As Minister of State at the Department of Public Expenditure and Reform with special responsibility for the Office of Public Works and flood relief, I am pleased to be here today to undertake a review of outputs and expenditure with respect to the OPW’s Vote for the current financial year and to summarise the OPW’s emerging position on next year’s Estimate requirements in advance of the allocations being finalised in budget 2017. To assist the joint committee, we have provided a brief explanation note setting out the spend areas on the OPW Vote, expenditure per subhead to 30 June last, output information for each spending area and the emerging estimate requirements for 2017.
In 2015, the Office of Public Works participated in an Oireachtas pilot scheme to review performance information. The chairman appeared before the Joint Committee on Finance, Public Expenditure and Reform and committed her office to reviewing and improving the ways in which performance information is presented.
As part of the 2016 Estimates, the OPW revised a number of its performance measures and removed a number of measures which the Oireachtas deemed unsuitable. As part of the 2017 Estimates process, my officials are currently considering a number of further changes to be published in the 2017 Revised Estimates volume. The OPW is focusing on revised indicators that will attempt to demonstrate the quality, quantity, timeliness and cost of outputs at a strategic level. It is important to acknowledge some indicators will represent events and milestones rather than final completions where programmes are to be delivered on a multi-annual basis. Ultimately, the development of sustainable performance targets to illustrate the efficiency and effectiveness of the organisation will need to be integrated within the current enterprise systems in the office and in the development of the new financial management system.
Before I deal with the two areas of the OPW Vote, I will comment on expenditure to date this year. Expenditure to the end of August 2016 was €211 million from a total allocation of €392 million. This expenditure represents 59% of the gross current allocation and 56% of the capital allocation to date, which is in line with the overall profiled expenditure. While there is some slight variance from profiled spend on an individual subhead basis, the two main programmes - flood risk management and estate portfolio management - are projecting to be on target by year end. However, in order to facilitate a number of property acquisitions in 2016, it will be necessary to reallocate certain funds or vire funding within the estate portfolio management programme. Capital expenditure on flood risk management is currently at €19 million but an increase in the rate of expenditure is profiled for the remainder of 2016 on a number of major schemes. In the event of any difficulties in achieving this level of expenditure, a deferred surrender or capital carryover facility will ensure the intended investment in flood risk management is still available in 2017.
My officials are currently engaging with the Department of Public Expenditure and Reform on funding requirements for next year to ensure sufficient resources are provided in order to deliver the core activities of the office. The level of service to be provided by the OPW in future years is expanding both in the delivery of the Government-approved flood risk management plan and in the management of the State property portfolio. I am committed to ensuring resources are available to deliver these significant programmes of work. This Government has demonstrated its support of flood relief by extending its commitment to provide €430 million to flood risk management within the 2016-2021 capital investment plan, increasing the allocation over that period from €45 million to €100 million per annum.
In the estate portfolio area, with rents rising and demands for suitable accommodation increasing, the OPW will continue to meet space requirements through office rationalisation and the greater use of open plan solutions. Additional space demands can, in some cases, only be delivered through new leases of modern offices and through the purchase or construction of alternative accommodation. The OPW is seeking funds in 2017 to enter into a number of new leases in Dublin, the cost of which, over time, will be offset by a number of lease surrenders.
A substantive body of works over the next five years is also commencing with the introduction of a property retrofit programme to allow for the refit of the existing portfolio of Government accommodation. This will maintain the building fabric and optimise the capacity of office accommodation within State-owned properties. The EU requirements to minimise carbon emissions and the carbon footprint for public buildings will present challenges for both the OPW and the occupying Departments in the coming years.
In delivering heritage services, the OPW continues to co-operate with Fáilte Ireland to realise the tourism potential within many of these historic visitor sites. Building on the success of the Wild Atlantic Way, the OPW has partnered with the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs and Fáilte Ireland in order to introduce and promote Ireland's Ancient East. This partnership aims to improve the visitor experience at a broad range of locations through investment in capital works projects over the period from 2016 to 2021.
