I welcome the Minister to the House.
Dormant Accounts (Amendment) Bill 2011: Second Stage
Question proposed: "That the Bill be now read a Second Time."
I welcome the opportunity to introduce this Bill to the House. It proposes to amend existing dormant accounts legislation in order to dissolve the Dormant Accounts Board and transfer the statutory functions of the board to the Minister for the Environment, Community and Local Government.
The report of the special group on public service numbers and expenditure programmes, better known as the McCarthy report, recommended the discontinuation of the Dormant Accounts Board, which has statutory functions relating to disbursements from the Dormant Accounts Fund. The report stated that this would result in an annual saving to the Exchequer of €1.7 million. It should be noted that the vast majority of the administrative budget for dormant accounts is paid annually to Pobal, which administer the dormant accounts measures of this Department and certain other Departments. Expenditure under the fund is spread across ten Departments and agencies.
The rationale behind the group's recommendation was as follows:
Given that the level of funds transferred into the fund has declined in recent years, the Group concludes that the Dormant Accounts Board should be discontinued. Remaining projects funded by the Board should be processed to their conclusion.
As the levels of new measures or programmes for disbursement from the fund are likely to remain very low for so long as the current budgetary constraints prevail, the justification for having a body in situ is limited, particularly one that has little involvement in the approval process.
Currently, legislation provides for a scheme to transfer dormant accounts in banks, building societies and An Post, as well as unclaimed life assurance policies, to the care of the State, while guaranteeing a right of reclaim to those funds. The main purpose of the legislation is to reunite account holders or policyholders with their funds in credit institutions and insurance undertakings and in this regard, such institutions and undertakings are required to take steps to identify and contact the owners of dormant accounts and unclaimed life assurance policies. The legislation further provides for a scheme of disbursement, for charitable purposes, or purposes of societal and community benefit, of funds that are not likely to be reclaimed. The fund consists of a reserve account from which reclaims and various expenses are paid and an investment and disbursement account from which investments and disbursements are made.
Under this Bill, the objectives underpinning disbursements from the Dormant Accounts Fund will remain unchanged, that is, disbursement will assist persons who are economically or socially disadvantaged, educationally disadvantaged or who have a disability. Future disbursements must have regard to those three areas, the priorities and policies of Government, the availability of moneys, the cost-effectiveness of the expenditure and the outcome of any previous reviews of disbursements plans.
Transparency in decision-making on disbursements from the fund is critically important. The fairness of any grant scheme and decisions made for funding under it are likely to be subject to scrutiny. Given the special nature of dormant accounts funds, which are private citizens' money and not Exchequer funding, there will be a reasonable public expectation that the disbursement process should be clearly fair and equitable. This is the reason the Government will make considerable efforts in the legislation to ensure this is the case, particularly by providing for Oireachtas or public scrutiny of the process, as well as ongoing reviews, which will be available to the public.
Everyone in the House welcomes the use of such unclaimed moneys for the betterment of the less well-off in our society. Such good work for the public good must continue, which is exactly the intention of the Bill. More could be done. However, if one is serious about tackling severe disadvantage, the State must use all resources available to it for this purpose in a particularly focused and sustained way. It is doubtful whether current arrangements can secure optimal impact in this regard. A more sensible approach, which underpins the Bill, is to draw on the expertise, knowledge and resources of existing public bodies. One must be careful about using taxpayers' money correctly and there is no point in setting up another body to work through these issues if knowledge and expertise already resides within existing public bodies. The objective is to avoid unnecessary bureaucracy and to enable informed, objective decision-making consistent with public policy priorities and available resources.
In practice, this means that each year, following broad approval of programmes and types of projects for funding, applications will be publicly invited for eligible programmes or projects. Following evaluation of such applications by or on behalf of public bodies, I will, with the consent of the Minister for Public Expenditure and Reform, approve a range of specific measures and projects. A statement containing details of the approvals will be laid before the Oireachtas and a list setting out the approved measures and projects and specifying the amounts to be disbursed, will be published within one month. These arrangements demonstrate the Government's commitment to streamlined, transparent and effective administrative arrangements and they are grounded in reality. These rigorous and extensive measures confirm the Government's absolute commitment to ensure that decisions on the fund are informed by Government policy and the public interest, as well as being accessible to public application and fully subject to public scrutiny.
