing and preparing food for their families and caring for children. Empowering women and strengthening their decision-making role at household level and giving women the same opportunities as men to boost their agricultural productivity to meet the food and nutritional needs of their families and adapt to climate change will be central to the conference discussions. The Government will continue to prioritise women's reproductive health and family planning and we will work closely with our EU, UN and other partners to ensure improved access to family planning services for women and girls is central to the post-2015 development agenda.

Deputy Olivia Mitchell

I could not be happier to see a restatement of the commitment on behalf of the Tánaiste. Ireland has always had a human rights-based approach to development. If we want to eliminate hunger and poverty, as I have repeatedly stated we do, we must include the rights of the poorest women in the world to equality of opportunity. Without sexual and reproductive rights and access to family planning services these women have absolutely no opportunities, never mind equality of opportunity, and cannot pull themselves and their children out of the cycle of poverty to which they are condemned.

The MDG-5 target is now the furthest from being attained and progress is slowest in sub-Saharan Africa. Over 250,000 people are dying annually in childbirth due to the lack of maternity care. The awful thing is that instead of improving, the rate of progress is slowing down. Failure in this area is at least partly due to the fact that the target 5b, which was to ensure universal access to reproductive health, was initially omitted from the millennium development goals. This time it is essential that, far from being a tag-on, it is central to the new post-2015 development framework.

Deputy Brian Hayes

The Deputy has expressed the Government's view that if we are to deliver the desired progress, it is essential that the post-2015 goals have that as a condition for development aid. We are already in discussions on the multi-annual financial framework, or MFF, negotiations which is the financial envelope for the EU over the next seven years. Within those discussions it is crucially important that we continue to have the overseas development aid budget enhanced and supported in circumstances where there is real pressure on that expenditure.

As the Deputy has rightly articulated, there is precious little use in having that money unless one can tie it to the reproductive and maternal rights of women, in such countries and particularly in sub-Saharan Africa. Deputy Mitchell has articulated the Government's view and that is the position we will be advancing during the EU Presidency. It is something the Government holds dear, that with funding and support, rights must come for women in their own countries. In order to make the kind of progress we all want to see, those rights must be enforced by those countries that are giving the money in the first instance. It is something we take very seriously in the context of the negotiations of which we are a part.

Community Nursing Homes

Deputy Aengus Ó Snodaigh

It is a disgrace that two years after a €12 million community nursing home facility was completed in Inchicore, it has not yet started operations. This facility was to provide community nursing home beds in one of the most disadvantaged areas, which includes a large aging population. The facility contains state-of-the-art facilities, yet it remains closed for its intended purpose. It was built as part of an overall plan to regenerate St. Michael's estate, as well as being next to the primary health care unit which is going well. The latter unit is a credit to those who had that vision. At the time, the community nursing home facility was part of an overall plan to provide public nursing home care not only in the 50-bed unit in St. Michael's estate, but also in Brú Caoimhghín where additional beds were to be built, and the Meath Hospital.

There was an overall plan that all these beds would surround St. James's Hospital, which is one of the busiest hospitals in the country. They were being provided to facilitate the release of patients who required convalescent aftercare, rather than being stuck in acute beds thus blocking the transfer of patients from accident and emergency units and elsewhere. Newspaper reports have referred to them as "bed-blockers". I do not believe they are bed blockers but they do need a different level of care. The facilities to which I am referring are within a mile of St. James's Hospital. It is illogical, economically and otherwise, to have a facility of this size sitting unused in an area that is crying out for it.

Over the past year, I have visited many patients in St. James's and Tallaght hospitals. Many of them needed to be transferred to a nursing home, but the system puts them into private health care. This is the privatisation agenda which has been carried on from the last Government to this one. I appeal to the Minister of State to announce that these beds will be opened, so that patients can be transferred from a public hospital to a public community health care facility.

It beggars belief why such a building is there. Anyone who visits it will see that it is a beautiful building on the grounds of the old St. Michael's school next to the primary health care centre. At some stage, this Government or a future Administration will have significant scope to regenerate the area, which has suffered the trials and tribulations of being disadvantaged and ignored for many years.

The financial logic of opening this facility is that it would allow beds to be freed up in St. James's Hospital so that it could become more effective and efficient in the use of hospital space. In that instance, one would not see the Minister for Health cutting €9 million from St. James's Hospital because it would prove it is well capable of delivering efficiencies.

We carried out a petition in the local area, asking local people what was happening. They had raised the issue with us on quite a number of occasions in the past few years. I will be presenting the Minister with a petition tomorrow containing over 600 signatures. That was just from the near vicinity and we did not go beyond that. We asked them what their demands were concerning this facility. The primary demand was to open it now and not leave it sitting there closed. It is a living disgrace.

Minister of State at the Department of Health (Deputy Kathleen Lynch)

I thank the Deputy for raising this issue. Apart from it being within my own remit, I know something about this particular community nursing home in Inchicore because Deputy Catherine Byrne is continually raising the matter. There is concern in the area as to how a state-of-the-art building - which cost €10 million, not €12 million, although it is a substantial figure - could remain closed.

