Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

Public Procurement Contracts

Mairéad Farrell

Question:

62. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform the progress to date of the interim procurement reform board under the remit of his Department; and if he will make a statement on the matter. [56103/21]

What is the progress to date of the interim procurement reform board under the remit of the Minister of State's Department?

The interim procurement reform board was appointed by the then Minister for Public Expenditure and Reform in May 2017 to provide oversight of the delivery of the procurement reform programme, advise the Government on national public procurement strategy and advise on the objectives and business plans of the Office of Government Procurement. The board meets quarterly and presents an annual report to me, as Minister of State with special responsibility for public procurement. The most recent report, for 2020, was published in August and is available on the OGP’s web page on gov.ie.

The board comprises 11 members, two of whom are independent members recruited from outside the public sector, eight are senior public servants drawn from a wide range of Departments and the chairperson is the former Secretary General of the Department of Defence, now retired. The terms of reference of the board include that it will provide oversight to the implementation of the public procurement reform programme, which has had considerable success to date. Governance arrangements have been established to foster collaboration and co-operation across the OGP and the main sectors of health, local government, education and defence. Representatives of health, local government and education are included in the board’s membership.

Through the development of a suite of centralised arrangements, the Government’s purchasing power has been leveraged by speaking to the market with one voice. Procurement reform has delivered a programme of policy supports for SMEs and built an awareness in industry regarding the opportunities arising from public procurement. The board promotes active engagement with these arrangements across the public service.

The OGP, in consultation with the board, has been developing proposals on the refinement of public procurement following engagement with our colleagues across Government and industry. These will enhance public procurement, building on the progress to date, with a more strategic focus and increased emphasis on sustainability, social responsibility, SME access, innovation, digitisation and professionalisation.

The national children's hospital was initially estimated to cost €650 million but the latest estimate stands at €2.4 billion, an increase of approximately 270%. The national broadband plan, initially estimated to cost €350 million, is now estimated to cost €5.7 billion, an increase of 1,530%. Behind schedule and over cost are hallmarks of procurement failure and the OGP does not collect data on the specific reasons for cost overruns. It seems that from a public policy perspective, this kind of information would be crucial. The procurement reform board needs to get a handle on the reasons for these cost overruns.

SI 284/2016 requires contracting authorities to prepare a written report for every procurement contract and also empowers the Minister of State to request other information in the form of a statistical report. Will he commit to gathering those data, either through the procurement reform board or by asking the OGP to do it?

The Government has a huge capital investment programme and the OGP oversees roughly €16 billion in expenditure on goods and services. The idea of that is to centralise that spend to achieve three main objectives, namely, value for money, quality and transparency. Added to that, in looking at strategic procurements, we seek social conditions and green procurement.

The Deputy asked where we find where matters have gone wrong, how we can build on that and so on. We require that contracting authorities report back on their non-competitive or non-compliant procurement that takes place during the year-----

I thank the Minister of State.

It will please the Minister of State to learn I have a Bill forthcoming that relates to public procurement. One of its aims is to improve the approach to procurement data collection. Another Bill I have introduced, the Regulation of Tenderers Bill, which has passed First Stage, attempts to address the issue of bid rigging, something that everyone now understands is a problem. We often hear that Ministers want us to come up with solutions, and there are solutions in my Bills. I hope the Minister of State will support my Bill, which seeks to improve the approach to procurement data collection. It is really important in order that we can collect data that will help inform policymakers of the causes of cost overruns.

I thank the Deputy. Time is up.

Data collection is essential and I am glad the Deputy will, I believe, support the forthcoming planning and procurement Bill, which I hope will achieve cross-party support along with social conditions and green public procurement. As for her own Bill, I am happy to engage with her and see what she is trying to achieve. I am absolutely committed to open data and transparency, which will help us to achieve our goals in public procurement. She outlined occasions where public procurement has not succeeded in various contracting authorities, but it has to be recognised the vast majority have delivered value for money and furthered the aims of the Government and the people.