The Bill maintains the requirement for separate recording of dormant accounts spending through the Votes of Departments. This means, for example, that where Dormant Accounts Fund expenditure for a project for a community group is approved, the relevant funding will be channelled through the Department dealing with that sectoral group. In this way, dormant accounts spending can be tracked across Departments with enhanced transparency and accountability. Under Government accounting procedures, disbursements on dormant accounts measures are paid in the first instance up-front from the Department's Vote in the same way as with any other spending programme. The difference with dormant accounts expenditure compared with other funding programmes is that once expenditure takes place, either on administration of the measure or by the project itself, it is reimbursed to the Exchequer from the Dormant Accounts Fund in accordance with the Dormant Accounts Acts, in the form of appropriations-in-aid payable through the relevant Department's Vote. In this way, the costs associated with dormant accounts measures are Exchequer-neutral, although it should be noted that Departments cannot spend appropriations-in-aid directly themselves once they are reimbursed from the fund. They are instead refunded to the central Exchequer. Moneys disbursed from the fund increase Government debt levels as the money continues to belong to the account holder, who can reclaim it at any time, and not at any stage to the State. Consequently, every euro spent from the fund is regarded in accounting terms as a potential Government liability. Therefore, the Dormant Accounts Fund cannot be regarded as free money, as it were.
I wish to convey to the Dormant Accounts Board the Government's appreciation for the work it has undertaken to date. Following its establishment in January 2006, the board developed disbursement plans that established the framework within which disbursements from the fund would be approved. Money from the fund was spent and continues to be spent on a wide range of projects and activities across diverse geographical areas, but with one essential common thread, namely, the alleviation of disadvantage. In accordance with the plans, priority funding is earmarked for RAPID areas, substance misuse, persons with a disability and educational disadvantage. The Government is fully committed to continuing to use the fund for these types of projects and work.
The more detailed technical provisions of the legislation are set out in the explanatory and financial memorandum accompanying the text of the Bill. While I have spoken about some of the key areas, I propose to outline the main provisions of the Bill. Sections 1 and 2 are standard provisions relating to definitions and so on. Section 2 specifically provides for the appointed day to be determined by order, which is the day the Act comes into force, the Dormant Accounts Board is dissolved and the functions of the board are transferred to the Minister.
Section 3 replaces Part 6 of the principal Act, as inserted by section 8 of the Act of 2005, and sets out the new disbursement arrangements. Sections 40A to 44A are subsets of section 3 of the Bill. Section 40A updates definitions to take account of changes provided for in the Bill. Section 41 sets out the purposes under which disbursements can be made. Section 42 provides for the making of a disbursements scheme no later than 12 months after the appointed day and will set out the types of programmes or projects for which moneys may be disbursed. The disbursements scheme or any subsequent amendment to it must be prepared by the Minister having consulted the Minister for Health, the Minister for Education and Skills and the Minister for Social Protection. The Minister may also consult other Ministers or persons. A scheme or an amendment to a scheme must be approved by the Government and must be laid before each House of the Oireachtas, and the Oireachtas will be allowed 21 days to challenge it.
Section 43 provides for the preparation of an action plan each year where the Minister has made a scheme. The process of making the action plan is very similar to that of the disbursements scheme in terms of consultation with other Ministers and so on. Once the plan is adopted, a copy is laid before each House of the Oireachtas, where it may be challenged within a 21-day period. The action plan must also be published. Provision is also made for adopting or not adopting an action plan and for not proceeding to invite applications under an action plan if appropriate in particular circumstances. Any decision not to proceed must be approved by the Government.
