I welcome the officials from the Department of Education and Science. I draw attention to the fact that while members of the committee have absolute privilege, this privilege does not apply to witnesses appearing before the committee. Members are also reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. I call on Mr. Wyse to begin his short presentation.
Schools Building Projects: Discussion with Department of Education and Science.
Mr. Frank Wyse
As requested, I will make some brief opening remarks regarding the key features of the schools building programme. The allocation for school buildings in 2009 is €656 million, made up of €416 million for primary schools and €240 million for post-primary schools. The original multi-annual capital allocation for 2009 was intended to be €581 million, but an additional €75 million was added as part of the package of measures to boost employment in the construction sector. By way of comparison, the outturn for 2008 was €644 million and with that allocation 77 primary projects were completed. Some 9,800 new primary places were provided and enhanced facilities were provided in existing schools for 2,600 pupils. Some 27 of the 77 projects were provided under a rapid delivery programme about which I will speak briefly later. Some 18 of the projects were for post-primary schools with 1,900 new permanent pupil places provided and enhanced facilities provided for a further 8,500 post-primary pupils.
In 2008 under devolved schemes, which are smaller, some 394 primary projects and 128 post-primary projects were delivered, with an additional 4,100 permanent school places. Funding was also provided for the purchase of sites, the asbestos remediation programme, the purchase of prefabricated accommodation, the provision of furniture and equipment and the payment of a minor works grant for primary schools. This is a grant paid annually to all primary schools.
In 2008, for the first time, we introduced a rapid delivery programme to provide school places in developing areas with a rapid population growth. The aim was to provide permanent accommodation for new schools in these areas from the outside without the need for prefabricated accommodation. Under the programme, a total of 26 new primary school projects were delivered for the September 2008 opening under a very restricted timeframe. The completion of one of the schools was some weeks late owing to a technical architectural delay which lasted longer that had been anticipated. Providing this number of schools within a very tight timeframe involved off-site construction and very tight project planning. We were pleased to have very good co-operation, on-site identification, acquisition and pre-planning with local authorities. That was essential and a key feature of the approach. For a period, I chaired a joint committee with Fingal County Council for the duration of the programme. The budget is €656 million. The programme includes 20 major projects currently under construction, 81 major projects in advanced architectural planning, 62 major projects in early architectural planning, 25 major projects now cleared to start architectural planning, up to 60 major primary projects to commence on site in 2009 and 30 projects are expected to be completed and fully occupied that year.
Up to 18 of the major post-primary projects are to commence on site this year and nine are to be completed. Up to 800 primary and 300 post-primary smaller modernisation and refurbishment works are to be devolved under the summer works scheme and other initiatives. As in 2008, it is also intended to provide funding for sites, asbestos remediation, purchase of prefabricated accommodation, provision of furniture and equipment and payment for minor works for primary schools.
Changing demographic trends are of significant importance to us. One of the main factors is that the Central Statistics Office predicts a population increase of, on average, 1.5% per annum between 2011 and 2026. The national population is expected to rise from 4.2 million to 5.7 million and the population of eastern areas is expected to increase by up to 2.3% per annum. The school-going population aged four to 18 years is of interest to us and this group is expected to rise by 162,000 by 2020. Overall primary school enrolment is likely to rise from approximately 486,000 to 563,000 by 2015. Obviously, this will feed into the post-primary sector.
To assist us in our planning we are using a geographical information system to facilitate greater accuracy in the identification of need and in the planning process. This allows various data sets to be layered over a digital map of Ireland, and we may have given an advanced copy of some samples of it to the secretary. Indicative feeder areas have been established around schools and the relevant demographic information has been associated with these areas, which will then facilitate a detailed analysis. The CSO is a major data source and its information was developed by looking at the age cohort by district electoral division. Other sources included ordnance survey mapping, a geodirectory which was obtained from An Post which maps each dwelling in the country by geocoding by colour-coded sequences on maps, and from which we get quarterly updates, child benefit data updated on a quarterly basis from the Department of Social and Family Affairs and the General Register Office data on live births, which are updated quarterly.
Detailed analysis of that data for all areas is undertaken on an ongoing basis to determine the likely future school infrastructure requirements for each geographic area. We have been using this mapping system since February of last year and it has proved to be extraordinarily good. It was developed mainly internally, with some external assistance, and the cost was minimal. We intend to add to the functionality of that system to provide further information. One such example is an issue which is of concern to us, which is the need to have inventory of accommodation data, even on an initial basis, included in that system.
I emphasis we will have to do that without people travelling to schools and incurring travelling expenditure and without engaging external consultants. It must be done effectively within our own resources. We can do it through the use of existing systems, data sets and portals, which are used for other purposes. However, technical work needs to be done on the system and we hope it will be completed by the middle of this year.
I am conscious of the need to keep my opening remarks to a minimum so I will conclude. I am sure the committee will have many questions.
I thank Mr. Wyse. The presentation has been circulated to members and has proved to be very interesting reading. We will begin with questions, which I hope will elicit some more information.
I welcome the delegation. I have several questions. There is a figure of €75 million extra allocated on a multi-annual basis to boost employment in the construction sector. The needs and logjam that exist regarding forward tracking many of the projects which are so badly needed means there should be a greater response. The Minister is on the record as having said, on several occasions, that he would reintroduce the summer works scheme, which was probably one of the most beneficial schemes. Mr. Wyse mentioned the scheme allowed work to be done efficiently. It was a marvellous scheme. When it was ended, there was a series of elimination of the procedures in place, which included time costs and other costly financial elements for the Department in finally bringing a project to fruition.
We were again told in 2008 that the Minister had pilot projects in place, particularly projects that would be system-built schools. Afterwards, I heard a comment from a Department official that it did not want ramshackle schools built as replacements for prefab accommodation. The structures being proposed in those pilot schemes are very positive and acceptable structures and designs, and all of the other characteristics are highlighted within the current environmentally-conscious situation we are in. Can the delegation provide us with a report on its views on the suitability of those projects? Has the delegation assessed the efficiency of such schemes, as against the old structures and multi-architectural designs we had in the past? I am conscious that all sites must be suitable.
If any issue makes repeated headlines, it is waste regarding the rent or lease-purchase of prefabricated structures, which seem to be back in vogue with the Department at the moment. One such situation which is often mentioned and is the bane of east Galway public representatives is the national school in Eglish, Ahascragh. Every aspect of it has been covered to highlight the need for something to be done there. The response of the Department, although welcome, was that two prefabs would be installed. Local people have offered to replace the school and build a new one, and can do so for less than the cost of renting or leasing of the prefabricated buildings now promised for the site. It has been brought to the attention of the Minister and officials in the Department, who said, "No".