The Government is committed to ensuring that patients receive the highest standard of care in the appropriate settings, be they acute, community or residential. As the Deputy is aware, these are challenging times for the Health Service Executive in respect of all services. In the case of community nursing units, these include challenges regarding staffing, funding and the age and structure of its units. In this regard, all developments have to be addressed in light of current economic and budgetary pressures. Any decision taken by the HSE must have regard to this and the current recruitment moratorium, which is significant concerning this particular unit.

The 50-bed community nursing unit at the former St. Michael's estate in Inchicore was planned as one of a network of units across the Dublin mid-Leinster region to address the projected demand for future long-term care provision. The public sector moratorium has severely limited the HSE's ability to commission new staff-intensive services and this has delayed the commissioning and opening of the Inchicore facility.

During 2012, the HSE proposed to move staff and patients from St. Brigid's Hospital, Crooksling to Inchicore thereby allowing for the closure of the older unit at St. Brigid's Hospital. However, having regard to the wishes of the patients at St. Brigid's Hospital and the need to maximise the level of service provision in the region, it was decided to maintain services at Crooksling and to explore alternative proposals for the Inchicore unit. I am sure the Deputy was involved in that as well.

In light of the public sector moratorium and significant additional reductions in staff numbers required over the next two years, one option being pursued is that of a public private partnership agreement. The HSE has successfully used this model to open a 100-bed unit for older persons at Ballincollig, County Cork. This unit delivers real cost benefits and value to the system which would not be possible through direct employment. It also deals creatively with the moratorium.

The current position is that a project team has been appointed within the HSE to progress this project, including representatives from general management, human resources, finance and procurement. A detailed draft specification has been prepared on the service requirement for the Inchicore unit, to be used in the tendering process with the preferred provider panel.

In addition, a detailed briefing note and associated documentation is being finalised at present in preparation for an engagement with the relevant trade unions in line with the requirements under the public sector agreement. The engagement with the unions, which must be completed before proceeding to tender stage, will commence shortly. Once the tender process commences, the HSE anticipates that a tender should be awarded within three months. The Inchicore building has been used by HSE services until recently and these services have been relocated in preparation for its opening as a community nursing home. I know this will be welcomed by the Deputy.

Deputy Aengus Ó Snodaigh

I do not know who gave the Minister of State the figures on the costs associated with the nursing home. There were construction costs, site costs, site development costs and equipment costs of €8.6 million, €1.8 million, €1.4 million and €0.6 million, respectively, amounting to €12.4 million, not including whatever costs have arisen subsequently during the two years in which it has been sitting idle.

This unit was not originally meant to be a replacement for St. Brigid's Hospital nor was it intended to be a replacement for the 50 beds located in Brú Caoimhghín. This unit was meant to provide an additional 50 beds into the system but now it appears as though it will result in the addition of 50 beds to the private system-----

Deputy Kathleen Lynch

No.

Deputy Aengus Ó Snodaigh

-----because the Minister of State has suggested it be run under a public private partnership arrangement. Would it not be more logical to grant the facility to St. James's Hospital, if the HSE no longer wishes to have anything to do with it, and allow that public hospital to run it to service its needs? I have to hand figures indicating that in October 2012, St. James's Hospital had more than 50 patients awaiting discharge and placement in long-term care beds and I do not believe the situation has improved greatly subsequently. These patients obviously would take up all the beds contained in this unit. Moreover, as it is located one mile down the road, were any issues to arise with those patients, they could be transferred quickly back to St. James's Hospital. In addition, more than 20 patients in Tallaght hospital were awaiting precisely the same placement in long-term care beds. All such long-term care beds are being facilitated in the private sector and this constitutes the privatisation of the health service. I appeal to the Minister of State, as a Labour Party Minister in particular, to oppose any privatisation, whether through public private partnerships or by way of subsidising private nursing homes in such a fashion. I appeal to her to open this facility as a public-run unit available to members of the public. It is illogical for it to sit there. While it is welcome that the Minister of State is contemplating action, I note the action is for it to be run not as a public facility but as a private facility paid for by the public.

Deputy Kathleen Lynch

I recall that the last time I answered a question on this issue - for Deputy Catherine Byrne - the issue of having St. James's Hospital take it over as a sort of step-down facility arose. While I am open to correction, my recollection is that the hospital's licence to operate does not allow it to operate a facility off-site or off-campus.

Deputy Aengus Ó Snodaigh

For the information of the Minister of State, it had one landing of beds in Brú Caoimhghín.

Acting Chairman (Deputy Paudie Coffey)

We will have the Minister of State respond.

Deputy Aengus Ó Snodaigh

The Minister of State was not informed on this point.

Deputy Kathleen Lynch

I am fully informed but anyway-----

Deputy Aengus Ó Snodaigh

Not on this point.

Acting Chairman (Deputy Paudie Coffey)

Deputy, we will have the Minister of State without interruption please. The Deputy had his opportunity.

Deputy Kathleen Lynch

It was because we investigated that issue.

This will not be a private community nursing unit. It will operate in the same manner as the unit in Ballincollig, County Cork. Deputy McLellan, who is sitting behind Deputy Ó Snodaigh, is aware that it operates very well and it is availed of by people from the public list. It is run on behalf of the State and is run highly effectively. If this unit could be opened and be of benefit to the community and to those who are in acute hospitals and clearly do not wish to be there but do not have an option, that would be a good day's work. I encourage the HSE to get on and do the job and to make sure space is available for people who could benefit from such a unit.