Sections 43A and 44 provide that a Minister, within whose remit lies responsibility for a programme or type of project specified in an action plan, is required to publish or cause to be published an invitation to apply for disbursements, which shall include the assessment criteria, the application procedure, the deadline and any other information a Minister wishes to include. It also provides for applications to be assessed by or on behalf of a Minister. As is currently the case, following assessments, recommendations must be made as to which measures or projects should receive disbursements. These recommendations are submitted in the first instance to the relevant Minister. They are then submitted to the Minister for the Environment, Community and Local Government for approval, subject to the consent of the Minister for Public Expenditure and Reform. The Minister for the Environment, Community and Local Government's recommendations are submitted to the Minister for Public Expenditure and Reform for approval. The list of approved measures and projects is laid before both Houses of the Oireachtas.
Section 44A provides that disbursements must be paid from the Oireachtas and reimbursed to relevant Ministers on the direction of the Minister for Public Expenditure and Reform by the NTMA and must be regarded as appropriations-in-aid.
Section 4 is a technical amendment, updating cross-references to the NTMA and the board. It also provides that the Minister must, before 30 June each year, prepare an annual report on disbursements during the preceding year, to include any findings, conclusions or recommendations concerning such operation. The annual report is submitted to the Government and then laid before each House of the Oireachtas.
Section 5 provides for the dissolution of the Dormant Accounts Board, with any references to it in any enactment or legal document to be construed as a reference to the Minister. The chairperson of the former board will remain accountable to the Committee of Public Accounts in respect of disbursements by that board during his tenure. This is a quite standard provision for former chairpersons of State bodies.
Sections 6 to 8, inclusive, make standard provision for transfer of assets, liabilities, taking over contracts, etc. Section 9 provides that the board must prepare final accounts, covering the period from the last annual accounts up to the day immediately before the appointed day. These accounts are to be submitted to the Comptroller and Auditor General for audit, and the audited accounts must be laid before each House of the Oireachtas.
Section 10 provides for the final report of the board, including particulars of those to whom disbursements were made and the amount of each disbursement since the last annual report of the board. This report will be laid before the Houses of the Oireachtas. Section 11 provides for the Minister to take ownership of the records of the board. Section 12 provides that the plan for 2009 to 2011, as prepared by the board and approved by the Government, continues in effect until the Minister's first disbursements scheme is made, and must be treated the same as if it was a disbursements scheme made by the Minister.
Section 13 updates the principal Act to take account of the new term, "disbursement scheme", and other technical amendments. Section 14 provides for repeal of sections 30 to 40, inclusive, of the principal Act relating to Dormant Accounts Fund Disbursements Board provisions. Section 15 deals with the Short Title, collective citation and commencement.
The Government has provided for a range of rigorous measures in the Bill to secure transparency and accessibility by ensuring decisions on the fund are informed by the public interest, accessible to public application and fully subject to public scrutiny. The Bill will assist the State in using the resources available to it in a more focused and effective way for the purpose of tackling severe disadvantage. I commend the Bill to the House.
I welcome the Minister to the House. The purpose of the Bill is to abolish the Dormant Accounts Board and to vest the powers in the Minister. I have no great difficulty with that; I can trust this Minister and, I hope, his successors in time to look after it. The Minister has paid tribute to the Dormant Accounts Board which has done excellent work in coming up with the money that was lying dormant in accounts. After a set number of years it was taken into this kitty, so to speak, and several valuable projects, including a number I can think of in the Cork South-West constituency, benefited. Over the years it has funded youth cafés and other such matters. This continues the policy of the previous Government which believed that the Dormant Accounts Board had more or less outlived its purpose and that a new approach was needed. In this regard the Minister has the support of this side of the House for the Bill, which I wish a speedy passage.
I believe the funding from dormant accounts has now peaked. It is like oil resources. There was a substantial amount in the kitty seven or eight years ago and now obviously there is less of it there. It is appropriate that the board should be wound down. While I do not say this disparagingly of the board, it gets rid of another quango, so to speak.
While I may be incorrect I believe this all came about in an ironic way following a major investigation led by the former Deputy, the late Jim Mitchell, into the accounts in foreign banks. People were putting money offshore and a lot of money came in from that. As Revenue and banks trawled through accounts, they discovered a lot of money where there was no traceability of the account holders and consequently it came up with the Dormant Accounts Fund, which has done considerable good work using unclaimed money.