It is very important, once and for all, to nail the situation regarding the cost-effectiveness of continuing to use prefabricated buildings. In many cases, such buildings are imported. If we are really serious about the construction industry in Ireland——
Some 18% are imported.
——the idea of importing them goes against that. There are restrictions on tendering, procurement and all of that. I appreciate the leniency of the Chairman. Is it possible to take many boards of management, school principals, and parents' associations out of their frustration by listing the projects and making them available? There are, for instance, 28 projects under construction, which they know about but 81 major projects are in advanced architectural planning. Many school authorities are not aware that their projects are at a certain stage on that tortuous road to the building. The list is impressive for these times. Would it be possible for the Department to be more forthcoming? How can that list be reconciled with the projections on the last list?
If the officials can answer they will but they may be precluded from giving their opinions.
I welcome the officials. They have a difficult job and in my experience over the past 15 months the multiple locations of the Department does not help. I welcomed the establishment last February of the calculation and the forward planning. Do the existing nine architectural steps towards school building still prevail? They start with site suitability, briefing and site report down to the final account stage.
Are we making the best use of our existing primary school stock as we head into a difficult period? The officials might confirm whether it is the case that 75% of existing primary pupils, approximately 486,000 are taught in 25% of the existing 3,300 schools. Is that the best use of stock from a technical point of view, now that the Department can map where they are, leaving aside the question of ownership, control and response?
The data on the schools' infrastructure that the officials sent us in the Adobe format are unreadable on the photocopy. They might talk to the clerk to the committee about that problem. This is the first time we have seen a map of the country showing the location of every primary school so I would appreciate if the officials could improve the information.
I note what the officials said about resources for travel. Could they mobilise the voluntary infrastructure of the 20,000 members of the boards of management, many of whom have access to professional services or have neighbours in the community who could do this? Could the Department or the unit construct a standard condition analysis and survey report that would be distributed through the Irish Primary Principals network and the INTO, which cannot be excluded from anything? The unit could ask the school to come forward with a condition and analysis survey of the buildings to avoid waiting for the travel and maintenance section to provide it.
The numbers in the summary document we received, and in the comments made here mean nothing to anybody because we have no clue where the projects will be or when they will start. It looks wonderful for any administration to say it is spending more money than last year, doing this but nobody knows where anything is. Can we have a league table such that every school knows where it is in the pecking order? Many years ago, when I was on Dublin City Council, there was a programme to modernise the electrification system in each of the 16,000 city council flats and the late Jimmy Molloy said it would take five years and every electoral area would get one scheme done in each of the five years but if the pecking order and waiting list was changed, the entire programme will be disrupted. If principals and parents know that the extension will be built in year three, five or one it would save an amount of heartache, headache and wasted time and reduce the number of queries to the office in Tullamore from people like us on behalf of constituents. If we have the list we can say they are down for year three or give the great news that they are down for year one. A previous Minister provided for such clarity and that was changed. The officials may be constrained in what they can say on this issue but from the administrative, political, transparency and parents' point of view this would be much more satisfactory.
Following the transformation in the construction industry do we still need to use the public private partnership process? Is it not possible to get better value by going straight to the market place and getting tenderers and contractors?
I welcome the people from the building unit and the opportunity to engage with them. I assume that the almost 10,000 places created by the 2008 budget for the school building programme of €644 million refers to primary and secondary places. How many places does the allocation of €656 million for this year expect to create? The projected increase in pupil numbers to 2015 is approximately 77,000, or approximately 13,000 places per year. Will the existing space meet that increase or will new space be created with pressure on developing areas? I welcome the return of the summer works scheme this year. Mr. Wyse said that he expects it to cater for 800 primary and 300 post-primary schools. Does that cater for existing applications or must the schools re-apply this year and will there be an advertisement process?
We all know of prefabricated buildings in school yards. What do they cost? Is that an efficient and effective solution or should the money be earmarked to build new buildings rather than pay annually for prefabricated ones?
Architectural planning costs are very high. They may come down now that architects are not as busy as they were heretofore but each school employs an architect at significant cost. Is there not a simpler, more cost-effective way of doing the work, perhaps by having templates available from the Department for three or five classroom extensions or a new school, instead of employing architects to draw up almost the same plans for each school while charging the massive rates borne by school boards of management, albeit with the Department's support?
I agree with Deputy Quinn about the league table. We must consider some kind of system whereby schools know where they stand. When we raise questions on behalf of schools it is often difficult to get an answer.
Many contractors and developers may not be as busy as they were. The cost of building new school projects has fallen. Would it be possible to study the model being used in the North of Ireland whereby the contractors build the schools and the Department leases them back? It is happening in the North, where multi-million pound projects are being developed by contractors and leased by the Department of Education. We should examine that as it is a new and innovative approach.
I thank Mr. Wyse for his presentation which I watched on the monitor in my office. I thank also his colleagues from the building unit in Tullamore.
When visiting schools, as I do most Mondays and Fridays, this is an issue of great concern. Principals feel a huge disconnect between the building unit in Tullamore and their schools. Invariably I hear about phone calls that are not returned, or files being passed to new staff who are unaware of the case, or files going missing. We have built an extremely complicated procedure for schools to follow and we must streamline it. This is repeatedly brought to my attention when I meet boards of management, patrons and principals.
We all know of the window of opportunity when the Minister makes an announcement as if he was Moses coming down from Mount Sinai with the tablets of stone. How are those lists devised? What political involvement is there in the final list that is published? Is the Minister presented with a list of the 40 or 50 schools that should be part of the announcement? How much change is brought about as a result of the Minister's decision?
There is a view in schools that the process is totally unfair and that schools where someone has a relationship with a Fianna Fáil TD get a building while others do not. We have politicised the schools building programme for far too long, building on cronyism with the notion that a particular TD or Senator can deliver such a project and get the votes in return. We must change that. How are the lists devised?
Between 2006 and 2008 we spent €100 million renting prefabs — €24 million in 2006, €35 million in 2007 and €52 million last year. I presume the unit cost is around €12,000 per year per prefab. Given the downturn, will the Department be going back to all providers and demanding a reduction in the rent, given that rent is collapsing in the commercial and residential market? Should we not argue for the same discounts for schools when it comes to this huge sum of money that we must spend every year which should be spent on new schools and classrooms? We must drive unit costs down. What discussions have taken place with service providers to drive rent costs down?
A vote has been called. Deputy O'Mahony was next to speak. Perhaps he would like to speak now or he could wait until afterwards.
Many of the points I wanted to raise have been covered so I will not need much time. The importance of the list and the value for money we are getting from prefabs were the areas I wanted to address.
