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Dáil Éireann debate -
Thursday, 28 Apr 2022

Vol. 1021 No. 3

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

National Development Plan

Mairéad Farrell

Question:

78. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform the status of the national development plan; the impact of cost inflation on same; the projects which might now need to go back out for tender; and if he will make a statement on the matter. [21488/22]

An chéad cheist maidir leis an national development plan, NDP, and the impact of the cost of inflation on the plan, as well as the projects which might need to go back out for tender and the Minister's views on this.

The €165 billion national development plan to 2030, published last year, sets out the Government’s overarching investment framework and broad direction for investment priorities for this decade. The NDP also sets out the actions that are being taken to strengthen delivery, maximise value for money and ensure to the greatest extent possible that projects are delivered on time, on budget and with the benefits targeted at the outset.

As Minister for Public Expenditure and Reform, I am responsible for setting the overall capital allocations across Departments and monitoring monthly expenditure at a departmental level. My Department is also responsible for maintaining the national frameworks within which Departments operate to ensure appropriate accounting for and value for money in public expenditure such as the public spending code. Management and delivery of individual investment projects within the allocations agreed under the NDP and within the national frameworks is a core responsibility of every Accounting Officer and Minister.

Regarding the context for the delivery of the projects funded by the NDP allocations, my Department continually monitors construction sector trends, including inflation. As the Deputy is aware, there have been significant and sustained increases in the prices of a broad range of commonly used materials in the construction sector throughout 2021, in the aftermath of the pandemic and as a result of the Russian invasion of Ukraine. If these developments persist for a prolonged period, they would represent a risk to delivery of the ambitious public investment programme set out in the NDP. In response to this risk, I introduced a series of measures. In November 2021, the Office of Government Procurement, OGP, issued procurement guidance to assist public bodies in managing the challenges they face concluding live tenders. In January this year, the OGP introduced measures applying to new public works contracts, including a reduction in the fixed-price period and a mutual cost recovery within the fixed price period for material price changes in excess of 15%. I can make some further points in the follow-up responses.

Tá sé sin suimiúil. Yesterday, the Minister might have seen that the Joint Committee on Transport and Communications heard serious concerns from representative bodies of construction companies. They spoke of the need to reform public works contracts for the construction of transport infrastructure. They said many contractors were having to pull out due to the inflation in the cost of building materials and other issues the Minister outlined. The contracts they enter into are often fixed price. Someone may have entered into a contract years ago and is now locked into a price, having based the estimates for material on prices from two years ago. We know that much has happened in the last two years and that there has been a sharp rise in inflation. Has the Minister considered the introduction of variation clauses in new or existing contracts? Does he have any views on that?

We have made changes for new tenders and new contracts, allowing for indexation of the tender price prior to the awarding of the contract. New contracts provide for mutual cost recovery to allow for recovery by the contractor of inflation above a certain percentage. I acknowledge that the level of inflation being experienced in construction is placing real pressure on contractors conducting live contracts because of the fixed-price nature. I have asked my officials in the Office of Government Procurement and the national investment office to examine the issue in detail. They have consulted the major capital spending Departments and bodies. I am engaging actively with them. I need to strike a balance. I must ensure that taking up public works contracts remains a viable proposition for contractors. I accept that principle. On the other hand, I have a duty to taxpayers to ensure that our large capital budget this year goes as far as it possibly can in the delivery of the NDP. The issue is under active consideration. I recognise the pressures and will bring some proposals shortly.

It will be interesting to see those proposals. The Minister is right that, at the end of the day, we have an infrastructural deficit and we want to deliver as many capital projects as we can with the resources that we have. It is unfortunate that inflation has increased so much and that this could impact on delivery. I have a question about the capital project tracker for the NDP. Will the Minister look at that? Will additional information be provided, especially if projects have to go to tender again, which would cause further delays? Will there be additional information if there is an upward revision of prices? We all want to see these capital projects delivered, but inflation is a concern.