I recently looked through an old bank account to ascertain if there was any small amount left there. I discovered that in an account of my late mother who died in 1983 there was still some £70 or £80 left. The name Mary O'Donovan is quite common in west Cork and I suppose it was a small amount of money. I advised the bank she was long gone and there was no point in taking out a grant of probate or administration for the amount in question. It just goes to show there are still small pots of money throughout the country in various banks. If the dormant accounts idea was to be put into practice, perhaps the Minister might say that in these difficult financial times — I am putting on my legal hat here, although I have not practised for 14 years — the State and the Exchequer are entitled to get their hands on money or property when there is an end to the line of succession.
This Bill is welcome for reasons already outlined. The Minister is going in the right direction and it will be neater for him to take charge of it. With the public expectation being that this money will be properly disbursed, I have no doubt that he will ensure that such an expectation is met. I have no doubt that such money will be used for very valuable purposes to deal with people who are socially disadvantaged, educationally disadvantaged or who may have disabilities. That is a good idea, so I wish the Bill a speedy passage through the House. It has the full support of this side of the House.
Cuirim fíor-fáilte roimh an Aire chuig an Teach. Tá mé ag ceapadh go gcuirfimid a ainm ar an gcathaoir seo. Tá sé sa Teach go minic. I welcome the Minister to the House to discuss this very important Bill. The Minister has outlined the disbanding of the Dormant Accounts Board and the transfer of its legislative functions to the Minister for the Environment, Community and Local Government.
The Dormant Accounts Acts provide for an annual transfer by credit institutions and insurance undertakings of moneys in accounts determined to be dormant into the Dormant Accounts Fund. From its establishment in 2003 to the end of February 2011, transfers to the Dormant Accounts Fund have totalled approximately €589 million, which includes interest earned of approximately €35 million. Prior to the establishment of that fund, that interest earned was the property of the various financial institutions; therefore, it is a plus that the Dormant Accounts Fund was initiated in the first instance. Funds reclaimed in that period by account holders amounted to approximately €208 million.
Following the enactment of the Dormant Accounts (Amendment) Act 2005, decisions on disbursements from dormant accounts are now the responsibility of the Government. The Dormant Accounts Board was established in 2006. Its role is to provide independent advice in respect of Government decisions on dormant accounts funding. The function was transferred to the Government in 2005, while the board has since only acted in an advisory capacity. We always hear that Ministers have enough advisers at this stage. There are ten Departments involved in the disbursement of those funds, so there is advice coming to Ministers from every quarter and every agency on the disbursement of this fund.
The 2001 legislation provides for the administration of unclaimed accounts in the various institutions 15 years after they were established, and the funds are then disbursed to the various projects. These projects are in economically and socially challenged areas, or for people with disabilities or who are educationally disadvantaged. To date, more than €140 million of the Dormant Accounts Fund has been committed to projects around the country. The funding has been available over the years, and the Bill does not propose to change any of the underlying principles of the Dormant Accounts Fund. Those principles, which are admirable, will remain unchanged. They will assist the people who they were intended to assist in the first instance; those people who are economically, socially, or educationally disadvantaged, or those who have a disability. Future disbursements will have regard to those areas, and the priorities and policies of the Government will be maintained in that light.
The Bill strengthens the Government and Oireachtas oversight of the area, while at the same time simplifying administrative arrangements and the associated process in respect of grants awarded from the Dormant Accounts Board. The Minister pointed out that the amount coming into the fund has decreased since its establishment. In 2003, it was around €200 million, whereas it is now under €50 million. Education of the people in respect of claiming funds and ensuring that there are no dormant accounts would also have been responsible for this decline. In its 2010 report, the board recommended new sources of funding. Perhaps the Minister should look at different agencies for such funding. I believe a reply was given at the time that it was not the time to put more money into the fund and that it would be appropriate to wait for better times. That was the statement made in early 2010, but we know that these are not better times now.