Of the €656 million available, how much has been spent on the RAPID programme in comparison with the rural programme? There is a perception in rural areas that the chances of a school being built or refurbished are lower because of the money being spent on the RAPID programme.
When would health and safety become an issue in those schools in need of repair and replacement? I visited a school recently in Bonniconlon in County Mayo where a special needs child is being taught in the corridor and must use the toilet in the church nearby because of a lack of facilities in the school, and where the windows are nailed shut because otherwise they would fall out.
Sitting suspended at 10.45 a.m. and resumed at 11 a.m.
Before continuing the discussion on the presentation from the Department of Education and Science building unit, I wish to refer again to the minutes which were agreed earlier. It was agreed that the serious issues raised by Barnardos relating to special education would be sent in a letter to the Minister. I indicated at the start of the meeting that I had received a fax from the Department of Education and Science and, indeed, I understood there would be a letter in my post box in the House. Having had an opportunity to have a copy of that letter made available to everybody, and having raised this matter, unusually, on the public record last week because of its seriousness, it is only fair that we also put the response of the Minister on the public record as well. Obviously, I am not arranging for any discussion on the issue today. People will have a chance to digest what the Minister said in his response. However, I wish to note the response from the Minister with the option of further discussion at a later date. Is that agreed? Agreed.
We will now continue the discussion. I call Deputy Ó Fearghaíl.
I thank Mr. Wyse and his team for the presentation. I congratulate them on the work they have been doing in recent years. The Department has obviously transformed the way it does its business and has done that to great effect. There has been comment on the work taking place in the rapidly growing areas. Members who live in the counties surrounding Dublin are particularly conscious of the effective response of the Department to the challenges in those areas. However, other members have quite correctly highlighted the difficulty that poses for people seeking school modernisation, that is, schools that have been in the pipeline for many years in areas where the local population has not grown as rapidly as it might have and who feel disgruntled that rapidly growing new areas are being accommodated with pristine new buildings while they must continue to wait. How is the Department balancing demand in those areas?
Deputy Quinn raised the issue of PPPs. When this initiative was announced I thought it was wonderful and that there would be rapid delivery of the 27 schools in question. However, the processes seem to have been particularly tortuous and slower than if the schools were being provided under the direct method. Perhaps Mr. Wyse and his colleagues would comment on that, and refer to how these bundles were put together in the first instance.
There are two post-primary schools proposed for my constituency, one in bundle No. 2 in Kildare and the other in the third or fourth bundle, in Monasterevin. It would have made sense to have those two schools run in tandem rather than having schools in the same bundle dispersed all over the country. Perhaps Mr. Wyse would tell the committee how that process might be expedited.
With regard to the value for money we are getting as a result of the changes in the construction industry, what changes have been made to the tendering systems and what level of reduction is the Department getting in the tenders for schools that were tendered for previously and must now be retendered? What reductions are there in costs?
I am from the rural constituency of Mayo. Let us say there might not have been a particularly active board of management and principal in a school, as a result of which the school is in a deplorable condition. I have a couple of such schools in mind. What mechanism is available for fast-tracking through the system schools that are in very bad condition?
My last question is about schools that get the benefit of free sites. I have in mind a school that has been given a site by the Christian Brothers. It has a value in excess of €2 million. When something like that is given as a gift to a school, what impact does it have? Is there a fast-track approach that can be adopted so the school will not lose the benefit of the site? That is what would happen if the project is delayed for a number of years. I would appreciate the officials' comments on these questions.
I have some queries for Mr. Wyse and his team. The additional €75 million is very welcome and puts the capital spend higher than last year, even allowing for the recession. How much of that is coming from other Departments? I am aware the Departments of the Environment, Heritage and Local Government, and Communications, Energy and Natural Resources had an input into assisting, particularly on the renewable energy and insulation side which we discussed at the last committee meeting. Would it be fair to say that money, either through that €75 million or another tranche, has come to the Department from other Departments? It was not a case of the Minister suddenly finding additional money within the Department of Education and Science because it simply was not there. That is the reality.
As well as clarifying where money came in from other Departments, will Mr. Wyse and his colleagues give the percentage reduction that is being achieved through the retendering process? How much have prices come down? By how much have architects' fees been reduced, where they are necessary? I understand the Minister is examining situations where architects might not be required for certain projects. Will Mr.Wyse clarify if that is the case?
I also have question on the public private partnership principle. The Comptroller and Auditor General said several years ago that these projects were 13% more expensive. We cannot allow that type of wastage in straitened economic times. Does Mr. Wyse have recent information on what public private partnership projects have been set up, how much they cost and whether the Department is reviewing those for the future?
The other issue is speed. I have been given figures of nine months to one year for turnaround for rapidly developing areas. Is that the fastest it can be done due to planning processes and so forth or can it be done faster? This is the one area of the Department where there has been a noticeable improvement over the last few years, and credit is due to all the staff involved.
The lack of transparency is another bugbear, and Deputies Hayes, Quinn and others have mentioned it. Can Mr. Wyse or members of his team tell me how many schools are in category one? I understand it is a substantial figure, but not all category one schools will be dealt within one or two years. I will not ask Mr. Wyse to give his opinion because obviously he is prevented from doing so.
Mr. Frank Wyse
I thank the Chairman and members of the committee. We have agreed that there will be a certain division of labour in responding. I will begin with some of the more general points and possibly come back afterwards.
Deputy Burke referred to the summer works scheme and I wish to confirm that it will be in operation in 2009. In order that schools will not be put to the bother of having to resubmit, we are categorising the applications previously made on which schools spent money on items such as architect's fees. We do not want this to go to waste. In most cases, it is anticipated that there will not be a substantial change in the position. One of the issues at which we will be looking in the assessment process which we have nearly finalised is relating it to what has been done in the last year or what is to be done in the next short period. Therefore, one will not give approval to a project, for example, that will not be necessary because work is about to commence on a major school project. We are examining such issues and finalising the assessment of existing applications for the scheme.
There are two issues concerning pilot projects and RAPID schools — schools we identified in particular geographical areas, mostly in the greater Dublin area but also in areas of rapid population growth. We devised a method of providing accommodation in double-quick time. Ms Kellaghan would be more familiar with the exact timeframe involved — the period from the previous September when there was not even a site to the following September when 26 of the 27 schools opened their doors to pupils. It was extraordinarily difficult for me and everyone on the team. It was nerve-wracking because everything had to be on target. We could not have delays and had a lot of difficulties in ensuring this. Our intention is to make an assessment and the feedback so far from users has been uniformly positive. I visited some of the schools shortly after they had been opened, including two in the Dublin area — Scoil Colm and Scoil Gráinne — and was very impressed with what they had been provided.