We have a capital carry-forward this year of over €800 million. That gives us some extra resources to ensure the delivery of the NDP this year. I have acknowledged that if the current level of inflation in construction persists for a long period, it will impact on the number of projects in the NDP that are delivered. We have seen some signs in respect of individual tender competitions of limited interest in the private sector. I think that is because of the significant risk they have to carry regarding fixed-price contracts under the standard public works contract. It is about finding a balance between protecting the interests of the State and taxpayers on one hand and, on the other hand, ensuring that it is a viable and attractive proposition for contractors to partner with us in the delivery of the national development plan. I have examined this issue in considerable detail in recent weeks. Building on the changes we made earlier in the year, I intend to introduce proposals to address this issue, at least in part.

Ethics in Public Office

Mairéad Farrell

Question:

79. Deputy Mairéad Farrell asked the Minister for Public Expenditure and Reform the status of his review of the ethics framework; the work that has been carried out to date examining the specific issue of tackling conflicts of interest; and if he will make a statement on the matter. [21489/22]

This question relates to the status of the Minister's review of the ethics framework and the work carried out to date on examining the tackling of conflicts of interest.

We made a commitment in the programme for Government to reform and consolidate the ethics in public office legislation. As the Deputy’s question mentions, and as a first step in meeting this commitment, I asked my Department to undertake a review of ethics legislation in advance of bringing proposals for legislative reform to Government.

Following Government agreement, this review got under way in September 2021. Formal stakeholder engagement commenced last November. A public consultation exercise, based on a detailed policy approach set out in a public consultation paper, launched in November 2021 and closed in mid-January 2022. Ten responses were received, including a limited number on behalf of individual citizens, as well as submissions from political parties and bodies such as Transparency International.

Key elements of context for the review's findings have been prepared, including a detailed survey of Ireland's current provisions and a survey of the arrangements in some comparable jurisdictions. Initial engagement has also taken place with relevant Departments and the Office of the Attorney General. I expect that the process will be completed during the course of the summer. The review's outcome will then inform proposals for legislative reform that I intend to bring to Government later in the year.

In seeking to develop a renewed legislative approach, my Department will take as its point of departure the policy framework developed for the Public Sector Standards Bill 2015. Very broadly, this involves consolidation of the statutory framework for ethics and giving effect to relevant recommendations of the Mahon and Moriarty tribunals. In particular, it would see a significant strengthening of the legal obligations on public officials to disclose, as a matter of routine, actual and potential conflicts of interest, including, for the first time, provision for the confidential disclosure of liabilities over a certain threshold, in addition to sources of income and assets. In this, my ultimate goal is to build a fit-for-purpose, easy-to-understand and user-friendly statutory framework for ethics that contributes to the quality and effectiveness of our public governance and, by so doing, enhances trust and confidence in public officials and our democratic institutions.

Gabhaim buíochas leis an Aire. That was interesting because, as we know from media reports, there is a crisis facing An Bord Pleanála and it is quite a disturbing state of affairs. We are talking about conflicts of interest. We know that conflicts of interest do not necessarily equate to corruption but, as we saw with the planning tribunal, the presence of conflicts of interest can create the conditions in which corruption could take place.

The Minister mentioned the Mahon tribunal. The three main recommendations made by Mr. Justice Alan Mahon with regard to conflicts of interests included that the Standards in Public Office Commission, SIPO, be given greater powers, for example, the power to initiate its own investigations. That did not happen. The second was that serious breaches of the Ethics in Public Office Act would become a criminal offence. Again, this did not happen. The third was to have a planning regulator with wide powers that would, to use the words of Mr. Justice Mahon, carry out "investigations into systemic problems in the planning system", including possible corruption. These powers were not given.

The Minister referred to the Public Sector Standards Bill, which was to give scope to all of these recommendations. The implementation of the Public Sector Standards Bill is the action that is urgently needed.

