Priority Questions

Departmental Expenditure

Seán Fleming


1. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform the new measures he is putting in place to ensure all departmental expenditure targets are consistently met; and if he will make a statement on the matter. [49664/13]

This question concerns this relatively new Department, the primary focus of which is on dealing with public expenditure and the new measures to ensure all line Departments consistently meet the targets set in the annual Estimates. I am thinking not just of this year but looking forward to next year.

The Government decides departmental allocations in the budget each year, with the full detail of these allocations being set out in the Estimates approved by the Dáil. All Ministers and their Departments are responsible for ensuring their expenditure is undertaken in line with the voted allocations. At the beginning of each year every Department sets out its expected profile of expenditure on a month by month basis and during the course of the year each Department reports monthly on its actual performance against this expenditure profile. My Department is in regular communication with Departments and offices to ensure expenditure is being controlled and we monitor the drawdown of funds from the Exchequer against the published expenditure profiles. Where necessary, my Department regularly meets line Departments to review financial management.

The comprehensive expenditure report 2012-14 introduced a new model of multi-annual budgeting for current expenditure, called a medium-term expenditure framework, MTEF. The MTEF was initiated on an administrative basis and now, following the passage of the Ministers and Secretaries (Amendment) Act 2013, the arrangements for fixed spending ceilings for each ministerial Vote group for a rolling three year period have a statutory basis. The details of the operation of the ministerial expenditure ceilings are set out in an administrative circular issued by my Department. The circular details the rules and arrangements for planning and managing current expenditure within the fiscal structures in place at European level. It includes provisions to assist with management of departmental expenditure, including control measures to ensure compliance with ministerial expenditure ceilings.

The new control measures provide for monthly reporting to the Government where a Department is spending in excess of its profile and there is a substantive risk. If any such overspend is not corrected within two months, a formal review will be conducted of the relevant Department’s expenditure and this will be led by the Department of Public Expenditure and Reform. If the relevant Department fails to implement recommendations of the formal review, as agreed by the Government, and breaches the expenditure ceiling, the Government may require the Department to repay the overrun in the following year.

The Minister has outlined the system, but I am more interested in how he implements the systems he has adequately described. I see the value of monthly reports. If there is no correction within two months, there is a full review. Has any Department had to repay expenditure and does the Minister envisage it happening?

Earlier this year after the Estimates for 2013 were published, people knew that the Estimate for the Department of Justice and Equality was flawed and would not meet the expenditure figures required for the running of the Garda Síochána. The figures were wrong and the Garda Síochána expressed concern about them.

The committee met yesterday to approve an extra €51 million and correct what was originally a misleading Estimate. We said the same about the Department of Health Estimate, and I understand there is to be a Supplementary Estimate for that Department in the coming days. This is not because of overspending but rather that the wrong Estimate was presented to the Houses to start with. That has been known from the start. What will the Minister do about people bringing forward flawed Estimates?

The Deputy has asked a number of questions and I will deal with the specifics. I consider all Estimates and we must ensure that we live within budgetary allocations. I am very confident that at the end of this year, the overall expenditure profile will be comfortably met across all Departments. Could there be changes in existing arrangements for Departments? There will be a number of Supplementary Estimates, and for example I will introduce a Supplementary Estimate for the €50 million for road construction stimulus package. There will be some technical Estimates to move moneys within Votes. It is normal practice when speaking to a budget profile across all public administration in excess of €50 billion.

The Deputy mentioned the two specific areas of justice and health, and I know the Minister for Justice and Equality was before the committee yesterday. Some 90% of his budget is pay and there must be flexibility to ensure gardaí can deal with manpower issues in the way to best meet the security needs of the State. That determination is made by the Garda Commissioner in consultation with the Minister for Justice and Equality, which I am happy to support.