In July 2009, the special group on public service numbers and expenditure programmes recommended the discontinuation of the Dormant Accounts Board, forecasting an annual saving to the exchequer of approximately €1.7 million. That money could be put to good use by Departments. Therefore, it would be a logical step to disband this board in an orderly fashion, and the Bill provides for this. A previous speaker spoke about disbanding a quango. The Minister thanked the board members for the work they have done, and they have outlined the various steps and methodology for the disbursement of this fund, and this will continue.
One area of existing legislation that concerns me is that the Government is liable to disburse funds to the original dormant account holders after the stipulated 15 years in which there has been no transaction on the account. If a large number of dormant account holders were to reclaim their money simultaneously and these claims amounted to more than 15% of the total Dormant Accounts Fund, as provided for in the legislation, the State coffers could be seriously drained and this must be addressed. The legislation states that the money may be reclaimed by the account holder at any time. The previous speaker alluded to a scenario where the account holder is dead, but this is not stipulated in the Bill and we do know that account holders and beneficiaries of accounts might be in dispute. Therefore, it should be put in the Bill that the beneficiary of the account is the person that reclaims the money.
According to section 22 of the 2001 Act, the Minister is empowered to appoint inspectors to ensure compliance by the financial institutions with the Act. In its 2010 annual report, the Dormant Accounts Board expressed concern that up to that year, no inspectors had been appointed. We have plenty of inspectors, but they are obviously not inspecting this fund, which further exemplifies the blasé approach to financial regulation that was taken in recent years. I hope the Minister ensures that these inspections take place, because it is up to the inspector to ensure that the banks inform the people who have the accounts that they are approaching the 15 year threshold for the creation of a dormant account. There does not have to be an inspection of every institution, but it should be done on a spot check basis.
Ultimately, the Dormant Accounts Board does not have any executive functions but serves to provide independent advice to the Government and to act as a critical appraiser relating to Government decisions on the fund. According to the regulatory impact analysis of this Bill, the functions of the board are largely historical and its role has been substantially reduced since the enactment of the 2005 Bill. That is very welcome.
Will the role of Pobal continue in the administration of the fund? Perhaps it could be subsumed into the Department if it cost more to administer it that way.
I welcome the Minister to the Upper House. He is a frequent visitor here, which is a credit to him, and he always provides information which is relevant to the day-to-day workings of the country. Whoever decided to proceed with this dormant accounts legislation was wise because a lot of old money was lying in banks which got their hands on the interest. When the Government introduced this legislation, it was a good day's work. As the years went on, people became more conscious that money was lying dormant. As Senator O'Donovan said, €70 or €80 here and there can add up to a lot of money. We should publicise the fact that there are still dormant accounts in existence, so that the money can be used for social purposes in disadvantaged areas.
It is fairly straightforward to work out the question of unclaimed life assurance. Do pension funds which fall into the same type of category come under the dormant accounts legislation? For example, self-employed people may have contributed to personal private pension funds with the money being controlled by life insurance companies. The legislation, however, only covers unclaimed life policies. There may be another source of income from such pension funds. From my own experience, I know that many small business people would have taken out private pension policies. They may then have given up that business and discontinued the policy. There may be €2,000 or €20,000 involved or, unfortunately, they may have died. The life insurance element of single people with no family connections may have been tackled but the pension fund could be another source of income for the Government.
I am delighted the Bill tidies up the efficiency of the system. One cannot emphasise enough the importance of that aspect. The disbursements will help people who are economically, socially and educationally disadvantaged, including those who have disabilities. Most of us were at the carers' group briefing this morning, which included an outline of the difficulties encountered by a female carer and her 19 year old son. We must target this type of funding effectively. We spend a lot of money on mental health, depression and suicide awareness. Groups like Aware and smaller groups should be targeted for funding. In recent years, many bigger charities have been sweeping up much of the money. Those involved in smaller groups, such as Aware, are not noisy individuals. They are quiet but they have difficulty in funding their groups. We should target small groups which are falling through the cracks, so to speak, as they do not have the same public profile as larger charities. Groups like Aware and others should be considered for such funding. I also support any move that will save costs and in that respect the Bill is welcome. Perhaps the Minister can provide some detail on pension funds.