Public Spending Code

Gerald Nash

Question:

63. Deputy Ged Nash asked the Minister for Public Expenditure and Reform if he will provide information on planned changes to the public spending code against which proposals from Departments and State agencies will be appraised in respect of the need to comply with the aims of the climate action plan and sectoral carbon budgets; and if he will make a statement on the matter. [54955/21]

We cannot legally meet the binding targets of net zero unless we radically change how we do things. The Department of Public Expenditure and Reform is the parent Department for the national development plan, which he has stated will see us spending an additional €116 billion over the next ten years, during its lifetime, on major infrastructural projects. The legal, moral and existential demand to slow and arrest climate change should be at the heart of every project his Department promotes. How does the Minister plan to change the public spending code to align it with our climate goals?

The public spending code is the tool the Government uses to evaluate the consequences of capital investment decisions. Every public investment project with a value above €20 million must conduct an analysis of the potential costs and benefits associated with that project, using rules set out by my Department. It is critical, therefore, that the public spending code provide a realistic assessment of the likely climate and environmental consequences of these decisions.

My Department has a full programme of works for the evolution of the public spending code to ensure it is compatible with the Government’s enhanced climate ambition. In the first instance, the priority will be to increase significantly the cost associated with any release of additional greenhouse gases into the atmosphere. Each cost-benefit analysis must provide an assessment of the net impact of the proposal on greenhouse gas emissions. These emissions are then priced according to a schedule of values based on the estimated marginal cost society will incur to reach specific climate targets. Any project that results in greenhouse gas emissions must price these emissions at what it is to likely to cost society to reach our climate targets by adopting an offsetting measure that will reduce emissions.

In 2019, my Department tripled the price of carbon applied in the code. This reappraisal of the cost of carbon was based on the estimated costs associated with achieving a 30% reduction in emissions by 2030. Since then, the Government’s climate ambitions have been considerably strengthened. Ireland now intends to cut greenhouse gas emissions by 51% by 2030 and to become a carbon-neutral economy by 2050, with any remaining emissions balanced by the removal of emissions from the atmosphere. This means the price applied in the public spending code must be updated to reflect this enhanced ambition. In addition, work has commenced with the OECD on evolving further aspects of the public spending code.

Additional information not given on the floor of the House

A new model for assessing the emissions impact of infrastructure investment will be progressed to ensure the full range of potential consequences for this type of investment are captured and valued appropriately. This work will consider how such assessments are performed at the moment and what reforms might be implemented to improve these assessments. The project will also examine how investments that may be vulnerable to the impacts of climate change should be appraised.

Finally, work will be progressed on understanding the role of an instrument like the code, in a scenario where net-zero greenhouse emissions must be achieved by 2050 and the role the public spending code can play in the achievement of broader environmental objectives. Ultimately, the objective of this programme of work is to allow the Government to take decisions that are fully informed by the best possible evidence on the consequences of these decisions.

When will that work conclude? This is critical. I am not sure the Minister and everybody in his Department, or indeed the Minister for Finance and his Department, understand the absolute centrality of their Departments in meeting our climate change ambitions. The Minister mentioned that the reference cost of carbon will have to change again if we are to align the national development plan and the Government's ambitions more generally with our climate goals. When precisely will that happen?

Fiscal policy, tax spending and climate are all intertwined, and the Minister's Department will have to get used to saying "No" to projects it would routinely have passed and promoted until relatively recently. On that note, it would be useful to understand how involved his Department was in the making of the recently announced carbon budgets.

It is important to say that the recently published national development plan, NDP, contains a comprehensive set of climate methodologies, against which all major capital investment projects will be assessed. My Department and that of the Minister, Deputy Eamon Ryan, worked very closely and collaboratively in the preparation of the NDP in that regard.