I have stated before that I encourage the Minister's Department to take more of a hands-on approach rather than continuously leaving it to a line manager. For example, I have argued that the procurement office should take over the purchase of drugs and medicines on behalf of the Department of Health. I deal with this in a parliamentary question today but the Minister's Department indicated it was a matter for the Department of Health. I am sure the officials did not consult the Minister when they off-loaded it to the Department of Health. My question asked about bringing that functionality to the Department of Public Expenditure and Reform in dealing with procurement on behalf of the State. The Department did not want to take it. I am concerned that even when the Minister is encouraged to take more of a hands-on approach, some officials are not willing to do so.

It is clearly a matter for line Departments to run their own Estimates, as otherwise we would only have one Department of public expenditure for running everything, which would not be right either. I will finish the point relating to the Department of Justice and Equality. We have allocated an additional €5 million for the first instalment of the Magdalen payments, which was not accounted for but to which nobody would object. The Deputy mentioned the €51 million, which is a gross figure, and there are savings being made within the justice Vote to make up a bit of it too.

With regard to drugs procurement, the new office of procurement has a new director of procurement and it works very closely with all procurement agencies, including the HSE. It might be worthwhile for the Oireachtas Joint Committee on Finance, Public Expenditure and Reform to invite Mr. Paul Quinn, the director of procurement, before it to go through that process in some detail. It is important to see the really remarkable things happening on the procurement side.

Semi-State Bodies

Mary Lou McDonald


2. Deputy Mary Lou McDonald asked the Minister for Public Expenditure and Reform the challenges the current difficulties regarding the ESB pension scheme will have for the programme of State asset disposal his Department is overseeing; and if he will make a statement on the matter. [49663/13]

The Minister is aware that the issue of the deficit in the ESB pension fund has been a long-running controversy and concern, and it now stands at €1.6 billion. He is probably aware that in 2010, ESB management on a solo run changed the accountancy treatment of the pension fund from direct benefit to direct contribution, shifting all the liability to the workers. In an effort to keep the liability off the balance sheet, the company subsequently borrowed very heavily on the international markets, having presented the balance sheet in an erroneous fashion. Now ESB workers have balloted for industrial action and we face the prospect of the first ESB strike in decades. The Minister's officials and the Departments which have promised dialogue have not been in touch with ESB management and unions since last June. What is the implication of this for the disposal of the assets?

In so far as this issue relates to my Department, it relates to the sale of State assets; the responsibility for the ESB does not fall within my Department and I am not going to respond on that matter. With regard to the dispute concerning the manner in which the ESB currently accounts for its pension liabilities, I do not envisage that the matter will have any impact on the disposal by the ESB of its assets. These assets have been identified for disposal and I am confident the programme of asset disposals will proceed as planned.

In 2010, the ESB management without agreement of workers or unions changed the treatment of the pension fund for the purposes of cleaning up its balance sheet. The Government had to sign off those accounts so I do not accept the Minister's position of not commenting on the matter. He should do so and he must do so, and I hope he will take the opportunity today to speak on it.

Was the Minister or the Government aware of the change in the treatment of the pension fund? It was not minor but it was a very significant shift in how the pension fund and its deficit were accounted for. The Government signed off on that but was it aware of the implications when it did so? Does the Minister appreciate the implication for the workers in the ESB, who now find themselves in a position where the management wishes to shift the burden of all that deficit on to their shoulders? This relates directly to any proposed disposal of any part of this State asset. Does the Minister appreciate the gravity of a position where a semi-State company alters its balance sheet in this manner to affect its credit rating for borrowing on the international markets? These are serious matters in the public domain and I do not accept that the Minister cannot comment on them.

The Deputy is making very serious charges about altering accounts and it would be proper for her to deal with the line Minister, who has all the information relating to the issue. She has spoken of the Government collectively signing off the accounts, I presume, as they are not a matter for me. The Government collectively receives the report of the ESB and every other State agency and these are dealt with by the line Minister. This is a matter for the Minister for Communications, Energy and Natural Resources, and he has all the details relating to it. The description of the pension schemes in the accounts is a matter that could be properly explored with the people having the best information, and I do not have it.