Deputy Burke also mentioned the pilot projects, as did Senator Ó Domhnaill. We are examining the possibility of having a lease and buy-back option and doing some research in that regard. There are many issues involved, mostly to do with the financial arrangements. There are difficulties with the approach suggested in some of the proposals made, but we are trying to set out the broad principles of the approach that would be acceptable to us. We have had discussions with the NDFA and it has given advice on some of the issues that might arise in the financial part of the package. The other part is relatively straightforward. It comes down to a question of the financial details. We have met five, six or seven serious contenders, all of whom have a different approach. Some say it is a lease arrangement and that at the end there will be a buy-back, somewhat akin to a PPP. Others say it is a permanent leasing arrangement because this is what they will build into their financial models. Effectively, there is work to be done on the financial models that will be the most relevant if we are to proceed with this approach.
Many members of the committee have raised the question of information. Our intention is within a short period to provide the information I have given in composite form on the website, listing the various stages projects are at, with location and category. We have done this internally in a particular format, but there is more technical work to be done because we want to make absolutely sure that it is clear, unambiguous and readable. Clearly, the information has to be updated constantly and we expect within a matter of days to have it on the Department's website.
Deputy Quinn asked about the nine stages involved. There is a simplified approach but as we have an architect on our team, Mr. Jonathan Bliss, I will bow to his greater knowledge on matters architectural and he will cover that question in more detail.
Deputy Quinn also mentioned the use of the available stock and there is no doubt that it is an issue. We have 3,200 primary schools, 690 of which have an enrolment of less than 50, while around 1,000 cater for an enrolment of less than 100. One could argue that there was a much more efficient way of doing business. With the help of the geographic information system, we are examining models. In one of the samples we provided the model of school location and their enrolments and circles indicating the distances involved. However, it is not quite as simple as that.
Definitely not.
Mr. Frank Wyse
Before I get to some of the other issues involved, even the technical ones, we could point to a group of five schools in a particular area with very low enrolments. What does one do? One must first provide accommodation; therefore, there is a capital cost which will be variable, depending on circumstances. There is also a school transport cost because children who previously were not eligible for school transport will suddenly become eligible for it or for some form of related assistance. One then moves to social issues and the attachment of rural communities to a local school. I have visited a number of small rural schools and the staff keep saying, "If we close the school, that will effectively be the end of the community because the post office was closed earlier. We will not be a community any more. It is the only school in the area."
There are technical and social issues. Probably, we will do some sort of modelling of several sample areas and consider the probable financial circumstances in an alternative approach.
The Department would want to keep that very quiet.
Mr. Frank Wyse
This is something we must do for our own——
There would be mini-revolutions throughout the country.
That report would be happy to gather dust.
I am not suggesting any change in small schools.
Mr. Frank Wyse
Absolutely not.
Let us have that on the record.
The initiative to amalgamate or close rests entirely with the patron and with the owners. The Department is merely a service provider with no control.
There are arguments for clustering and for sharing resources, if there is to be expansion. Otherwise, if the resources are not available, it is a choice between a community getting an increase in the facilities to be shared collectively or waiting in the queue.
Many schools that amalgamated were promised they would get X, Y and Z in terms of capital, and are still waiting. That is the dilemma.
Mr. Frank Wyse
There would have to be——
It is not a news item. I hope members of the media will take that on board.
Mr. Frank Wyse
It is certainly not. As is normal with any Department, we look at all sorts of models. If we have the capacity to do that through electronic means, it is nothing more than modelling. It assists our thinking processes.
I apologise to Deputy Quinn for the bad quality of the presentation. The intention was that we would make a presentation on the screen, and that was simply a guide. It is not possible, we understand from the secretariat, to make such a presentation. It is much easier to see the functionality of our geographic information system through the interactive approach of seeing——
I suggest the Department, with the clerk, explore the AV room as a possible venue.
I was about to say that. Perhaps at a future date we could do that if it was a 15 minute presentation.
Mr. Frank Wyse
We would be delighted to give a 15 minute presentation. We can even base it on particular locations, if members have preferences for locations.
Members could inform the clerk of the areas on which they would be interested in focusing.
Mr. Frank Wyse
The Department wishes to ensure that there is provision for voluntary involvement. There are instances where the voluntary factor enters into the equation when we give grants to schools which are dealt with on a devolved basis.
Deputy Quinn spoke of voluntarism also in the context of condition reports. We will use the systems to gather the information electronically from the schools. Effectively, that is the way we are thinking of doing it. We need to walk before we can run. In the first instance, we intend to gather clear unambiguous information such as the numbers of rooms, the types of rooms, the specialist accommodation in post-primary schools, and so on — we have templates already prepared for that — plus the size of sites and any other clear unambiguous factors the school can easily provide on a drop-down menu. Then we need to think how we might expand it further because I suspect we might have to spend a little more money on the conditions side. We would have to think carefully how to approach that. As the committee will appreciate, any three persons describing the condition of a building will give three different views as to its status.
Is there any possibility of co-operating with the local authorities who now have a great deal of spare capacity since their capital grants will be cut?
Mr. Frank Wyse
I have met several of the local authorities in recent times. We have not raised that, to be honest, but we meet them regularly and it is a matter which I may raise with some of the larger ones.
Do not take brevity as simplicity, but there is the VEC infrastructure and there is the local authority infrastructure with technical back-up. Surely outside-the-box thinking is required in these times of financial crisis.
Mr. Frank Wyse
I accept that. Because we have developed good relationships with many local authorities in terms of site acquisition and so on, I will raise it with them.
On the question of the documents meaning nothing, we will address that shortly in the context of information being placed on the Department's website in a clear and unambiguous way.
On the question of the PPPs, on average we find that the PPP process takes a period of four years. That is longer than the traditional method.
Is that four years from the time the Department presses the button to the time of going on site?
Mr. Frank Wyse
It is four years from the decision that the Department will undertake the project until there is a school ready for occupation. There are certain variations in the bundles but that would be the case in general. Mr. Jonathan Bliss will speak of that in a little more detail. Mr. Gavan O'Leary covered the issues on prefabrication. I will turn to Mr. Bliss on some of the technical issues raised.
Mr. Jonathan Bliss
I refer to the nine stages of the planning process. Since a couple of years ago the Department has had a new edition of our design team procedures and reduced the amount of stages from nine to five. However, I would hasten to add that is somewhat deceptive in that one of the stages is divided into two sub-stages. The reason for adopting this approach is to co-ordinate with the Department of Finance and other Departments on stage descriptions.
The entire process, and where these stages relate to the previous stage, is described in the design team procedures which are available on the Department of Education and Science website under planning and building units — technical guidance.
