Vol. 1034 No. 5
90. Deputy Mairéad Farrell asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if he will outline the process and procedures by which a line Department would come to his Department seeking permission for the release of funding for a pay claim; and if he will make a statement on the matter. [10525/23]
I ask the Minister to outline the process and procedures by which a line Department would come to his Department seeking permission for the release of funding for a pay claim.
The public service Exchequer pay bill is estimated to be almost €24 billion in 2023, which accounts for almost one third of current expenditure for the year. Details of departmental allocations are set out in the 2023 Revised Estimates Volume. Departments are required to meet pay costs from within these approved allocations. Pay in the public service has been governed by a system of collective agreements since the Croke Park agreement of 2010. These agreements have helped to ensure that public pay is managed in a sustainable way while enabling reform of public services and changes to work practices. As the Deputy is aware, discussions took place with public service unions and associations last year following the triggering of the review clause in Building Momentum by public service unions and associations due to the increased cost of living. The outcome of these discussions was a set of proposals put forward by the Workplace Relations Commission, WRC, to extend Building Momentum for a period of 12 months to the end of the year. The cost of these pay adjustments under the extension is €1.6 billion over 2022, 2023 and 2024.
The original agreement also provided for a sectoral bargaining fund to be established. This was equivalent to a 1% increase in annualised basic salaries and was made available to be used as a sectoral bargaining fund. However, section 5.6.2 of the agreement provides that there will be no cost-increasing claims for improvements in pay or conditions of employment by unions, Garda and Defence Forces associations or employees during the agreement. Sectoral pay claims are a matter for the relevant Department in the first place. There are established industrial relations mechanisms in the public service where pay claims can be processed. The WRC and related institutions provide advice and assistance on industrial relations matters in the workplace to employers, employees and their representatives.
The reason I ask is because of a current industrial dispute regarding adult education tutors. As the Minister will be aware, this is a long-running campaign and some of the issues date back to the Haddington Road agreement. There have been multiple meetings at the WRC. In March 2020, three years ago this month, the Labour Court made a recommendation that the Government, of which Deputy Donohoe was then Minister for Finance, would make them an offer. In July 2022, the Government made a promise to them that an offer would be on the table by the end of September but, in spite of all of this, they are still waiting. Only a fortnight ago, the TUI and SIPTU had a meeting here and they informed us that the Department of Further and Higher Education, Research Innovation and Science wants to make them an offer. The real question is what is the hold-up at this point. I know they say a week is a long time in politics. If that is the case, these workers have really been waiting a lifetime.
I am very much aware of the importance of the work that adult education tutors perform across our society. There are 3,300 of them working to support the adult education sector and they work across 16 different education and training boards. However, the terms and conditions of adult education tutors are a matter, in the first instance, for both the Department of Education and the Department of Further and Higher Education, Research, Innovation and Science. My officials are working closely with colleagues in both Departments in regard to the finalisation of a Labour Court recommendation regarding the alignment of this group to any existing salary scale in the education sector.
The reason I asked initially about the processes and procedures by which a line Department seeks permission for the release of funding is because there could sometimes be seen to be a pattern in this regard. The unions representing workers in a sector go to the line Department, and I understand that the Minister is saying this is where they need to go. However, the line Department might say that it supports them and that it can pay for this through existing funds, but that it cannot get the Department of Public Expenditure, National Development Plan Delivery and Reform to sign off on it. It is something I have heard a number of times and it seems to be the situation here again. The unions engage with the relevant Department and that line Department gives the green light, but it then says it needs the Department of Public Expenditure, National Development Plan Delivery and Reform to give it the green light and, as a result, the process reaches an impasse.
I understand that one of the Department of Public Expenditure, National Development Plan Delivery and Reform’s primary functions is to manage expenditure in a prudent fashion but when we have the Labour Court recommendation, the support of the relevant line Department and a Government commitment to make an offer, the question is whose decision it is and who is in charge. It is clear that someone needs to take ownership of this issue. I ask the Minister to give a commitment that this will be done because the line Department is saying it is up to his Department.
My Department fundamentally has to be satisfied that any offer, any agreement that is made, is consistent with our overall approach to public pay. It is vital that we do this because we need to ensure that all public servants are treated equitably and fairly. My Department does have a role to play in ensuring this consistency is in place across all of our public servants. As I said to the Deputy, my Department and my officials are working with the relevant line Departments on this matter. We will continue to play a role to see if this can be resolved in a way that meets the different recommendations we have, but also, critically, is consistent with the overall wage agreement we have place.
91. Deputy Cathal Berry asked the Minister for Public Expenditure, National Development Plan Delivery and Reform when an improvement in the Naval Service patrol duty allowance will be implemented in accordance with the recommendations in the high-level action plan; and if he will make a statement on the matter. [10763/23]
As part of the Government's high-level action plan to transform our armed forces over the coming years, there was a commitment to increase the size of the patrol duty allowance for the Naval Service. I would be grateful if the Minister could update the House on where the proposal is at the moment.