I assure Deputy Farrell of my personal commitment to addressing this issue. I do not believe it is acceptable that when we have spent hundreds of millions of euro of taxpayers' money on tribunals of inquiry and they make recommendations, the Oireachtas and Government do not act on those recommendations. This is why when I came into my current role I set up this review to fulfil the programme for Government commitment. There is a need to consolidate, reform and modernise the legislative framework in respect of ethics. This is what we are examining at this moment. We are also examining the recommendations made by SIPO with regard to the current regime. We are examining international best practice and the views of stakeholders as communicated in the public consultation process. The review will also consider the outstanding recommendations from the tribunals and take account of more recent developments such as the Hamilton report and the Council of Europe Group of States against Corruption, GRECO, recommendations on the reform of our statutory framework for ethics. I will be bringing forward legislation in the second half of this year.

I look forward to seeing that legislation towards the end of the year. The crises of the day often reflect the significant role we have in the area of ethics, the implementation of the Public Sector Standards Bill and different matters that are important with regard to ethics in public life. I understand from media reports yesterday that Remy Farrell, SC, will carry out a review into the crisis in An Bord Pleanála, which will be known as the Farrell report. Will the report be turned around quickly? I understand the review falls under the remit of the Minister for Housing, Local Government and Heritage, Deputy Darragh O'Brien. Is the Minister, Deputy McGrath, aware of a deadline for completion and publication of the report? That is important? We are aware from The Ditch and reports in other media that comprehensive dossiers have been submitted to the Committee of Public Accounts indicating conflicts of interest. I make clear that I understand the Minister's views on this matter. This crisis, however, like so many crises of the day, highlights the need for the implementation of the Public Sector Standards Bill. I am looking forward to seeing what the Minister will propose. A review in lieu of implementation is not a substitute.

I am not familiar with the exact detail of the An Bord Pleanála issue under review, so I am not going to comment on that. The Public Sector Standards Bill, which was brought forward in 2015, was last discussed on Committee Stage in April 2017, which was five years ago. It is in need of modernising and reform. The review we are undertaking is the best way to approach that. It is a comprehensive review. Ultimately, it is about ensuring we have openness and transparency in public life and the way in which we as elected representatives conduct our business and also how our public officials and non-elected public servants do so. The current Acts provide for the publication of codes of conduct for officeholders, non-officeholder Members of both Houses and public servants. I commit to working in a collaborative way across the House to ensure we get this legislation right. It is, perhaps, a once-in-a-generation opportunity to update the ethics framework within which we and the public servants who serve the public across this State operate. I will engage co-operatively with colleagues across the House to make sure it is the best legislation possible.

Public Sector Pay

Danny Healy-Rae

Question:

80. Deputy Danny Healy-Rae asked the Minister for Public Expenditure and Reform if he will address the unfair anomaly that persists for some public sector workers, including teachers as a result of the two-tier pay system. [21626/22]

I respectfully ask the Minister if he will address the unfair anomaly that persists for some public sector workers, including and especially teachers, as a result of the two-tier pay system that was introduced more than a decade ago, along with the other financial emergency measures in the public interest, FEMPI, cuts.

I thank Deputy Healy-Rae for raising this issue. The reduced new entrant pay scales for civil and public servants introduced in 2011 were abolished in 2013 under the Haddington Road agreement, where it was agreed to merge the new pay scales and existing scales, typically by adding the lower two points of the new scale to the existing scale. As such, there are no separate reduced pay scales for civil and public servants.

Under the Public Service Stability Agreement 2018 to 2020, it was agreed to examine the remaining salary scale issues associated with the addition of the extra points for those recruited to entry grades after January 2011. The report, laid before the Houses of the Oireachtas in March 2018, estimated the point in time cost of advancing new entrants to the public service two points along their incremental scales. The report estimated a cost of just under €200 million in respect of 60,513 new entrants, an average cost of €3,300 per full-time equivalent.

Following this report, negotiations with the public services committee of the Irish Congress of Trade Unions, ICTU, took place over 2018 resulting in an agreement on new entrant salary scales being reached in September 2018. Further detail on this will be placed on the record.