I will be brief. I endorse what the Minister said at one point in his speech. Everyone in the House welcomes the use of these unclaimed moneys for the betterment of the less well-off in our society. Such work for the public good must continue and that is the Bill's intention, which I commend. It is important not to have a slush fund of some kind with high administration overheads and the money going to quangos or bureaucracies. We sometimes hear those complaints about lottery funding. If this is targeted and means-tested for genuinely deserving low-income people, it will merit our support. I commend the Minister for introducing the Bill.
I welcome the Minister to the House as well as welcoming this new legislative proposal. I wish to touch briefly on some aspects of dormant accounts, including how the banks deal with them. Some years ago, a client of mine received a letter from the Revenue Commissioners concerning such an account. She found that she had an account of £50,000 which had been opened in 1976. She never had the kind of money that was in that account and when we tracked it down we found that her brother had come home from England and had opened the account in her name. He had gone back to England and died about six months after opening the account. In the intervening 20 years there was no correspondence with her by the bank. In dealing with estates, when members of the legal profession write to banks seeking information on accounts, they may find that all the searches are done on a "Michael Murphy" of one address. If there is any variation in a name, the banks do not provide any assistance. We are concerned about that issue.
Some years ago, a financial institution tried to introduce a fee for any searches that were requested, but such fees should be discouraged or not allowed. When people are genuinely trying to find accounts, in particular when they do not have an immediate family and not all the information is available to those administering the estate, banks should provide as much assistance as possible. Unfortunately, however, full assistance is not being provided by financial institutions and, as a result, accounts are never traced.
There has been more movement of people within the country in the past 20 years. At one time a person might have bought a house and lived in the same place for a lifetime. In the past 20 years, however, that pattern has changed substantially. As recently as yesterday, I received a letter from the Department of Social Protection in respect of the previous resident of my house who left more than 14 years ago. The Department was trying to track information on an employee of the previous resident. I am surprised the information had not been updated. Likewise, information is not updated with banks either. Banks should be aware of this matter and need to be more helpful in giving out information, particularly in dealing with the administration of an estate.
My colleague, Senator Cáit Keane, mentioned the failure to appoint inspectors. As we are relying on the 2010 report, I am not sure if there was any update. As the previous Act provided for the appointment of inspectors, it should be followed through in the new legislation. The same applies to life assurance policies in order that people who took the time to invest in those funds are entitled to get the moneys back. The need for inspectors in that area is essential.
I welcome the legislation. The fund has been used very well and many projects have benefited greatly from it. The money has been put to good use. Nonetheless, we need to ensure that such money goes back to its rightful owners who took the time to invest and set it aside for future use.
I welcome the Minister back to the House and I support the thrust of the legislation, albeit with a few caveats. The Government essentially intends to save costs and deal with administration issues. This is being seen as a quango in some respects, but I support the need to deal with those issues. Increased transparency is required in disbursing any dormant account funds. Many community projects benefit from dormant accounts funding. I have worked in the community development sector as a volunteer. I was a member of a management committee of a community development project in Waterford. I am aware of many of the sacrifices made over many years by volunteers throughout the country in the community development sector and agencies. The Minister will be aware that many community development projects have been placed under the control of Partnership. The boards of management are now gone and this is perceived by many as a hollowing out of genuine community development. There is very genuine concern about funding for community development. Most of the projects concerned operate on a shoestring budget. All those I know in Waterford operate on a shoestring budget in very difficult circumstances. They are trying to do work for the most disadvantaged communities.
I have lived in three local authority housing estates, of which I am very proud. All had community development projects. The reason they had them was the need for projects to help the communities concerned to deal with the social and economic issues at the heart of many of their problems. The projects benefit from funding from the Dormant Accounts Fund. While the Minister seeks to save money and cut costs, of which we are all in favour, it is important that he does not cut funding for community development projects. Doing so does not make sense and complicates matters for all those people trying to provide community development services.