The ESB in general is one of the most robust institutions in the State and there is no question of a hole in its pensions unless everybody in it was to retire next Monday, crystallising the cost. I heard a statement the day before yesterday from the Minister for Social Protection, who is responsible for pensions policy generally, and she has indicated the company is working to a scheme that will have a robustness by 2018. These matters would properly be addressed to the Minister for Communications, Energy and Natural Resources.

I do not accept that. The Minister is proposing to oversee the sale of part of this State asset. The due diligence involved in this, from the Minister's perspective, must mean he has been through this company like a dose of salts, establishing its exact position. It is a bit hard to believe he would miss the magnitude of the hole in the pension fund in the ESB. I also find it strange or remarkable that the Minister has not yet been apprised of the actions of ESB management in 2010; that was a very deliberate act to change the description and treatment of the pension fund from a defined benefit fund to a defined contribution fund. The implications for the workers are enormous, and the consequences for the company could be very significant. This company is borrowing on the international markets, based on a credit rating directly linked to its balance sheet.

The Minister is passing the buck to another Minister, Deputy Rabbitte. E-mails in the public domain have been commented on by the media a number of weeks ago. The line Minister to whom the Minister opposite has referred ran for cover at that stage and had nothing to say, it seems. It is unacceptable that the Minister, who has told us he will oversee the sale of part of this company, is singing dumb on the matter. He might be running for cover too.

I am impressed by the view of the two main Opposition spokespersons on the capacity of my Department. Deputy Sean Fleming wants me to micromanage the HSE-----

This is not micromanaging.

-----and Deputy Mary Lou McDonald thinks I should micromanage each and every one of the State companies.

My Department has a large reach, but that is a bit much. The line Minister with responsibility for knowing the detail of the ESB is the person best placed to answer the Deputy’s question.

Therefore, the Minister does not know anything about it. That is astonishing.

The Minister should be allowed to conclude.

I know the Deputy has no more interest in getting accurate answers that she does not bother with the line Minister who I am sure would be very happy to answer any question or respond to a matter raised in the Topical Issue debate.

Strangely enough, the Topical Issue has not been selected.

It is probably more useful from a soundbite perspective to make a statement as opposed to getting information by way of question and answer.

Then give me the information.

Public Service Reform Plan Measures

Catherine Murphy


3. Deputy Catherine Murphy asked the Minister for Public Expenditure and Reform if, in his programme of reforming the public service, he has included a detailed regional or sub-national planning model for the optimal development of the public service around the country into the future; the extent of input his Department is having in the development of a new national spatial strategy; if the public service will be involved in this plan; and if he will make a statement on the matter. [49557/13]

The question is about the planning under way to ensure we have the optimal public service. We are heading into a new national spatial strategy. It is not just a dry strategy based on where one would develop; public services must accompany the development. One of my concerns is that demographic change does not play as significant a role as it should in order for services to be matched with population change.

I am afraid I am not responsible for the spatial strategy. That is a matter for the Minister for the Environment, Community and Local Government. I am responsible for the public service reform plan, to which I assume the question refers.

The reform plan was published in 2011 and set out an ambitious agenda for reform across all areas of the public service. Good progress has been made in implementing the plan across a range of cross-cutting areas, including, for example, shared services, public procurement, to which Deputy Seán Fleming referred, public expenditure reforms and political reform. A progress report on implementation of the plan was published in September 2012 and a second progress report will be published early in 2014.

Alongside the overall reform plan, all Departments and major offices have developed their own integrated reform delivery plans which set out the key actions required to ensure the successful delivery of the cross-cutting reforms in the plan, as well as sector-specific reform initiatives and actions from the Haddington Road agreement.

Two years on from the publication of the current plan, it is timely to consider how we can build on the next wave of reform. My Department is developing a renewed and ambitious reform plan for the next two years which will be published early in 2014. The reform programme adopts a whole-of-government approach to reforming public services across all sectors, including health, education, justice and local government, as well as the Civil Service. The reforms at sectoral level are led by the relevant Ministers and their Departments. Owing to the nature of public services, they are delivered from many locations around the country. The Government’s reform programme is about ensuring these services, whether centrally or locally delivered, are efficient and effective. In that context, it is the role of all sectors to continually review how services are organised to ensure they deliver optimum benefit to the people.

