The Minister is very welcome.
Adjournment Matter. - Acquisition of Carysfort College.
Acting Chairman
I welcome this opportunity to raise this matter on the Adjournment. Before commencing I would, first, like to congratulate the new Minister for Education on his appointment and to wish him every success in the no doubt difficult days ahead. I hope he will bring his own style and ability to that Department as we come towards the end of this century. His appointment is certainly deserved and I wish him good luck.
As Members are aware, last week the Report of the Comptroller and Auditor General was published. A quick perusal of the report brings to light the fact that from time to time decisions are made in relation to how moneys are expended, how projects are thought out and moneys are targeted in a haphazard and sometimes in a negligent way in the spending of taxpayers' money. This is very much the case in respect of the purchase of Carysfort College 12 months ago.
We are all aware of the position regarding Carysfort, its tremendous history as a training college and, how due to changes in education, the decisions made some years ago to close it. This training college is in my constituency and many of us were upset when this decision was made but we hoped, at least, that the many facilities built up over many years by the Sisters of Mercy would be maintained and used in the future for the benefit of education. We were glad it was eventually purchased by UCD, but there are unanswered questions and points which need clarification.
I would be the first to admit that, since the Minister is in this Department only a matter of days, some of the events were not agreed to by him and he possibly will have to unravel the mess or clarify the situation. I hope that, to make a good start to his new portfolio, he will be able to satisfy the taxpayers that they are not being ripped off. As the time approaches when we will be discussing the Estimates, we are being told by every Minister and forecaster that since there is not enough money to fund various projects, no extra spending can take place. We are continually being told of the difficulties involved in relation to the Estimates and finding the moneys required.
When the decisions relating to Carysfort were made, it was said they did not make commercial sense, or that if these people were spending their own money instead of the taxpayers money, they would not have made the same decisions. There is a clear duty on the Minister to clarify the matters raised in the Report of the Comptroller and Auditor General. We are all aware that in August 1989 the Valuation Office were asked to value the property. It is obviously difficult putting a value on something. At that time we were given the example of an auction where, if two people badly wanted a house, the market price could be beyond a realistic target. However, the Valuation Office put a value of roughly £3.8 million on Carysfort — some time earlier it had been offered to the Department for £8.5 million. No decision was taken to purchase the property at that time. One could say common sense prevailed and that not paying £8 million for a £4 million property was the correct decision to take. Then, one year later proposals were made to the Minister for Education that the property be purchased as a graduate business school, a noble thought. At that stage a decision was made to purchase and £9.7 million was provided in a Supplementary Estimate passed by Dáil Éireann almost 12 months ago. One must ask, what were the grounds for making that decision? What thought went into it? What commercial, management and business heads decided this? There must be a file showing that 12 months earlier there was a value of under £4 million on the property.
The Minister knows that local authorities around the country are trying to cut estimates and await a decision from the Department of the Environment on the rates support grant but last year there was no problem about money there was plenty of it.
We must ask, what was the basic thinking behind this. Was pressure exerted? Was pressure put on the Minister's predecessor or did she adopt the attitude, what is another few million? It is important that the Minister clarify this for this House and the public who hear of cutbacks across the board, in the Departments of the Environment, Health and Social Welfare. People are being investigated to see if they are a few pounds above or below the qualifying level of a means test.
There is a duty on the Minister to clarify this. I am willing to accept that what happened 12 months ago was not of his making but he should make a good start to his term of office. The public have a right to know what happened, and the basis for those decisions.
The last paragraph of the report of the Comptroller and Auditor General states:
I have asked the Accounting Officer whether in approving and providing funds for the acquisition of the property by University College, Dublin the Department of Education sought to reconcile the valuation officer's current open market value of the property in August 1989 in the region of £3.8 million with the price at which it was agreed that University College, Dublin should acquire the property in November 1990, £8 million.
The Comptroller and Auditor General has asked why, when it appeared there was no great anxiety to provide £8 million in 1989 to purchase the property 12 months later money could be found. The attitude was, there is no problem, name the price there is plenty of the taxpayer's money to pay for it.
It is important that the Minister tells us what happened, what thought went into the decision, what discussions were held, what reports were issued on the previous year's valuation and why it was not purchased then. If £8 million was the asking price the Department may have got it for less. Was it just a case of, there is the cheque we will not start haggling over the price.
It is clear that the Higher Education Authority are partly responsible for the debacle which took place. We should not allow this situation to continue to hang over us much longer. Other matters are the subject of inquiries or investigations and we should wait to hear the results of those investigations and not have trials within trials.
The Minister can clear up the picture and he can give this House the answers it requires. The Minister, should tell the people of this country exactly what happened and eliminate all doubts.
We know there will be reductions in Estimates in the weeks and months ahead and Ministers will tell us, probably on a daily basis, that there is no money for this or that. There is no doubt that the Minister's colleague, the Minister for Finance will ask him to cut his Estimate. I hope the Minister will say, "in our Department we do not squander money and we get the best value for money". It will not be acceptable if the Minister says there is no money for this or that because £4 million would do work in many schools which need extensions or repairs. What will the Department say to the Comptroller and Auditor General about the gap in the valuation between 1989 and 12 months later.
I am glad the Minister has listened to the debate. I wish him every success. I hope he will start on a positive note. It is important that decisions are made on this. Many questions have been asked and it is up to the Minister to clarify the position.
I want to take the opportunity to welcome the Minister to the House on his first visit as Minister for Education. I assure him he will have full co-operation. We hope to see him many times with education legislation over the coming months. We think he will be a good Minister. We extend every good wish to him.
