I congratulate you, Chairman, on your recent appointment as Chairman of this committee. I and the officials in the Office of Public Works had a very good working relationship with your predecessor, and we look forward to having the same relationship with you and other members of the committee when we appear before the committee. I wish you every success in the time ahead, Chairman.
I am pleased to be here today to present the primary aspects of the Office of Public Works spending plans under Vote 13 for 2013. The timing of my appearance today is significant in terms of the public service reform agenda and is of particular relevance in the Government's continuing effort to move to a new whole-of-year budgetary timetable. I understand that earlier today was the first time a Minister has appeared before this committee to discuss Estimates in advance of the detailed Estimates being formulated. I hope our engagement will provide an opportunity for this committee to make a more timely and effective contribution to resource allocation policy for all Departments and offices.
The critical point to make about the Office of Public Works, OPW, is that resources continue to be reduced. Gross funding on the OPW Vote has reduced from €635 million in 2008 to €324 million for 2013. The committee can see the extraordinary reduction in the Vote over a six year period, a relatively short time.
We have gone from 2,208 to 1,704 in terms of whole-time equivalents in the office so there has been in a diminution in the totality of the budget and in terms of the number of people working in the Office of Public Works.
To deal with this reality, the staff of this office have been actively engaged in the public sector reform process for some time now. The staff are endeavouring to successfully provide an enhanced level of services, not just the existing level, with less money and less people across a broader section of responsibilities. Indeed, it is important to also note that €324 million does not encompass the full range of services provided by the office as many are on an agency basis which are not reflected on the OPW Vote. Frequently the Office of Public Works provides a service for other Departments, which is part of our remit and we accept that, but it is not reflected in the totality of the budget because although we are doing work for the other Departments, they are effectively not paying for it; the OPW pays for it through its Vote. Years before people talked about the importance of a shared service, the OPW was providing such a service in Government, working across the entire sector. That is why it is not reflected in the Votes of other Departments.
Transformation of how services are provided is well under way in OPW and is key to the office achieving the high level objectives set out in the OPW statement of strategy. OPW funding will continue to be allocated through the Estimate process to the areas where the demand can be supported by clear performance indicators which demonstrate unambiguous delivery of objectives. The reforms are widespread throughout the organisation and are particularly transformational in the procurement and property areas. The senior responsible owners for managing the change in these areas are based within OPW and while they are well aware of the magnitude of the task ahead of them, they are meeting the challenges arising head on.
I will now deal with the specific technical adjustments amounting to €6.4 million for the OPW Vote highlighted to the committee members today. The OPW adjustment has assumed responsibility for the unallocated reduction of €3.7 million for the PER group set out in the comprehensive expenditure review. The main area OPW outlined for savings is rents paid on behalf of Government Departments. This expenditure has been reduced from a high of €131 million in 2009 to €112 million in 2012 and will see a further reduction of €3.7 million in 2013 achievable through an ambitious office rationalisation programme which saw the surrender of half a million square feet of office accommodation in recent years.
The savings made are not once-off figures, they are annual savings that, over time, will significantly reduce the annual State rental expenditure but, critically, are dependent on up-front capital investment for fit out or dilapidation costs which inevitably arise as part of the rationalisation programme. This level of progress will be difficult to maintain but I am fully committed to reducing State rents to below €100 million by 2015.
That is achievable, even after the extraordinary success of recent years. To do this, I will shortly bring proposals to Government that will further develop and change in how property is managed within the Civil Service. This will involve the greater use of open plan accommodation, more efficient use of office accommodation and greater energy conservation. These measures will yield further significant reductions in the cost of accommodation and will provide for the more efficient sharing of property assets across the public service.
The office is also in the process of disposing of assets that are surplus to requirements. This disposal programme will involve a number of approaches, such as transferring assets to other State bodies that have specific requirements, for example, community care facilities, disposal on the open market or use by communities, such as the recent provision of the former Finglas Garda station to a community crèche. As gardaí get out of Garda stations and we rationalise office space and introduce more shared services, there are big opportunities to sell of those buildings if there is a market for them or to tie them in with other Departments, such as primary health care and community facilities. We gave Finglas Garda station to a community child care facility. We must think outside the box and be radical in how we utilise public buildings. We have been given the opportunity because the public sector is shrinking and rationalisation and shared services are in place to provide that additional office accommodation for other uses.
On the other Vote adjustments, the office continues to remain well within the requirements set by Government under the employment control framework and will meet a funding reduction of over €1 million in 2013. The remaining reductions outlined to the committee are for administrative savings this year and the 2012 requirements for the EU Presidency. While there will be further requirements for the EU Presidency in 2013, the Government has ring-fenced separate funding to meet these costs. In the event the OPW achieves administrative savings on the 2012 current allocation, an application will be made similar to the €588,000 carried into this year, to supplement the 2013 allocation.
On the capital side, an allocation of €333 million was made to OPW in 2008. The 2013 allocation is provisionally set by Government at €100 million in 2013. That is an extraordinary reduction in the amounts available for capital projects.
Contractual commitments in 2013 already in place amount to
66% of the €100 million, with flood risk management and unitary payments on the Dublin Convention Centre accounting for €65 million before we look at the 2,200 properties in OPW care. Priority projects on this portfolio of buildings with a gross value in excess of €60 million are underway or being advanced.
I hope it has been made clear to the committee that for the OPW to continue to carry out its core functions and objectives, the annual resources allocated to the office are the minimum required in 2013 but with that allocation, the staff of the office will continue to reform and reinvent how it provides its services so it can continue to provide more for less.
I thank the committee for its attention and I welcome any questions, particularly if any members have any views or alternative suggestions. We have set out where we see the reductions for next year. I invite the committee to submit any other suggestions they would like to bring to the table and we will be happy to consider them.