On a related point, we need to manage our property portfolio which is the responsibility of the Minister of State, Deputy Brian Hayes, in a co-ordinated manner. To that end, the Government published a property asset management delivery plan last July which is being implemented by my colleague, the Minister of State.

I am pleased to hear there is a whole-of-government approach, as that brings in the national spatial strategy in terms of forward planning. The distribution of public services around the country is most unequal, but I do not need to tell the Minister that because Wexford is a case in point. For example, in terms of local authority staff, County Meath has half the number of staff in County Kerry, yet it has 40,000 more people. Class sizes are considerably higher in commuter belt areas in parts of west Dublin. Garda resources are half the strength in some locations, with County Kildare being the worst. Public service reform must be viewed in terms of having a minimum quality of public services. What we do now is important, but it also requires future planning because one cannot shift people from one part of the country to another in certain categories. The reforms are not visible in terms of equality of distribution, but they must become so.

I have heard the Deputy make the case before and she makes a compelling case. Services were developed in an ad hoc way in health service delivery, for example, depending on what the priorities were in a health board region. We now have a national integrated health service, but there are still disparities in staffing levels and available services. Reference was also made to the distribution of gardaí. That is a matter for the Garda Commissioner. The distribution of gardaí cannot just relate to population size as crime statistics must be taken into account. There must be a concentration of gardaí where issues arise, as happened in Limerick.

There are two keys to service provision. One is proper integration in order that we have a joined-up system under which we can move people about and services are delivered in the optimum way to citizens. The next wave of reforms we are planning is citizen-focused to make sure people can access services. There is a need to be transparent in order that there is a proper public understanding and a rationale to deal with the platform of public services available to every citizen no matter where they are located.

The issue is critically important. The Minister did not answer the part of the question about how public service reform would dovetail with the national spatial strategy in the future. I fully understand it is part of the role of the Department of the Environment, Community and Local Government. We have a difficult situation to deal with and a dispersed pattern of settlement. We do not have an equal starting point. It is important that such a relationship is developed in order that whatever mistakes have been made in the past will not be made in the future owing to a lack of forward planning. Adequate attention must be paid to demographic change.

Again, I agree with the Deputy. I await formal proposals from the Minister for the Environment, Community and Local Government on the new spatial strategy. Consultations are ongoing between my Department and all other Departments in that regard in order that when the spatial strategy is produced, it will be an integrated document into which everybody will have an input. When we see it, we might have a better debate on the issue.

Commemorative Events

Seán Fleming


4. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform the role of the Office of Public Works in national commemorations between 2013 and 2016; and if he will make a statement on the matter. [49665/13]

I want the Minister of State, Deputy Brian Hayes, who has responsibility for the OPW to outline briefly the role of his office in terms of the various commemorations from 2013 to 2016 in view of the fact that many of the buildings involved are public buildings and national monuments which means that the OPW will have a central role.

The Minister for Arts, Heritage and the Gaeltacht has been charged with co-ordinating the Government's approach to commemorating the many notable historic events within the decade of centenaries from 2012 to 2022. The general Government approach is one that seeks to promote tolerance, respect and inclusiveness and that recognises the all-island and east-west shared past nature of the decade.

The role of the Office of Public Works, OPW, is to support the various Government initiatives and events being held on State property managed by the OPW to commemorate particular historic occasions such as at the Garden of Remembrance, for example. That is similar to the role it has performed most successfully recently for the visits of Queen Elizabeth II and President Obama and Ireland's hosting of the EU Presidency. The OPW provides logistical, organisational and managerial input, as required and requested by various Departments involved in the national commemorations.

The OPW is also involved in the management of specific projects relating to and linked with the commemoration of 1916. Two notable examples are the redevelopment of Kilmainham Gaol through the acquisition of the adjacent former Kilmainham courthouse which will facilitate the anticipated increased volume of visitors to the gaol as the events surrounding the Rising of 1916 are commemorated and the major refurbishment of the National Gallery of Ireland. Both projects are scheduled for completion by the end of 2015, in time for the centenary commemoration of the Rising in 2016.