I would like to thank Senator Cosgrave for his kind remarks and, indeed, Senator Manning, Leader of the Opposition, for coming in to offer me his good wishes.
I welcome the opportunity to clarify the position in relation to the purchase of Carysfort having regard to the comments made in the Comptroller and Auditor General's report. In relation to the valuation of £3.8 million received from the Valuation Office in August 1989 my Department's understanding was that the Valuation Office determined the valuation from a commercial viewpoint, that is market value, not on the basis of its value for appropriate use as an educational institution and that the valuation for the property was equivalent to its land value.
My Department have clarified that in arriving at what was a low valuation the valuers took account of restrictive conditions which applied at that time to the sale of the property. For example, the Sisters of Mercy would be occupying part of the building for two years, which would limit development in that period and despite this, the purchaser would have to undertake maintenance and security immediately. The valuation was somewhat lower than the value which would have been arrived at if calculated simply on the basis of a cost per acre for the site area. The valuation would clearly have been much higher if the restrictive conditions had not been a factor, which was the position when the property was acquired by UCD.
I would remind the House that there was unanimity on all sides on the need to retain Carysfort for educational purposes. The previous Minister was under ongoing pressure from all sides of the Dáil as well from outside to enter into negotiations to purchase the property. I emphasise that, ultimately, the price of acquiring the property would be determined on the basis of the negotiations rather than on the valuation arrived at separate from such negotiations when, of necessity, any valuation would have a subjective element. In this regard, an alternative valuation provided for the Mercy Order by a reputable firm of valuers fully supported their offer for sale to my Department of the buildings and 15 acres for £8.5 million. In the circumstances, the valuation of £3.8 million provided by the Valuation Office would have served as a basis for an opening offer should it have proved possible to enter into meaningful negotiations for its purchase at that time. This was not possible then as the price was stated to be not negotiable and the time allowed for consideration of the offer was unrealistic.
Solicitors for the vendors subsequently stated, on 2 October 1989, that they were then open to an offer, but one which they confirmed would have to be firm and realistic in the context of the vendors asking price of £8.5 million for the buildings and 15 acres or £10 million for the buildings and 20 acres, and be received before 5 October 1989, that is, within three days. This option could not be taken up because of the time scale and because an appropriate use had not been found for the property. A greatly reduced offer of £8.25 million for the buildings and 20 acres received in February 1990 was similarly not taken up on the grounds that an appropriate educational use for the building still had not been determined. I want to stress that at no time was an offer made to the Minister or my Department to purchase the property for less than the eventual purchase price of £8 million negotiated by UCD.
Suggestions were made that my Department should purchase Carysfort on the basis of negotiation. This suggestion was not feasible since my Department do not operate third level colleges. A further consideration was that unless a definite use for the premises had been established before its acquisition, substantial maintenance costs would have arisen. The suitability of the premises for use as a regional technical college was considered. A detailed study carried out by technical officers of my Department made it clear that it was not suitable for this purpose. Its use for a business graduate school was not in question at that time in view of the plans to develop it at Roebuck.
As the President of UCD noted in his recent statement, the situation changed in 1990 when financial problems arose regarding the development of the business school on the Roebuck site. The possibility thus presented itself for the first time that the Government's policy on expanding third level places and UCD's development plans for its business school could coincide. The proposal by UCD to develop their graduate business school at Carysfort presented an ideal use for the property. The range of facilities available in Carysfort — residential accommodation, language laboratories, lecture theatres, sports facilities, etc. — makes it ideally suited as a major management school.
I would remind the House that the question of making the facilities at Carysfort available to UCD was in question since 1987 when a committee chaired by the then chairman of the Higher Education Authority recommended accordingly.
The college has the authority under its charter to buy and sell land. The State has never had any reason to believe but that the authorities of all the universities have acted with the utmost integrity and professionalism in these matters.
I have been assured by the UCD authorities that it was only after intensive negotiations, using all necessary technical and commercial expertise available to them, that the final price of £8 million was agreed. The UCD authorities are happy that the acquisition has provided them with the finest campus in Europe for its purpose and that it represents excellent value for money. I fully concur with this view which is fully supported by expert technical evaluation carried out by the staff of my Department.
I have to stress again the point made by the then Minister for Education to the Dáil on 18 October 1991. The £8 million purchase price, negotiated eventually by UCD, does not accurately reflect the value of securing this fine facility for public education. When account is taken of the £2 million available from UCD, and the £1.75 million recovered by the State from the Mercy Order for earlier capital investment, the actual cost to the State was £4.25 million. The additional moneys made available to UCD for legal fees, adaptation, equipment and maintenance would have been required no matter for what educational purpose the State acquired the premises.
All proper procedures were followed in relation to the purchase of Carysfort. The payment of a grant to a university for the acquisition of a property through the Higher Education Authority, is determined on the basis of the property being required for the educational purposes of the university and that due process of negotiations were followed. These conditions were met in the case of Carysfort.
I am fully satisfied that the negotiating team acted professionally and responsibly in concluding negotiations and arriving at a price. To suggest otherwise would be to impugn the integrity of the high calibre people involved. Authority from the Department of Finance and Government were secured, Dáil approval was given for the necessary Supplementary Estimate and payment was made in the normal way through the Higher Education Authority.
The acquisition of Carysfort is a major addition to the third level education sector providing an ideal facility for a major business school and freeing up not less than 600 undergraduate places in Belfield, in line with Government policy to expand the avalability of third level places.
The Seanad adjourned at 4.10 p.m. until 2.30 p.m. on Wednesday, 27 November 1991.