As the Deputy will be aware, these are matters first and foremost for my colleague, the Tánaiste and Minister for Defence, to be consistent with the answer I have just given to Deputy Mairéad Farrell. However, I will certainly address the Deputy's question from the perspective of my own Department.
A series of enhancements to pay and terms have been introduced for the Defence Forces in recent years, including, for example, enhancements arising from recommendations of the Public Service Pay Commission in 2019.
Specific improvements and incentives for Naval Service personnel have also been approved in recent years. These include the introduction of a seagoing commitment scheme and a seagoing tax credit scheme. More generally, members of the Naval Service also benefit from the terms of the public service pay agreements. These are three additional pay adjustments totalling 6.5% over this year and last. As I said to Deputy Mairéad Farrell, the extension in place acknowledges the higher than anticipated rates of inflation that have emerged since 2021.
Deputy Berry referenced the high level action plan and the patrol duty allowance. This allowance was referenced in that plan, which was agreed by the Government last July. I am working with the Tánaiste to understand how we will be able to progress work on a number of different elements within that plan.
That is great. I thank the Minister for the reply. I accept there have been some minor improvements as part of the general public sector package, but also some specifically for the Defence Forces. I was focusing on the patrol duty allowance because it is such an important allowance given the Naval Service is in crisis from both a crewing and ships perspective. I thank the Minister for updating us on the fact there is at least some consultation going on between him and the Tánaiste. It would be useful if the Minister could provide at least a tentative timeline for when we will get a final decision. Is it possible to get an approximate date for a final decision so we can bring some certainty to proceedings?
As I know the Deputy is aware given his involvement in these matters, we have already made three different pay actions following on from the high level action plan the Government agreed, as I said a moment ago, last summer. I am engaging with the Tánaiste on a number of these recommendations. It is difficult for me to give a timeline on that at this point because we have some further work to do, but the Tánaiste is looking at how we can promptly implement some of the important recommendations that came from last summer's plan. I am working with him on this. He has made it clear to me the urgency of these matters from a recruitment and retention point of view. I very much hear the Deputy's view on the same theme as well. All I am seeking to do, as I hope the House appreciates, and I know the Tánaiste does, is that as we move these matters forward, we do so in a way that is fair to all public servants and that is affordable. As I said, I am aware of these matters and am working closely with the Tánaiste on them.
I entirely agree with the Minister that we must be prudent and responsible across the entire public sector. An aspect of this worth highlighting is this would be an earned allowance rather than just a basic pay improvement. It would be like overtime, so the member would have to work longer and harder to get it. I hope the Minister can take that into consideration. I accept the Government's bona fides that it has agreed in principal to increase the patrol duty allowance. The two matters that remain to be answered are the quantum of the increase and when it will be implemented. I would be grateful if the Minister could use his good offices to expedite that as soon as possible.
They are indeed two significant matters and I can understand why the Deputy is pressing them with me. He is 100% correct this is an earned allowance. Activity is taken, in return for which the allowance will be made available. However, the Deputy will be aware such allowances are not unique to the Defence Forces, despite the extraordinary work they do. We have similar allowances in place across other elements of our public and Civil Service. To reiterate the point I made to the Deputy, I appreciate the importance of this issue. I am aware of the recruitment and retention challenges for our Defence Forces and especially our Naval Service. I thank the Deputy for raising it and will take on board his points.
When I am on my feet with a few seconds left, I wish to add a word of recognition on my own behalf of the extraordinary efforts and professionalism from our public servants in Wexford last night. Many of our front-line personnel were dealing with a very difficult and risky situation and yet again they rose to the challenge with great professionalism and courage. We are all grateful to them.
I think we all echo the Minister's sentiments.
92. Deputy Mairéad Farrell asked the Minister for Public Expenditure, National Development Plan Delivery and Reform if he will detail the analysis of the inflation-supply chain delay co-operation framework that has been carried out to date; and if he will make a statement on the matter. [10526/23]
My question relates to the inflation-supply chain delay co-operation framework and what analysis has been done on it.
The key objective of the inflation-supply chain delay co-operation framework introduced in May 2022 is to safeguard public projects that were already under construction or tendered in advance of the exceptional inflation in the price of construction materials, fuel and electricity since the onset of the Russian invasion of Ukraine. While there is evidence to suggest the rate of inflation has moderated significantly, prices remain elevated at present.
The framework applies to the standard form of public works contract. It facilitates both parties to engage with one another to address the impacts of exceptional inflation and supply chain disruption and operates on an ex gratia basis. The framework sets down the approaches and the parameters within which parties to the contract may calculate additional costs attributable to material and fuel price fluctuations on an ongoing basis using price indices published by the Central Statistics Office, CSO. The measures available under the framework strike an important balance between the additional costs incurred by the State to support contractors engaged on public projects and the State’s ability to deliver the NDP, while providing value for money for the taxpayer.