I welcome the role of the OPW. I understand the initiative is being headed by the Department of Arts, Heritage and the Gaeltacht but the OPW will have a key role. It had a key role in regard to the Presidency of the Council of the European Union, although the Minister of State's Department was not a direct line Department. I hope it will have at least as strong a role in these matters.

With regard to the previous question, we mentioned the medium-term expenditure plan for each Department. How much is allocated for the commemorations in the OPW medium-term expenditure plan on a year-by-year basis for the next three years? There must be a subheading. What is the outline?

The Minister of State mentioned the Garden of Remembrance. Are there plans to locate there a monument for children who were abused in institutions? Is everyone happy that it is the right location? I do not have a particular view on it and respect the people who are involved.

The OPW can play a key role. I am thinking of the declaration of the Moore Street area as a national monument and also of the GPO. Such locations should be central. We would not be here today without the people who were involved in the associated struggles.

On the first issue, the Deputy rightly pointed out the role of the OPW in the EU Presidency. The total amount spent by the State was one third less than was the case during the previous Presidency, some seven years ago. This is an example of the co-ordination and shared service role of the OPW.

The only subhead concerned capital projects. Six years ago, the total amount of money for OPW capital projects was €400 million. This year, it is €80 million. We are still doing all the tasks in question with capital expenditure of €80 million. The only subhead is for the Kilmainham Gaol project, which involves an investment of €10 million over a three-year period.

With regard to the Deputy's comments on the Garden of Remembrance, I fully agree with him. It is a project of the Department of Education and Skills, from which the funding comes. However, my Department, along with that of the Minister for Education and Skills, Deputy Quinn, has been central regarding the competition for architectural support and the siting of the new memorial. It is important that we proceed with that.

We intend to publish next year a full list of the commemorative events in OPW-specific historic sites.

Essentially, the Minister of State's last sentence, on the fact that he will publish in 2014 a list of events connected directly with the OPW, is the one I was waiting to hear.

There are many relevant State properties. Even in Mountjoy, old records were found on people who had been interned there at various times over the years, or who had met the end of their days there, which are relevant to some of the commemorations. Could the Minister of State ensure, through the OPW, that any relevant information in State properties, be they owned by the Department of Justice and Equality, the National Library of Ireland or the National Archives - not necessarily the Department of Finance - can be utilised to enrich the celebrations and promote greater knowledge and awareness? It is a question of trying to get the information up on the website. I am impressed to see the Minister of State reading from his tablet this morning.

That is a very good suggestion. There needs to be a whole-of-government approach because there will be hundreds of events all over the country between now and 2016. Obviously, there will be a focus on sites such as Kilmainham Gaol because of the significance of the events that occurred there and the considerable number of visitors who will be going there. It is the third most visited tourist site in the city at the moment. The numbers will grow exponentially between now and 2016.

There are many events occurring around the country. I was recently at the Seán Mac Diarmada homestead in Leitrim, an OPW property on which we recently spent €30,000 re-thatching the roof. There are very interesting proposals coming from Galway on the Pearse cottage. The Pearse Museum is another OPW property. Large numbers visit it to see the work of Pádraig Pearse as an educationalist and as someone who was involved in the historic events in question. We need to bring the strands together and I very much accept the Deputy's point in that regard. The Minister for Arts, Heritage and the Gaeltacht, Deputy Jimmy Deenihan, is co-ordinating the group, which operates rightly and properly on an all-party basis. We need to make sure people know what is happening, because there will be many events.

Public Sector Staff Remuneration

Joe Higgins


5. Deputy Joe Higgins asked the Minister for Public Expenditure and Reform if his Department has any plans to use the provisions of the Financial Emergency Measures in the Public Interest Act 2013; and if he will make a statement on the matter. [49780/13]

Any workers in the public sector, be they in semi-State companies such as the ESB or the public service, who do not immediately swallow the austerity agenda of the Government and the troika are now routinely bullied publicly by Government spokespersons and the capitalist press. The semi-State organisations are not encompassed by the Financial Emergency Measures in the Public Interest Act 2013, but secondary teachers who are in dispute with the Government very clearly are. Has the Minister any plans to use the Act? Will he make a statement on that?

