The intention is that this group of organisations will receive initial priority attention in terms of staff transfers and property procurement while still ensuring progress for all the remaining organisations. The headquarters of the Departments of Social and Family Affairs, Arts, Sport and Tourism, Defence, Education and Science, Environment, Heritage and Local Government, Community, Rural and Gaeltacht Affairs, Agriculture and Food, together with the Office of Public Works, are included in this initial phase. Approximately 3,500 Civil Service posts are earmarked to move in this first element in the decentralisation programme. A wide range of Departments and offices are included. Some locations will have more than one Department relocate there. For example, Drogheda is included twice as both the Departments of Communications, Marine and Natural Resources and Social and Family Affairs have been approved for the first phase, while some Departments and offices have a number of locations included in the list. For example, the Revenue Commissioners will transfer to Kilrush, Listowel and Newcastle West.
In selecting these Departments and offices, I understand that the group paid particular attention to the figures which emerged from the CAF following the cut-off date for receipt of priority applications on 7 September 2004. It reviewed the overall number of people interested in moving to these locations and the extent to which the jobs available in particular grades at each location are matched by the applications for these grades, particularly in the case of the senior grades. The selection also had regard to other factors. Locations where the purchase of a site is well advanced or can be advanced quickly, and-or where it seems that a building can be procured quickly, were reviewed and the business-related issues that arose in the relevant individual implementation plans were considered.
Both the group and the Government are conscious of the challenges that need to be addressed as the implementation process moves forward. These include issues relating to the transfer of departmental headquarters, continued provision of customer services, effective cross-organisation collaboration and the particular challenges to be faced in dealing with professional and technical staff. The best way to overcome these challenges is to select a mix of organisations which is sufficiently representative in terms of the issues that need to be tackled and to have an appropriate geographical distribution.
At this point I would like to deal with the point raised by some commentators that, with the publication and Government approval of the first phase locations, the remaining locations and organisations have been sidelined or abandoned. Again I would like to stress that this is not the case. In its report, the implementation group points out that it will report again in spring 2005. On that occasion, the group will deal with the organisations and locations not covered in its report of 24 November 2004. To date, the implementation group has demonstrated an excellent track record in delivering reports on time and I have no doubt this trend will continue.
The Public Appointments Service, formerly the Civil Service Commission, which operates the CAF, has recently notified personnel officers of the names of those in their organisations who wish to decentralise with them. This allows personnel officers to start planning and making appropriate internal reassignments to facilitate the relocation process. Management across the public service will also receive details of those members of their staff who wish to leave the organisation to move to another location under the terms of the programme. Again this information will facilitate medium-term planning in all of the Civil Service and public service organisations involved.
The next step in the process involves immediate planning for interdepartmental transfers following appropriate consultation with public service management and unions. The organisations listed in the first phase need to receive priority in managing and making the necessary interdepartmental transfers, although these will inevitably affect all Departments to some degree. I have concentrated thus far on the issues relating to those who wish to relocate. Both I and my colleagues are aware that this group represents only part of the picture. There is another group of public servants who for various reasons wish to continue working in Dublin. From the outset, the Government has stressed the voluntary nature of this programme and the fact that the staff who do not wish to relocate will be offered an alternative public service post in Dublin. We will continue to be conscious of the needs of this group as we move on with the implementation of the programme.
The arrangements for managing interdepartmental transfers will also address the position of those staff who want to remain in Dublin but who will be required to transfer to other organisations because there will no longer be posts available for them in their existing organisation. The selection of those to transfer will initially be done on the basis of volunteers. If there are insufficient volunteers, the "last in, first out" principle will apply. The aim will be to ensure that, in so far as is possible, only one move between Departments will take place. Vacancies will arise in Dublin posts as individuals wishing to decentralise move to new organisations. The arrangements will aim to allow those moving to another Department in Dublin to indicate preferences on where they would wish to transfer, although it must be recognised that it will not always be possible to meet those wishes. As the implementation group suggests in its report, the approval by Government and release of the list of "first mover" organisations, and the issues arising in regard to managing these moves, should provide a structure for discussions between Civil Service management and unions about a range of issues relating to mobility, recruitment and promotion.