For new entrant teachers, the parties to the current agreement, Building Momentum, agreed that in final conclusion to the arrangements put in place in September 2018 as part of the previous agreement, the following measures will be implemented to resolve in full the remaining salary scale issues pertaining to new entrant teachers. New entrant teachers who have been recruited since 1 January 2011, after progressing to point 11 of the teaching salary scale, will, on their next increment date, move to point 13. New entrant teachers, recruited since 1 January 2011, who have already reached point 12 or higher on the teaching salary scale, will, on their next increment date after the commencement of the agreement, move one point further than they would under normal incremental progression. These arrangements are set out in section 4.3 of the agreement.

Furthermore, as the Deputy will be aware, Building Momentum provides for a sectoral bargaining fund, which is the mechanism available to the parties under the present pay agreement framework to make progress on various sectoral pay matters of importance to them.

The arrangements are complex but I believe the issue has been dealt with. The current agreement provides that it is in full and final settlement of that issue of new entrant pay, and all parties have signed up to it. The Deputy and I can go into more detail in our engagement.

It has been made very clear to me that the discrimination within the two-tier pay system in schools is having a deeply unsettling effect on the teaching profession. Lower pay is driving a significant number of people away from the profession.

The two-tier pay system has now been in place since 2011, more than a decade, and must be removed. Teachers who entered the system since 2011 are paid at a lower rate than their colleagues for carrying out the same work. Understandably, people are fed up and out of patience. They deserve and want more than what they are getting.

We were told by the former Minister for Education and Skills, Deputy Joe McHugh, a few years ago that he would move to resolve the issue quickly. The current Minister has now been in place for almost two years and the matter is still not resolved. I am asking the Minister to settle this once and for all because it is unfair. These teachers, especially secondary teachers, are highly qualified and have to give a lot of their time to become qualified. We are losing them. They are going out of the country and schools are having a problem retaining teachers.

This is an issue with which I am well familiar. I have discussed it directly with many individual teachers over the last decade or so. All the progress that has made has been made through collective negotiation and co-operation between trade union officials and officials in my Department and the Department of Education.

As I said, the current Building Momentum agreement specifically provides for skipping point 12 of the pay scale for new entrant teachers. The agreement states it will "resolve in full the remaining salary scale issues pertaining to new entrant teachers." That is what the current public service agreement, an agreed document between ICTU and the Government, currently provides for this and we are fully implementing that measure. We have made considerable progress in respect of that.

In a moment, perhaps I can touch on the sectoral bargaining fund, which is a channel through which any final remaining issues the unions believe are there can be dealt with. They have, for example, been raising issues about what was formerly known as the HDip and the allowance in respect of that. There is also an opportunity to have that issue addressed.

Millions have been spent educating these teachers and we cannot afford to lose them to countries like the United Arab Emirates and other places. The discrimination is having a deeply unsettling effect on the teaching profession. The Minister said an agreement has been reached or whatever. When will these teachers actually receive the pay they are being denied? That is the question. When will that happen? We are told there is already a deterioration in the quality of services being provided to the young students being taught because teachers are not staying. That has a kind of unsettling effect. When students get used to a certain teacher, it is hard for them to lose that teacher in the middle of their education.

I accept the importance of fully addressing this issue. I believe that building on the work that was completed in 2018, the new Building Momentum agreement provides for this incremental jump. It provides an additional increase of €1,700 per teacher. All those who are above point 12 also received an additional incremental jump to the next point on the pay scale. As I said, the skipping of point 12 on the salary scale for teachers is in addition to measures previously introduced in 2018, which provided for skipping points 4 and 8 on the relevant scales.

We are in a process whereby over the months ahead, we will be seeking to negotiate either an extension to the current agreement or a new agreement. It is always open to trade unions to raise any issues they regard as outstanding. We will then seek to address them through a process of negotiation. The current agreement, which is being implemented right now and being fully honoured by the Government, provides for resolving in full the remaining salary scale issues pertaining to new entrant teachers. That is what all parties have signed up to.

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