Mr. Wyse is correct in stating that the estimated time from PPP initiation to completion is four years. Obviously, it varies. We do not have a sufficient amount at a sufficiently advanced stage to make any definitive statement in this regard.
There are several factors that will obviously affect this. One is the availability of a clean site at the initial stages. The one finding at the earlier stages of this current bunch of PPP projects is that issues relating to title have a habit of delaying the process immensely.
The current economic downturn has also slowed the process somewhat. One does not want to send something to the market unless one is sure of an adequate response and it is a case of timing when to send something to the market. That is all I have to say on that matter.
I would have thought this was the best time to send something to the market — that they are crying out for it.
Mr. Jonathan Bliss
There are two factors in a PPP project: one is the costs of construction and the other is the availability of funding for 25 years. It is a balance between the one and the other. From the point of view of the costs of construction, now is definitively the best time to send something to the market. However, it is one component of a PPP project and both factors have to be considered in making that decision.
Mr. Frank Wyse
On the question of disconnection and streamlining, there is a technical aspect to the streamlining and we have tried to deal with that through the greatest degree of devolution, certainly in respect of projects for which a school itself is capable of catering. There has been a substantial sea shift in that regard in recent years. With the summer works scheme coming back on track, we would like to think that schools have greater autonomy in that.
The key issue is probably the presentation of information on a regular basis on the Department's website in easily understandable format, on which everyone is clear. The Department falls down due to the volume. There are 4,000 schools and a substantial number of them have some interest in the work of the planning and building unit, whether for a major project or something minor. We have a limited number of staff dealing with that matter. As a result, it is not possible to provide the type of service we would like to provide and which we should be providing. However, through the use of new technology, I am of the view that we will be able to improve the position to a substantial degree. We intend to do that.
Ms Kellaghan will deal with the statistics relating to the drawing up of the programme.
Ms Catherine Kellaghan
As Mr. Bliss stated, all the projects with which we deal must be managed on the basis of Department of Finance guidelines for appraisal. Our stage submissions match those guidelines. At each stage, every project is subject to reappraisal. There tends to be a misunderstanding on the part of schools and others in respect of the fact that the commencement of architectural planning or of a project does not necessarily imply automatic sanction for the project to be carried out to completion. Even though we are of the view that we emphasise this, the schools do not seem to understand that once a project commences, it is not just a case of proceeding to completion without any stops along the way. There are various factors that will come into the equation, such as relative priority and band rating, in accordance with the prioritisation criteria. There are also other factors that we take into account. These are probably of less importance. Availability of funding to allow projects to proceed is the most important factor.
A question was posed as to whether a league table could be put in place in order that schools might be able to see where they are positioned. That sounds like a good idea and if we could put such a table in place we would do so. However, the school building programme is relatively complex and it would be difficult to marry it to that sort of mechanism. There are approximately 140 projects at various stages of architectural planning at present. These projects have been given various band ratings and the circumstances relating to them differ. Those circumstances must be taken into account when we are deciding which projects should proceed and which might be held over for a little longer, particularly in the context of whether there will be an adequate number of places for children, whether additional temporary accommodation can be provided, etc.
While lower band-rated projects are passing through the system, other projects which might attract higher band ratings enter that system. It is the case that the latter can overtake projects which have been in the system for a longer period and to which a lower priority rating applies. I refer, for example, to circumstances where a project with a band 2 rating, which is ready to go to tender and which is at the top of the list, would be replaced in priority by another project with a band 1 rating that is working its way through the system. The system does not lend itself to being simplified to the point where a league table might be produced because it is, by its nature, quite complex.
How are the lists compiled? I refer here to the Minister's most recent announcement in this regard on 12 February. I presume the planning and building unit forwards to the Minister a list of the projects that are under consideration. What does he do next?
Mr. Frank Wyse
There is quite a complex process with which the planning and building unit engages and there are a number of factors which must be taken into account. For example, a project might be given a certain priority but it must reach a particular stage before it can be progressed to construction. There is no point in my informing a school that it will be included in the programme for construction for 2009 if we are aware that the project will not be able to proceed due to the fact that it has not reached a particular stage of architectural progression.
On occasion, a school may previously have been allowed to proceed to tender in respect of a particular project but, for various reasons, the construction stage was never reached. The reasons to which I refer could be quite valid and legitimate and could relate to the outcome of the tendering process being unfavourable, where there was only a single tender — as has happened in the past — for example. There are a number of factors which may prevent a project proceeding and the relevant school might then miss the boat. In the subsequent year, funding might not be available. We are of the view that projects relating to such schools have a right to be considered as a priority should funding become available. In some instances, these projects should possibly attract a higher priority than the band rating might even warrant.
We must also achieve a balance between projects relating to primary and post-primary schools. There will always be major pressure at primary level because that is where the initial flow of increase will come. However, we must also monitor the position on the post-primary side. In that context, a substantial number of schools in the post-primary sector are experiencing severe problems. From our point of view, the difficulty in that regard is that a project relating to a large post-primary school could cost anything up to €16 million, whereas a project relating to an eight-classroom school might only cost €4 million. I accept that the costs may have decreased somewhat in current circumstances.
Mr. Jonathan Bliss
In 2007, a 16-classroom generic repeat design project cost between €3.5 million to €4 million. We anticipate that in current market conditions, the cost should be just over €3 million. For an eight-classroom generic repeat design project, the cost in 2007 was approximately €2.4 million. We anticipate this reducing, in current market conditions, to something of the order of €2 million. It is patently clear that site conditions and other specific issues will affect those prices.
Another chief factor will be remuneration. That will be good for parents to hear.
Mr. Jonathan Bliss
I have no comment to make on that.
Mr. Frank Wyse
The other aspect which must be taken into account is that we cannot allow too many projects to enter the system and proceed towards construction at the same time. Even though we might be able to cover the actual costs in year 1 — for example, 2009 — we must continually bear in mind that there will be an overrun into the following year. Technically, we are allowed to make transfers from year to year. However, the amount involved is quite small and we must be extremely careful with regard to incurring contractual commitments into subsequent years.
At various stages, my colleagues and I would meet the Minister and inform him as to the way in which matters are progressing. Naturally, the Minister is under severe pressure at all times in respect of the level of progress, etc. We must inform him of the progression of the development of the——-
I wish to ask a question on this matter and I am seeking a reply in the context of the capacity-administrative response. Let us consider what would be the position if the Government decided, in the context of the economic crisis and the collapse of employment in the construction industry — for every construction worker who is made unemployed, the cost to the taxpayer in the context of the loss of direct receipts is €20,000 — to accelerate the schools building programme because new schools are needed and because the construction industry requires a fillip. I am deeply concerned in that regard because it does not appear that the Department's system lends itself to such acceleration. Is that a fair interpretation of what Mr. Wyse is saying?