The feedback being received by my Department indicates that parties are engaging and that agreements have been entered into for a substantial number of projects. This has facilitated the progression of works and has avoided substantial delays to completion by bringing a greater level of certainty to contractors as to the extent of their exposure to inflation in material and energy costs. While payments covering the cost of inflation are made monthly, the total additional cost attributed to inflation for each project will not be known until it is completed and the measures introduced are intended to operate until completion, or where they are no longer required. Increases due to inflation only arise where the CSO indices specified in the framework on the date that the monthly interim payment is calculated are greater than those same indices at the point at which the tender for the project was submitted. Cost recovery for inflation is only available on payments made from January 2022. Any increase that is determined as attributed to inflation may be shared between the parties, with the State bearing up to 70% of the additional cost. Any additional costs that are identified are to be met from within the capital ceiling allocations for each approving authority.
Gabhaim buíochas leis an Aire Stáit. There is no question that the cost of building has increased. The cost of underlying materials, be they concrete, timber, steel and so on, has increased. The cost of energy has also increased. These are the inflation effects we are dealing with as a result of this war. This will obviously have a knock-on effect on the end price and I completely get that. However, it was recently pointed out in The Irish Times that local authorities were paying up to 50% more for social homes in 2020. It was concerning and I flagged it. The inflation-supply chain delay co-operation framework was introduced and is there to see the State bear up to 70% of the additional inflation-related costs. This was to ensure key NDP projects and housing went ahead and was the right thing to do. I am wondering what oversight is taking place of the framework, especially in the case of local authorities, which may not have the same amount of resources.
I thank the Deputy for acknowledging the framework was the right thing to do. We were in a situation where builders or construction firms were unlikely to be able to complete projects because they were no longer able to complete them for the amount of money that had been contracted, as the increase in inflation had not been foreseen. This would have left us in a position where we would have to retender them and the State would possibly have to pay even more.
The feedback coming from the local authorities is that their projects are no longer in danger and are going to be completed. They have not been awarded extra money. We have not gone out to local authorities and told them we are increasing their budget to meet these; they must instead meet them out of their existing capital envelopes, though they have been allowed renegotiate the prices. It is not entirely the Government picking up the tab for everything.
There is risk sharing. While the State may pay up to 70% of the cost, the construction firm must take on some of what is there. We do not have aggregate data yet because we do not know at this stage how many contracts were affected and we will not know that until they are complete. Equally, each Department is responsible for keeping track of its own expenditure. The Department of Public Expenditure, National Development Plan Delivery and Reform looks at this at an aggregate level but we are not tracking individual projects. We are looking at the total amount of money that has been allocated to the Department of Education, for example, but not for an individual school it is building.
I appreciate that response. When this framework came into being, I looked into it and discussed it with the Minister of State's officials. I have always said that what we must ensure is that there is robust oversight to ensure nobody is trying to game the system. I understand completely that there is an increase, and all of that, but of course we must ensure that what I referred to does not happen. When it comes to public works contracts, issues such as bid-rigging, low-ball offers, etc., have been flagged for a long time, as acknowledged by the Competition and Consumer Protection Commission, CCPC, and the Department of Enterprise, Trade and Employment. Only last year, Reuters reported that the Spanish competition authority had fined six of that country's major construction companies for engaging in price collusion over 25 years. I understand that five of these companies have been heavily involved in major public works contracts here. It is not, therefore, that I am saying something fanciful or anything like that. Concern does arise that those who engage in such practices would try to make hay from this situation. For those authorities that do not have the capability to ensure none of this kind of thing can happen, what sort of oversight is coming from the Minister of State's Department to ensure it does not occur? What assistance is available to ensure this does not happen?
It is a fair question. Individual Departments are allocated money at budget time. They are given the independence to spend that money with the oversight of the Office of the Comptroller and Auditor General. It monitors their expenditure, audits them and then produces a report on each Department. The relevant committees of the Oireachtas can then bring the Accounting Officers before them and question them on the expenditure and what type of anomalies exist. The job of the Department of Public Expenditure, National Development Plan Delivery and Reform is to ensure that the individual Departments act within their budgets and deliver what they said they would do within the amount of money they have been allocated. We also, however, have this additional responsibility that we are now taking on, namely NDP delivery. This is a focus which goes beyond just approval and appraisal of projects and also includes ensuring that projects happen, that they are pushed out and that we assist individual Departments in finding ways to ensure their projects do proceed. Overall, though, there is a balance here. Individual Departments are responsible and will continue to be responsible for their own expenditures. The Department of Public Expenditure, National Development Plan Delivery and Reform is ensuring they stick within their budgets.