The OPW has provided a schedule of indicative timescales for all the locations listed in the report. It has listed the indicative construction start and completion dates for each location. Allowing for completion of the procurement and planning processes, it can be seen that eight buildings would be completed in 2006, a further nine in 2007 and the remaining four in 2008. I should emphasise that the timelines provided by the OPW are indicative but also add that the indicative construction completion dates are the guide for not just the completion of the construction of a shell of a building, but of a completed, fitted out building ready for occupation.
All of the participating organisations prepared implementation plans earlier this year. Since then additional information has been made available by the CAF regarding staff numbers by my office regarding property issues. In addition, all organisations now know whether or not they are included in the first phase of moves. Based on this, the implementation group has quite reasonably asked that all organisations produce further more detailed versions of their plans. This will be an invaluable step in the planning process.
It has been acknowledged over the past number of months that the CAF figures for the State agencies are not as good as those for the Civil Service. A number of factors may have contributed to this, for example, there is an understanding and experience within the Civil Service of decentralisation and of interdepartmental transfer. This does not exist within the State agencies, where there is little tradition of interagency transfers.
The implementation group has suggested that the particular nature of the employment relationship to which I have referred can be addressed by the adoption of a more individualised approach to implementation in State agencies.
On this basis the group identifies seven agencies or locations, involving more than 700 jobs, which should receive initial priority attention. The seven include the transfer of FÁS to Birr, Bord Iascaigh Mhara to Clonakilty, Comhairle to Drogheda, Sustainable Energy Ireland to Dundalk, the National Safety Council to Loughrea, the National Council for Curriculum and Assessment to Portarlington, and the Health and Safety Authority to Thomastown in County Kilkenny.
The second report dealt with the financial implications of the office accommodation aspects of the programme and the procurement methodology. The key findings are as follows: In the years 2006-10 there is an increasingly negative cumulative cashflow as the site acquisition, construction and lease exit costs exceed the proceeds from the disposal of surplus owned property in Dublin and the rental savings; thereafter, the rental savings act to reduce, and eventually eliminate, the negative cumulative cashflow to the State; from 2026 onwards the cumulative discounted cashflow becomes positive; and at the end of that period, the State owns all the buildings in the decentralised locations and the annual rental savings would continue to accrue. The capital costs of procuring office accommodation in the decentralised locations will be dealt with when the Minister for Finance announces the revised multi-annual capital investment envelopes on budget day.
The Office of Public Works has been given primary responsibility for delivering the property aspects of the decentralisation programme and I confirm that considerable progress has been made in this regard. The tasks facing OPW include the following: the sourcing of property solutions at the various locations concerned which mainly involves the acquisition of development sites; the procurement of accommodation solutions to the office and facility requirements of the Departments and agencies involved; the rationalisation and consolidation of the use of Dublin office space, both owned and leased, following decentralisation; and the management of the disposal of surplus Dublin office accommodation.
In late December 2003, the OPW placed advertisements in the national press seeking expressions of interest from those willing to provide suitable good quality modern offices, either existing or under construction, and suitable sites with planning permission or appropriate planning zoning which would facilitate the construction of new office buildings.
Following the requests for property proposals, the Office of Public Works received in excess of 700 proposed property solutions regarding the decentralisation programme scheduled for the various locations around the country. Detailed evaluation of these proposals has been undertaken and, as already stated, the Office of Public Works has made significant progress in sourcing possible sites at the locations concerned.
The evaluation process involves the following three-strand approach: An architectural assessment by OPW architects; a valuation process undertaken by both OPW and private sector valuers; and an assessment by reference to the business needs and staff requirements of each decentralising Department or agencies.
To date, nine property solutions have been agreed in principle and a further 20 plus are at an advanced stage in the acquisition process. I also confirm that the balance of the sites for the remaining locations in the programme are being proactively pursued by the OPW. The locations where solutions have been identified are Carlow, Longford, Newcastle West, Athlone, the Curragh, Sligo, Dundalk, Furbo and Donegal. Regarding Carlow, Longford and Newcastle West, the Chief State Solicitor is currently processing contract documents in respect of sites, and it is expected that the associated acquisition phase will be completed as quickly as possible.
State-owned land will accommodate the decentralised buildings scheduled for Athlone, the Curragh, and Sligo, while the proposed location of the Dundalk building will be on land at the Dundalk Institute of Technology. It is proposed to locate the staff relocating to Furbo in an extension to an existing building.