Mr. Frank Wyse
We have accelerated——
Let us forget the construction side for a moment. If the Department was asked to increase its output as regards approval ratings, PPPs, contractual procedures, etc., could it double that output? What would be the administrative implications of such a move?
Mr. Frank Wyse
It would take time to ramp up a doubling of output in respect of any major capital programme. It is not simply a matter of proceeding with what the Americans term "shovel-ready projects". There are such projects but they are few in number. As the Deputy is aware, there are certain costs involved in progressing a project to the point where it is ready to proceed to construction. It is possible to ramp up capacity if one knows there will be fairly substantial increases over a period of two to three years. It has been demonstrated that we have done this in the past. I recall looking at the figures in 1997 showing the allocation for buildings was €120 million to €130 million and it is now well over €600 million. The allocation has been ramped up very considerably and the current level of activity would not be possible without this increase. However, it takes time to achieve this ramping up and things are not always ready to move on site, unfortunately, much as this is desirable and is one of our priorities.
The Department is bound and obliged to follow public procurement rules and this is a very tortuous and time-consuming process. Mr. Bliss may wish to speak about this matter. As late as yesterday the possible methodologies of increasing the throughput very rapidly, should that prove necessary, was raised at the GCC — which is the forum for discussion on all issues to do with construction in the State sector. However, this would require fairly severe adjustments to the procurement regime and on top of the existing national procurement regime the Department must also follow the EU procurement regime. To be fair, the EU has made some gestures in the direction of shortening some of the timescales involved in projects.
Mr. Jonathan Bliss
The European Union has indicated it is acceptable to use the accelerated procedures for projects, based on the fact that the whole of the EU is undergoing an economic downturn and requires projects to be brought to site more speedily. The difficulty from the point of view of the Department is while we are permitted to do this under European Union regulations, we can certainly reduce the time for asking for expressions of interest from contractors, down from what was 37 days to ten, but when it comes to inviting tenders, the contractors require a period of time to complete the bills of quantities and to return the tender. The effective reduction is not as large as we would otherwise have thought.
How many tenders would be involved and how many contractors would be in the pool?
Mr. Jonathan Bliss
In normal circumstances two years ago we would have been operating on the basis of six or seven contractors. We have recently increased that number to eight for larger projects and ten for below threshold projects, thereby giving a wider pool of contractors. We have to balance the number of contractorsto ensure the contractors are not suffering expense with no hope of return.
With regard to the GCC and discussions on the acceleration of projects, this issue was raised yesterday and it was discussed. It was pointed out that from the point of view of ensuring employment in the State, it was vital that smaller scale projects, particularly such as schools and projects from a range of Departments, be brought to site as quickly as possible. No definitive decisions were made in regard to what might be the outcome other than to say that it was registered and is a topic of concern to all Departments.
Therefore, there will be clear progress but obviously not a doubling in the short term.
Mr. Frank Wyse
Not in the short term. Anything is possible and obviously there is a resource limitation internally and this must be taken into account. However, the Department has demonstrated that we are capable. It is possible, with time; because time is the crucial ingredient in all of this and it is the ingredient which can be the problem with many of the stimulus packages and programmes which have a construction element.It is not just a procurement matter although that is one element. As Deputy Quinn will be aware, to get a major project from the point of conception to being ready to go on site, in architectural terms, involves a job of work. It can be compressed and shortened and this is what the Department tries to do, for example, by using generic designs. However, it still requires work to be done to get a generically designed project onto a site.
The percentage increase in projects ready in 2009 as opposed to what was ready in 2006 would indicate that progress has already been made.
Mr. Frank Wyse
Yes. I am not sure if we have that level of figures but I can send that information to the committee if that would be acceptable.
I thank Mr. Wyse.
I welcome the work that has been done on the generic designs, both in the concept behind them and the quality of the designs. However, I hope my question is not naive. I refer to the tradition of the nine step stages which are now down to five, with the outline sketch scheme, developed sketch scheme, design and bill of quantities. Surely this becomes redundant with the generic design? Surely one does not have to check the sketch design because it is there already? Is there not the possibility of two tracks?
If a brand new school is needed in a developing area or if a board of management decides this is the way it wants to go, if the Department presses the button and agrees in principle and opts for a generic design and that the school will go to the planning process with no commitment to capital expenditure because that is too far down the road, but in terms of getting the design side completed, it does not have to sign off at the different stages because it has already done this. The bill of quantities above foundation level, in principle, should be constant. If the generic design route is taken, is there a way of fast-tracking the approval procedure up to the architectural stage and ready to go to tender with no commitment on the capital side because this can take two to three years in my experience, using the traditional method?
Mr. Jonathan Bliss
Yes. The use of the generic repeat design fast-tracks the design process. The generic repeat design or any other form of template reduces the time from project initiation to getting to planning permission stage. The only issue in regard to this is because each site is unique, the single factor that determines value for money for the project would be the site and site considerations which, generally speaking, account for about 25% of the capital value of the school project.
What about foundations?
Mr. Jonathan Bliss
With regard to foundations, car parking, road traffic management, site boundary treatment, ball courts, etc., we have encountered widely varying costs for the same level of works and we are constrained to ensure that there is not an excessive amount. We do not go through the process of stages one to three for a generic repeat design. I am using the old numeric system for the stages. We would have gone straight to stage three and asked for a design that included external works. The Deputy is quite correct that we would not be looking at the actual design as, by definition, it is acceptable and we would move straight on to planning. The major constraint in this regard is, and always has been, the availability of funding to progress the project to the subsequent stage. The gestation and examination of designs is not a factor in terms of getting a project like that to site.
When Mr. Bliss referred to funding and in the case where the project is not on site, is he referring to architectural or professional fees?
Mr. Jonathan Bliss
No. We could progress a project up to pre-tender stage and complete our bills of quantities for the site-specific element. The Deputy is quite correct in saying there is a standard bill of quantity for the superstructure. At some point, whether at planning permission stage or at pre-tender stage, we would have to take a pause. The assessment to which Ms Kellaghan refers would ask whether it is value for money, is it still needed, and can we afford it within our capital envelope, including any commitments into the following year. Those are the questions we have to ask.
Has the Department contemplated using the strategic infrastructure legislation to fast-track the planning process?
Mr. Frank Wyse
Yes. The difficulty at the time was the number of other issues. We had quite a substantial engagement with the local authorities and with the Department of the Environment, Heritage and Local Government about the construction of schools. That Department issued specific guidelines to the local authorities on how schools should be dealt with in a fast-track way. By and large, we find that this system works reasonably well, particularly with larger local authorities. The guidelines were only issued in August by the Department of the Environment, Heritage and Local Government. We had a very large input and were quite happy with the product. It is something we are following. It is capable of shortening the period of time involved also.