In respect of flood risk management for 2016, the delivery of complex engineering projects continues to present many challenges through the planning stage, procurement process and the construction phase. I have requested my officials to examine the long lead-in times linked to these projects with a view to identifying methods of expediting their delivery. The key objective of this programme is to reduce the risk of river and coastal flooding to homes and businesses and to provide appropriate flood risk information for planning in Ireland. As part of that, the OPW is charged with consideration of climate change and ensuring that appropriate plans to mitigate flood risk are put in place. In terms of output measures, it is worth noting that the cumulative number of properties to benefit from major flood relief works to date is 7,000 with an additional 5,000 properties benefitting from local authority projects funded by the OPW. The cumulative value of this benefit to properties, or loss avoided in economic terms, is estimated at €1.2 billion.
As part of the capital works programme, I am pleased to report that contracts are now placed at Bandon and Skibbereen and construction is now proceeding. A total of ten major capital flood defence schemes are currently under construction, another is due to commence this year and a further 21 schemes are at planning and design stage. These projects will provide protection to a further 4,500 properties at risk of flooding. In tandem with this, €3 million has been approved by the OPW under the minor works scheme in 2016 for 58 additional localised flood relief projects to be undertaken directly by the local authorities.
The OPW continues to maintain all arterial drainage schemes completed under the Arterial Drainage Act 1945. This investment provides ongoing protection to 650,000 acres of agricultural land, infrastructure and properties through the maintenance of 11,500 km of river channel including 800 km of embankments at an annual cost of €15 million. Separately, local authorities maintain 4,600 km of river channel providing further localised flood protection.
The OPW's catchment flood risk assessment and management, CFRAM, programme is the largest flood risk management planning programme ever undertaken. It has completed detailed surveys and models across 300 at-risk areas involving 6,700 km of watercourse and 9,400 km2 of flood plain. The output from the ongoing CFRAM programme is a comprehensive suite of maps for 300 communities around the country covering 90 coastal areas and in the region of 7,000 km of river. Members will be aware that local communities are currently being consulted in respect of these maps. Once the public consultation is complete and all information considered, the final plans will be submitted for approval to the Minister of Public Expenditure and Reform and may then be adopted by the local authorities.
The interdepartmental flood policy co-ordination group is developing a range of policy initiatives to underpin the overall investment in managing national flood risk. It is also considering a number of other prevention and mitigation measures for providing flood relief which may include schemes for individual property protection and voluntary home and farmyard relocation.
I understand that the members of this committee are particularly interested in ensuring that home owners and business owners can insure their properties against flood damage. As members are aware, there are a range of cross-departmental considerations in this area including the Minister of Finance who has responsibility for the development of the legal framework governing financial regulation. A memorandum of understanding now exists between Insurance Ireland and the OPW with the common objective of ensuring that appropriate information on completed OPW flood defence schemes is provided to insurers. I have asked the committee to expand the memorandum to incorporate the role of the Department to facilitate, to the greatest extent possible, the availability to the public of insurance against the risk of flooding. I am pleased to report that I have reached an agreement with the industry for quarterly meetings of the working group to make progress on any issues that may arise.
The other main programme of investment for my office is estate portfolio management which encompasses the management, maintenance and development of the State's property portfolio. In recent years, with a move towards better space management, the Office of Public Works has rationalised the State's office accommodation, surrendering more than 300 leases, with cumulative savings of over €130 million being generated in recent years. The OPW now also provides a shared service for the maintenance of accommodation occupied by Departments and manages construction projects on their behalf.
In the heritage area I am pleased to report that the total number of recorded visitors to OPW sites to the end of August was over 3 million, pointing to a record number of visitors in 2016. This is a key driver of the economic benefit being generated for the tourism sector. The OPW’s heritage service has had considerable success in identifying additional sources of sustainable income through investment measures undertaken in recent years. For the first time heritage receipts will exceed €10 million in 2016, an increase of 42% on the €6.9 million received in 2012 when investment to increase visitor numbers was initiated.
Guided visitor services will continue to be provided by the OPW at 70 sites nationwide, on either a seasonal or a full-time basis. They include nationally and internationally known attractions such as Newgrange, Clonmacnoise, Glendalough and Kilmainham Gaol where recent investment has received many plaudits. Many of the OPW's heritage sites have been utilised extensively as part of this year’s commemorations and I acknowledge the work undertaken by staff of OPW in this area.
I realise I have referenced only a small part of the work of the OPW which has a vast array of responsibilities, but if committee members have questions about its funding or outputs, I will be happy to accept and discuss them.