As I set out in the original reply to this question, we have now considerably strengthened the greenhouse gas, GHG, emission reduction targets to 51% by 2030. As the Deputy has acknowledged, that means that the public spending code must be updated to reflect this enhanced ambition and my Department has a full programme of works to ensure that the code remains fit for purpose. Since the projects initiated will give rise to emissions over their lifetimes, the assessment of public investment projects should include an appropriate valuation of the cost that society will bear in dealing with the emissions that a project will give rise to.

With respect, that reply is the kind of “blah, blah, blah” that Greta Thunberg has accused others of. We must be more precise and how we describe this. I am interested in establishing exactly what kind of metrics the Minister’s Department is going to apply in respect of approving those projects that will be significant in allowing us to meet our carbon reduction and emission goals more generally.

One of the projects, for example, that would allow us to do that which seems to be still on the blocks is the DART+ initiative, which will ultimately take the DART to my home town of Drogheda in the constituency of Louth and east Meath. The project seems to me to be a no-brainer and it strikes me that a strong climate-informed public spending code would see that project being initiated in earnest as soon as is humanly possible. I again ask the Minister when the reference cost of carbon will be changed and updated. We cannot wait until next year or the year after; we need to know now.

I reassure the Deputy that this matter is a priority for my Department. Work on this is ongoing and I anticipate that it will be completed shortly. As the Deputy is aware, a shadow price of carbon is the value that we place on these projected future emissions from projects. I reassure the Deputy as well that when he looks at the national development plan, he will see that we have given an envelope of funding of €35 billion, for example, to the Department of Transport. The Deputy is aware of the overall emphasis in respect of the ratio that we have agreed for spending in this regard, namely, that of a 2:1 ratio in respect of investment in public transport versus investment in road infrastructure. We have also carved out an annual commitment of €360 million for investment in a range of active travel measures during the lifetime of the programme. Therefore, my Department and that of the Minister, Deputy Eamon Ryan, are working closely together. This format does not really allow us to get into the detail, but I would welcome engagement with the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach on the detail of how we are connecting this analysis and how we are assessing the impact of the shadow price of carbon concerning individual projects. It is difficult, however, to get into the detail in this format.

Yes, it is, but we can change the rules if we do not like them.

Departmental Policies

Mairéad Farrell

Question:

64. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform the issues the Open Government Partnership will be addressing with him; and if he will make a statement on the matter. [56104/21]

Regarding the Open Government Partnership, OGP, I ask the Minister to advise us concerning the issues it will be addressing with him and if he can give us some more detail in that regard.

Open government is a culture of governance that promotes the principles of transparency, integrity, accountability and stakeholder participation in support of democracy and inclusive growth. Ireland is fully committed to upholding the Open Government Partnership principles of open and transparent government. Significant progress has been made in progressing the programme for Government commitment to "Continue and reinvigorate participation by the public sector in Open Government Partnership". Milestones achieved to date, with civil society, include: the provision of open government in Ireland webpages on gov.ie; the co-creation of terms of reference for the open government round table multi-stakeholder forum; a public call for expressions of interest to join the open government round table multi-stakeholder forum; a public call for submissions for the next and future open government national action plans; and the nomination of public sector round table members from relevant Departments. Ireland is also in the running for an international Open Government Partnership impact award for the Irish Citizens’ Assembly and our deliberative democracy journey.

The first meeting of the open government round table, to be opened by my colleague, the Minister of State, Deputy Ossian Smyth, will take place online on 29 November 2021. There are no predetermined issues or commitments to be addressed at this stage of the process. It is a cornerstone of the process that the round-table members will collaborate on the issues to develop the next open government national action plan commitments through this multi-stakeholder process, with the active engagement of citizens and civil society.

The round-table members will have the opportunity to consider the breadth of submissions received from the public call; updates on relevant programme for Government commitments and other activity, for example, the transposition of the EU whistleblowing directive; ethics legislation; the review of the Freedom of Information Act; and open data, etc. The national action plan, which emerges for the round table's deliberations, will focus on the Open Government Partnership values of transparency; civic participation; public accountability; and technology and innovation enablers.