Mr. Jonathan Bliss
By and large, the planning process is not on the critical path. There are other activities required to be done, including the completion of the site-specific elements, pre-qualification of contractors and completing the tender document package, albeit a portion is available off the shelf. If it is run concurrently — it would be done in such a scenario — it will not have a major effect on the delivery of the project.
Regarding the Department's engagement with local authorities, am I right in saying local authorities require the Department to do considerable work that would have fallen to be done by local authorities in the past, in terms of traffic calming measures, parking, etc?
That is opening a can of worms.
Absolutely. In my constituency it was proposed that the Department provide one mile of footpath to allow access to a particular school. To what extent is this causing a problem for the Department?
Mr. Jonathan Bliss
It looks like I am in the hot seat today. The answer is that we are aware of the problem. As Mr. Wyse said, depending on the local authority and school involved, it can be either a major problem or something with which we can live. I accept that local authorities have funding difficulties and are more anxious to ensure all parties applying for planning permission bear their share of the cost. We take a different view, which is that we are building a public utility and are constrained to ensure value for money for a school. If contribution charges, the cost of undertaking infrastructural work for the local authority or other similar elements increase to the extent that something no longer represents value for money, we have a problem. One of the items we have been considering and have discussed in some detail recently relates particularly to projects. Even though we know from a planning point of view that they are not scheduled to go to construction for a year or more, we envisage that within a five-year period they will actually progress from the pre-planning stage to the post-planning stage which thereby allows us to submit a planning application and, if necessary, an appeal without actually delaying the project from moving on site. While time is against us on this issue, we are separately considering seeking the assistance of planning specialists to ensure we get the best value for money and the best deal in regard to the conditions attached to planning permissions.
Mr. Frank Wyse
There is an element of judgment between whether we might be successful in appealing a condition and the delay that might be caused in advancing the project as a result of that process.
That reinforces my point about strategic infrastructure. The Department could jump through. What they are doing is dumping their costs on the Department. Is that not it in a nutshell?
Mr. Frank Wyse
They attempt to do this, but we resist. As Mr. Bliss said, even prior to that stage we engage directly with local authorities to try to determine what the conditions will be. In more recent times we have insisted that those who will be involved in planning also attend our meetings. It may be that a certain section of a local authority will agree a particular project and everything seems fine until we lodge the planning application and suddenly there is a different story. We are conscious that we need to get to the people concerned.
Ms Catherine Kellaghan
My experience from last year is that one element of fast-tracking is that we cannot deal with what we consider to be heavy planning conditions because we are subject to such time pressures. That works against us in fast-tracking projects and presents a difficulty for us. If we were trying to push projects faster than normal, we would not be able to take our time and consider appealing planning conditions, etc.
I would like to revisit this matter when we have had a chance to digest much of the material the Department has given us. Based on the three PPP bundles, the Department will generate capacity for an additional 12,200. However, that is viewed against a forecasted population increase of 77,000.
Mr. Frank Wyse
That is only for PPPs.
I know. I know predicting population increases is not an exact science but it is precise because the children born this evening will be presenting in five years' time for junior infant classes. Mr. Wyse has referred to the cohort moving into the 800 post-primary schools. I will pose a question that he might want to consider and come back to us. It is purely about administering capacity and has nothing to do with political orientation or comment. While it has certainly improved considerably in terms of capital resources, I get the sense that we do not have the administrative procedures to match growing demand, discounting the growing demand in built-up areas for which the Department does not seem to have data, but that is a topic for another day.
Before Mr. Wyse responds, I would like to ask a parallel question. It might be that capacity from an administrative point of view will never be the crux of the issue as long as funding remains the major issue. Which of the two is the bigger constraint in terms of band 1 schools being completed within a reasonable period?
Mr. Frank Wyse
Clearly, funding has always been a major problem. We devised the system of devolution to schools in order to free up major projects and preplanning, not just architectural planning but also the identification of need. I wish to correct something for Deputy Quinn. We also have the capacity in developed areas to know what the situation is. The GIS assists in identifying, for example, surpluses of accommodation. I ask Mr. Dalton to expand on that point.
Mr. Tony Dalton
One of the benefits of the GIS brings us back to a point Deputy Quinn made about making the best use of the existing building stock. What we have found in examining small rural areas to rapidly developing areas is that we know there is spare capacity in the existing building stock but that it does not match where the demand is. Invariably, there is a large geographical gap in the locations where there is spare capacity and those where there is a deficit. It is a question of trying to merge the two. We have the same capacity to undertake a detailed analysis in any area in the country, be it a rapidly developing or settled area.
Mr. Frank Wyse
This point relates to what Mr. Dalton said and also the question raised by Deputy O'Mahony. Let me put the matter in a financial context. Projects in rapidly developing areas accounted for approximately 15% of the 2008 budget. The intention in 2009 is that the percentage will be 8%, not because of a reduction in building costs but because the numbers are smaller. Through the 2008 programme we managed to get slightly ahead of ourselves in that the great pressures in a substantial number of areas in the greater Dublin area eased somewhat. However, we are conscious that we need to keep moving. We have a schools programme for 2009 and will also have one for 2010 and 2011. However, it is a sub-component of the overall programme. We are acutely conscious, because of the reaction in rural and semi-rural areas, that there was a strong perception which was not entirely right that the Department was concentrating on rapidly developing areas to the detriment of schools which had been waiting for long periods in the system. There was a bulge of such schools in 2008 but we hope to be on a more even keel.
I must make another point on the position in rapidly developing areas that relates to Senator Ó Domhnaill's question. The increasing population is not just being catered for in schools in rapidly developing areas. It is also being catered for in semi-urban schools. On the basis of the definitions we use, such schools would not be strictly defined as "rapidly developing" but they are expanding nevertheless. I am sure Deputies are aware that there is a substantial number of such schools in all parts of the country, including rural areas. We will continue to try to cater for rapidly developing areas that require quick intervention and additional accommodation. We will put a breakdown of the schools in question on our website to demonstrate that we are catering for them.
Ms Catherine Kellaghan
It has been announced that sites have been acquired, or will be acquired, for 78 projects in existing schools in 2009. Approximately two thirds of the schools are in developing areas or will provide a significant number of additional places. Along with the rapidly developing areas programme, that is another aspect of how we are dealing with the increase in population.
Can Mr. Wyse comment on the cost of renting prefabs? It seems that a huge sum of money is being spent.