I thank the Deputy for his question. Obviously, the commercial semi-state sector has taken no pay cuts except at chief executive level consequent to all the legislation that was passed. That has caused some commentary among public servants generally.

The Financial Emergency Measures in the Public Interest Act 2013 was enacted on 5 June 2013. The primary purpose is to implement the proposed pay reduction for public servants earning annual salaries of €65,000 or more, and the parallel reduction in public service pensions over €32,500. These provisions have come into force.

The Act also contains a number of contingency measures to permit pay bill savings to be secured. The individual or body, which may be a line Minister or public service body, having the power to determine terms and conditions of employment may exercise that power to reduce non-core rates of pay or to increase hours worked. However, under the legislation, unions and representative associations may conclude collective agreements with their public service employers. Where a union has signed up to a collective agreement - in this case, the Haddington Road agreement - it will avoid the need for the contingency measures in the legislation to be deployed. As the Deputy knows, the vast majority of public service unions have entered into a collective agreement with their public service employers. Obviously, there is no need for the legislation to be deployed in that regard.

One union, as the Deputy knows, has declined to enter the collective agreement negotiated for the public service. It is a matter for its members to decide whether they wish to conclude a collective agreement, and the matter is shortly to be put to ballot. The legislative position is that in the absence of a collective agreement being concluded for members of that association, the Minister for Education and Skills will have to take the necessary measures to meet the targeted payroll savings in 2013 and the following years.

The reality is that the Minister uses the threat of the legislation to bully public sector workers, including nurses, teachers and local authority workers, into accepting the Haddington Road agreement against their will. In the first instance, it is quite a scandal that the Minister casts himself as a William Martin Murphy-type figure 100 years after the great Lock-out of 1913 with this type of blackmail threat.

In the event that the secondary schoolteachers organised in the Association of Secondary Teachers of Ireland reject the proposals or manifestations of austerity the Government is attempting to impose on them, what will be the role of the Minister and the legislation?

The Deputy has resorted to name-calling. The only time his party's philosophy was ever employed in actually running anything was in the city of Liverpool. That ended up with the authorities running out of money and sacking public sector workers across the city. This is the experience we have of the Deputy's policies being deployed.

I spoke to public sector workers and their representatives a year ago, opening the books, as all good employers would, to demonstrate the state of the public finances. I stated that in order not to have a dramatic reduction in front-line services, we needed to make further reductions on the payroll side. Public sector workers responded to that positively by democratic vote. One cannot have it both ways. The Deputy cannot herald the staff if they vote in a way with which he agrees, saying that is their democratic decision and that it must be respected, while disrespecting them if they vote in a way with which he does not agree on the basis of a belief that their vote is a result of harassment, bullying or other tactics.

For the record, not a single local authority worker was sacked by Liverpool City Council when it was under the leadership of the left.

Was it a great success?

It was very successful and built more houses and facilities for working class people than Deputy Howlin's Government will do over this five year period.

It was re-elected, was it?

In conclusion, in view of all the strictures and the Minister's lectures regarding public sector workers generally, hitting in particular low and middle income public sector workers, where is the Minister's policy left by the revelation of recent days of the sweet shops in hospitals being raided for tens of thousands of euro extra for chief executives? A huge gulf of inequality is being created between them and the workers at the coal face. Does that not make a mockery of the Minister's policy?

It does not make a mockery of it inasmuch as the policy must be implemented. I have set out to make the adjustments on the basis of targeting those who are best paid. If there are means used to circumvent that, it is something I regret. I have placed a cap on public sector pay that has been implemented across the public sector. We have gone further under the terms of the financial emergency measures in the public interest legislation and made additional reductions. Workers across the public sector, but particularly those in the Civil Service, earning more than €65,000 have made a very substantial contribution to making those deductions. We will ensure that public sector pay, as determined by Government, is implemented across the entire public sector.