I welcome the Minister’s response. Many people would agree that there have been major concerns regarding transparency and accountability. I do not need to rehash those concerns because I think we have debated regularly in this Chamber. It is welcome that there will be an open government round table multi-stakeholder forum and that the Minister of State, Deputy Ossian Smyth, will be attending. Equally, however, it is important that the collaborative effort consists of more than discussion and that firm action will be taken by the Government in this regard. It is important as well that the Government listens to what comes out of that process and that a real strategy emerges to improve accountability and transparency in the Government. I say that because we have a deficiency in that regard. We can see that with the Government’s review of the freedom of information legislation, and we need legislation to be introduced to strengthen all those aspects.

I point to the work streams we have under way in this space, because it can seem quite abstract when we talk about it in respect of what it means in practice. For me, it means transposing the EU whistleblowing directive and strengthening the protected disclosure legislation. The Deputy is aware that I will shortly be bringing forward legislation in that regard. We have commenced a review of the ethics legislation and that is a significant body of work. We still have outstanding recommendations from tribunals of inquiry that reported several years ago and I am determined to make progress in that area.

As the Deputy is also aware and has acknowledged, we have commenced a review of the Freedom of Information Act. That will be a comprehensive and genuinely collaborative review. The Deputy will be aware too that we have legislation on the way on the regulation of lobbying. I acknowledge that the Deputy has also brought forward legislation in this regard. Therefore, I think that I have demonstrated my good faith in respect of open government through the various reforms under way in the Department.

I will also be introducing legislation on protected disclosures. It will be intended to strengthen the legislation in this area, because it does need to be strengthened. Turning to freedom of information provisions, I have been clear that the current regime needs to be strengthened and that is why I have brought forward legislation and submitted amendments in that regard. The same goes for the issue of lobbying. When we have a situation where Bills intended to strengthen transparency and accountability are ready to go, then the Government should support them. This should be a collaborative effort. When Bills already exist, then they should be supported. Regarding regulation of lobbying legislation, that could have been implemented when I introduced my Bill on this subject, rather than kicking the can down the road for nine months. When legislation exists already, then, I will give the Minister credit if he supports the passing of these Bills.

I acknowledge the work that the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach has been doing on the pre-legislative scrutiny of the proposed protected disclosures (amendment) Bill because, as the Deputy is aware, we are obliged to transpose that EU directive by the end of this year. I look forward to receiving the committee's report. It was a comprehensive scrutiny process and I anticipate that we will be getting that report shortly. We are now at an advanced stage of the drafting of the Bill, in conjunction with the Attorney General, but I want the committee to be afforded the opportunity to table its ideas, proposals and the outcome of its scrutiny before I bring forward this proposed Bill. I am now in the final stages in respect of the drafting of the heads of the regulation of lobbying Bill and I anticipate that will come up over the course of tonight's discussion.

In the coming months, we can make a lot of progress, whether through the Deputy's Bill or the Government Bill, to introduce important reforms in this area.

Office of Public Works

Róisín Shortall

Question:

65. Deputy Róisín Shortall asked the Minister for Public Expenditure and Reform if an update will be provided on the overpayment of rent at the Miesian Plaza; the contacts which his officials have had with the landlord over the past six months; and when he expects to recoup this overpayment. [56170/21]

I again raise the matter of the significant overpayment of rent on the Miesian Plaza offices on Baggot Street which house the Departments of Health and Children, Equality, Disability, Integration and Youth. I raised the matter with the Minister in April and June. What progress has been made in recouping the substantial amount of money that is owed to the Irish taxpayer?

The rent being paid by the Commissioners of Public Works in respect of the offices at Block 1, Miesian Plaza, is in accordance with the terms of the lease. However, the Office of Public Works, OPW, has previously acknowledged in reply to parliamentary questions that an issue arose on which they should have engaged with the landlord and sought to recalibrate the rental rate as a result of the new measurement standard, international property management standard 3, IPMS 3, introduced in early 2016. This should not have happened and the Commissioners of Public Works regret that this error arose.