Mr. Frank Wyse
Rental costs have increased substantially over the last five or seven years. There has been a substantial increase in the number of teachers going into the school system and the number of special needs children being catered for. In most cases, accommodation had to be made available quickly when teachers were allocated to schools. In many cases, the only way of providing accommodation was to install prefabricated units, unfortunately. Our expenditure on prefabs in 2008 represented a decrease on the amount that had been anticipated. We adopted a deliberate policy of decreasing it. It will decrease further this year.
What about the actual cost? The cost of a unit is approximately €12,000. In the context of falling rents, is there not a case for looking for a better deal from the providers of prefabs?
Mr. Frank Wyse
That is what we are doing, in effect, through the process we have in place. Perhaps my colleague, Mr. O'Leary, will say something about the process we are adopting in the review.
Mr. Gavan O’Leary
Some schools are already tied into contracts. There is not necessarily any scope to seek a reduction in rent over the life of such contracts.
How long do such contracts last, typically?
Mr. Gavan O’Leary
It depends on the duration of the need that is anticipated. If the Department, in conjunction with the school, envisages that a school's need for a prefab will persist for longer than three years, it recommends that funds be made available to the school to purchase a prefab.
Are contracts designed by the Department or by schools?
Mr. Jonathan Bliss
I can answer that question. It is somewhat vague at the moment. We have put in place a review. We are developing more robust contracts. We anticipate that the review will be completed——
Who draws up the contract at present?
Mr. Jonathan Bliss
As things stand, the Department does not devise the contract.
Does it pay the bill?
Mr. Jonathan Bliss
Yes.
Is there a rent review at the end of each contract? If so, can rent go down as well as up to reflect market conditions?
Mr. Gavan O’Leary
I think it is rare for such rent reviews, in which rents can go up or down, to be included in contracts.
I heard a debate about this subject on the radio this morning. Apparently, such rent reviews are unusual in Ireland and in the UK, but quite common in the rest of Europe.
Mr. Frank Wyse
That is right.
I suggest that it should be considered in the present market conditions. I appreciate that the Department is tied into contracts, but the same can be said of every retailer in the country. Many commercial contracts are being broken because market conditions are dictating that rents have to be reduced if people are to stay in business. To what extent is the Department affected by this phenomenon?
Mr. Frank Wyse
We will adopt that approach, in effect, in respect of existing contracts. I wish to make it clear that the vast majority of contracts do not involve the Department of Education and Science. We provide grant aid to the schools. The schools are then responsible for agreeing contracts, in line with the principle of devolution of responsibility, just as they are responsible for agreeing contracts for the devolved summer works scheme, for example.
Each school has a board of management, typically comprising the local parish priest, the principal of the school and some of the parents of the children in the school. The parish priest would most likely say that when he found his vocation, he did not sign up to be a contract manager. Most principals would prefer to concentrate on teaching kids.
Like everything else in Irish life, contracts have become sophisticated and complicated. In the present climate, contracts in the commercial world are being renegotiated every day of the week, as Deputy Flynn has said. As prefabricated units are portable, if schools cannot afford them they should ask those who supply them to take them away. Schools should make it clear that they will not continue to pay for prefabs if there is a guy down the road who can provide them for half the price. Does Deputy Flynn agree that it is a buyer's market at the moment?
Absolutely. If the Department continues to pay, boards of management will not be under any pressure to try to renegotiate the terms. It is up to the Department to make it clear that it is not prepared to pay as much at a time when a 20% reduction is available in the commercial market. It should encourage schools to renegotiate. It is happening everywhere.
The reality is that when the bills come in, they are simply sent to the Department and are paid. They might be paid at a slower rate than the suppliers want, but they are sent on and paid.
The message from the committee is that a little more discretion should be applied, if that is possible.
Mr. Frank Wyse
Absolutely. We are intervening. Obviously, everything is not done across the board instantly. It takes time. An effort will be needed. People need to talk to each other about the arrangements. Contracts should be terminated if necessary. If a prefab is providing sufficiently good accommodation, the contract should be bought out. Perhaps an alternative programme can be drawn up. Under a scheme the Minister has introduced, schools can use the money provided for prefabs to provide accommodation more cheaply. Many schools are taking that option.
The Department of Education and Science has finally given me a list of the schools that are renting prefabs. I originally asked a question on the matter on 3 July 2008. Somebody in the relevant section of the Department burned the midnight oil to compile the list. Having scanned the list, it seems to me that between ten and 15 companies provide prefabs in commercial terms. Is it possible for the Department, which is calling the tune, to contact the companies in question to remind them that times have changed and to ask for price reductions?
Mr. Frank Wyse
Absolutely. We have embarked on that process, in effect.
How long will it take that process to conclude?
Mr. Jonathan Bliss
We estimate that there are 26 providers of prefabricated accommodation. A three-pronged process has already commenced. The first element of the process involves the development of standardised drawings, specifications and standards. While some of that is in place, it has not been completed. The second element of the process involves a review of existing accommodation to see where value for money can be achieved — terms and conditions may be changed and buy-out options may be considered. We are doing exactly what the members of the committee are saying. The third element of the process involves the development of a future methodology to ensure that speed and best value for money are achieved in the delivery of the prefabricated accommodation that will be required in the future. We are considering various frameworks for the companies in question and devising the contracts that will be applied.
Do all 26 providers charge the same rate, or is a cartel in operation?
Mr. Jonathan Bliss
No, they do not all charge the same rate. All contracts are tendered on an individual basis. The same operator does not necessarily charge the same rate for each prefab. Rates can vary on the basis of distances from manufacturing plants and site conditions, etc. We conduct an individual tender competition in respect of each prefab.
I would like to draw the meeting to a close. Many issues have been raised. I am sure we could micro-manage them in much greater detail. It will take time for members to digest what has been said. If the delegates did not have time to answer some of the questions they were asked, perhaps they could forward written responses to the committee. Members will be interested to receive such answers. If the delegates acquire further information about the process of reducing rent and tender costs, perhaps they will forward it to the committee at their earliest convenience. Members on all sides of both Houses have expressed strong interest in that process. Mr. Wyse stated the Department is responding and there is an onus on it to respond quickly. Members would also like to have a presentation in the audiovisual room in the near future. This would not be an official meeting and could be arranged in due course by the clerk to the committee and departmental officials.
Mr. Frank Wyse
We would be pleased to accommodate such a meeting. It would be a good exercise. It is unfortunate that this room does not have the necessary capacity.
The clerk has reminded me that members who were not present could be invited to attend if they have expressions of interest for specific areas. I thank Mr. Wyse, Ms Kellaghan, Mr. Dalton, Mr. Bliss and Mr. O'Leary for their informative and comprehensive presentation and honest and open responses to the questions raised.
The joint committee adjourned at 12.10 p.m. until 10 a.m. on Thursday, 12 March 2009.