A broad range of factors will influence the cost of acquiring sites, including, proximity of the site to commercial, leisure and educational facilities; proximity to public transport; access to and from a good quality road network; zoning for development; and the prevailing property market conditions in each geographical area.
Regarding the programme procurement methodology the group suggested, in its report dated 31 March 2004, the adoption of a public private partnership approach in procuring office accommodation in the decentralised locations, with a preference for a design, build, maintain and finance approach.
In this regard the OPW has since been advised by the National Development Finance Agency that potential PPP projects need to exceed a certain minimum value in order to generate an economically viable proposition for private sector investment. Relatively few single construction projects within the decentralisation programme would exceed this minimum value. The group has considered the scope for bundling several projects together and offering them en bloc to the market. However, the OPW advice is that this approach would give rise to serious practical difficulties in managing the projects and should not be adopted. Ultimately, the suitability of the DBMF approach will have to be determined by testing the market for a number of the larger projects.
In the case of smaller projects and in light of the advice received, the OPW now recommends that a design and build approach be pursued in most cases. This approach should help to advance projects to tender stage at a faster pace because the contract documentation would not be as complex as for DBMF. At the same time, it would allow the OPW to test whether the use of warranty provisions for particular components of the building provides a possible alternative to a comprehensive maintenance contract.
There may be other locations where the DB tender approach would not be suitable, for example, where an existing building is being acquired, where the OPW can enter into a satisfactory agreement with a developer or where the project is so small that it would not attract sufficient private sector interest. In such cases, a fit-out or traditional procurement will be required.
In general, a twin-track approach of DBMF and DB will be adopted for the procurement of office accommodation. For those locations, which involve accommodation for at least 300 staff, it is intended that the DBMF approach will continue to be pursued subject to it demonstrating value for money relative to the public service benchmark in each case. In line with the implementation group's recommendation, the OPW has developed, with the assistance of the NDFA, a generic public service benchmark. This is a comprehensive risk-adjusted costing of the project, over its whole life, using conventional procurement. It provides a comparator against which to measure the value for money of the public private partnership. For the remaining locations, a design and build approach will be adopted.
This parallel approach should give the market an opportunity to demonstrate that it can provide the required office accommodation on a value for money basis but, at the same time, provide assurance about early progress on implementation of the programme; and allow each approach to be compared with, and evaluated relative to, the other. This overall strategy will be reviewed in light of experience with the market during the first phase of implementation of the programme.
Regarding property disposal, a desire to hold on to large amounts of owned property in Dublin for reasons other than its monetary value to the State would have a negative impact on the programme's financial framework. In addition, the estimated Dublin rental savings are sensitive to securing a match over a reasonable period between Departments occupying regional property and vacating Dublin property. The relocation of Dublin staff to the new offices will take place on a phased basis in most cases, even where there is a full complement of new staff ready to decentralise.
It is important that the overall property procurement and disposal process be managed in an integrated way. The OPW will be a decentralisation champion to ensure compliance by Departments with, among other things, the release of space to allow the OPW to take advantage of critical lease disposal dates; agreement as required to interim moves to other buildings in Dublin to ensure efficient property utilisation and to capitalise on market opportunities to sell buildings; and acceptance of building sharing as necessary to allow property disposals, both for staff decentralising and those staying in Dublin.
From a purely property management point of view with regard to the reduction of leased Dublin offices, the longer the OPW has to dispose of its leased space the lower the lease-exit costs would be.
These costs would also be reduced if, and to the extent that, the sequencing of moves could be driven by lease disposal and rationalisation opportunities. However, in reality, implementation of the programme cannot be driven entirely by property considerations as people and service delivery issues will also be taken fully into account.
The minimisation of lease exit costs will be actively managed by the OPW. It is also likely that greater value would be obtained if more owned property was sold and less forced disposal of leased property took place within a short timescale. This may require Departments the headquarters of which are not being decentralised to change accommodation. It should also be possible to sublet even relatively unattractive properties if they are offered to the market at sufficiently competitive prices.
It is clear that the delivery of the property element of the decentralisation programme amounts to a major challenge for the OPW and will require a concentrated effort from all areas of the OPW in the months and years ahead. I am confident this effort will be forthcoming and that progress to date, which has been significant, will be maintained. In conclusion, I am satisfied the decentralisation programme will be delivered.