Since the issue was identified, the OPW has continued to engage with the landlord with respect to the measurement standard applied. In recent months, further discussions have taken place between the OPW and the landlord, including meetings on 3 June, 24 August and 23 September. At these meetings, there was constructive discussion around possible solutions towards resolution of the measurement issue. The Deputy will appreciate that the matters under consideration involve complex commercial property transactions and discussions are at a sensitive stage. While progress has been made, discussions are ongoing and the OPW anticipates a further meeting with the landlord will be held within the next two weeks.

Both the OPW and the landlord are committed to continuing this process with a view to establishing if a solution that is acceptable to both parties can be reached.

It is estimated that the loss to the taxpayer is approximately €344,000 per year which, over the lifetime of the lease, would come to approximately €10 million. It is not a small matter, it is a significant matter. The Minister of State has said to me on two previous occasions, in April and June, that the OPW very much regrets that errors were made so there is no question but that errors were made. That regret is not enough. Concrete steps must be taken to recoup the outstanding moneys owed and to put the rent on a proper footing.

The landlord is Mr. Larry Goodman, trading as Remley Developments. Does the landlord accept that an error was made and that the measurements that were taken by the OPW need to be corrected?

The Deputy will appreciate that I am not getting involved in a commercial negotiation on the floor of the Dáil. The Deputy has served as a Minister in the Government so she will know it would not be appropriate for me to do that. I have said in my reply today and in previous replies that the Deputy is correct that the OPW regrets that the issue arose in the first place. The OPW never attempted at any stage to conceal it and admitted from the very start that an error was made. The Deputy is correct that the impact to date is in the region of €1.4 million. We are hoping that over the next fortnight, there will be a further meeting. I told the Deputy when the matter was most recently raised with me in the Dáil that face-to-face meetings between the landlord and the OPW were due. Since then, three meetings have taken place and another will take place. We hope to be in a situation whereby we can move forward in a collaborative way but the Deputy will appreciate, as I said in an earlier part of my reply, that it is complex and commercially sensitive. I hope we will be able to resolve this matter and when we do, I will be able to provide further updates to the Dáil.

I am sure the Minister of State appreciates the fact that this issue was examined by the Committee of Public Accounts. It was also highlighted by Cianan Brennan of the Irish Examiner. I raised the matter with the Minister of State in April and again in June. It would seem that no substantive progress is being made, apart from the general aspirations that the Minister of State reiterated in his reply. I only received his reply at 5 p.m., even though this was a priority question to be taken tonight.

Since I spoke to the Minister of State about this issue in June, there have been two meetings and he has said there is another coming up in two weeks' time. Will the Minister of State undertake to provide me with details of the outcome of that meeting in two weeks' time? Will he ensure that clear instructions are given to officials in his Department to bring this matter to a conclusion so we can get to a point where there is an acceptance by the landlord and that the taxpayers will get back the money they are owed?

I cannot do that and the Deputy knows that. I cannot negotiate on the floor of the Dáil on a commercially sensitive matter.

I did not ask the Minister of State to do that.

Excuse me, I am replying to the Deputy. I cannot do what she has asked. Three meetings were held on 3 June, 24 August and 23 September. Another will take place and if subsequent meetings have to take place, the OPW will do that in a constructive fashion. We will do that on the basis that we want to get resolution to this matter. While this has been investigated by the Committee of Public Accounts, I wish to put on the record that the OPW has engaged not only with the Committee of Public Accounts but also with others on this matter. We have at all stages co-operated to try to make sure that measures have been put in place to ensure that events such as this do not happen in the future.

I appreciate the Deputy's level of concern. As Minister of State with responsibility for the OPW, I am also concerned. Nobody has a monopoly of concern over this matter. I am a former member of the Committee of Public Accounts. I hope to have resolution but I cannot guarantee anything to the House and I want to be clear about that. I will revert to the House as soon as I have an update.