Will money disbursed through the Dormant Accounts Fund be ring-fenced? If the board is to be subsumed into the Minister's Department, will the funding become part of his budget? What accountability and transparency mechanisms will be in place? Will the Minister publish details annually on what money is being spent on and where it is being spent?
There is a need for value-for-money-based administration of the fund in order that we will spend less on consultancy and other services. We see this right across the public sector. This is an area on which I commend the Minister for at least trying to achieve savings but it should be noted there are many areas right across the public service where, as we know, austerity measures are being implemented and where there have been cutbacks. I mentioned cuts affecting the community and voluntary sector but there are also cuts affecting health and education, yet there is a great deal of waste in the system.
The Minister is saving a very small amount of money. Will he use the money saved to reinvest in communities? Will the money just be part of general departmental savings? This is a reasonable question for people to ask. If we are to save money, we need to know what will become of the savings.
A number of Senators referred to cuts of £4 billion in the North by the Tory Government. Senator Harte referred this morning to these cuts. The Assembly in the North does not have fiscal powers, nor does it have the opportunity to set or raise taxes, as the Minister knows. I hope the Minister's party and the Labour Party will work with those of us in Sinn Féin who are trying to obtain fiscal powers to allow Assembly Members in the North to make the kinds of decisions we would like Fine Gael and the Labour Party to make. In the North, there was an allocation of £80 million for community development purposes, despite the fact that there have been cuts in the order of £4 billion. It was still possible to find the money to invest in community services.
Did any of it come from the Northern Bank?
Would the Senator like to repeat that outside this House?
I would repeat it anywhere.
Would the Senator like to repeat that outside this House?
Yes.
Senator Cullinane to continue, without interruption.
I am sorry but an accusation was made by a Senator in the House.
I did not hear the Senator.
The accusation was that £80 million in funding, put in place by the Northern Assembly, was money taken from the Northern Bank. I ask that the Senator withdraw that comment, which is a disgraceful slur on the democratically elected Members of the Assembly in the North.
As I did not hear that comment, I ask Senator Cullinane to continue.
I ask Senator Harte to withdraw his remark.
It was a question.
It was a remark that the Senator made. He knows full well he is making a political point that is absolute nonsense.
The Senator is eating into his own time. I did not hear the remark. I ask the Senator to conclude.
Perhaps it shows that the Labour Party is under pressure. That was a disgraceful remark by the Senator in this Chamber.
The Senator may be able to address that on another occasion but not now.
I ask the Minister to deal with the issue of funding for community development projects throughout the country. This is very important. Taking money from the Dormant Accounts Fund and investing it in community development projects is one matter but, as the Minister knows, the cutbacks right across the community development sector are having an impact on the most disadvantaged communities in the State.
I welcome the Minister, Deputy Hogan, back to the House. I apologise for not being present to hear his opening remarks; I had to attend a function. He is one of the few Ministers who attends this House regularly to address concerns relating to his Department. I commend him again on doing so.
My party welcomes and supports this legislation. As has been outlined by a number of colleagues, the dormant accounts funding is ring-fenced for three specific areas, namely, economic and social disadvantage, educational disadvantage and for persons with a disability. Benefits pertain to respite care; the enhancement of play and recreational facilities for children and young people to make them accessible to people with disabilities; youth and community facilities in disadvantaged areas; facilities for the homeless; action to combat isolation; day care centres; programmes that help educate people about substance misuse; suicide prevention; enhanced facilities for those living in RAPID and CLÁR areas and local drugs task force areas; empowerment and promotion of equality for those with a disability; increased transport access and integrated mobility; and independent living and appropriate additional or enhanced services for those under this heading. In the area of arts, sport and science, there have been pre-school educational initiatives, literacy and numeracy initiatives, and intercultural and language programmes. This is just a brief outline of some of the excellent benefits of dormant accounts funding.
What role will Pobal have in the new arrangements the Minister is putting in place? Senator Keane has already asked that question. How much money is in the dormant accounts fund at present? I understand that, to qualify for inclusion in the fund, an account must be dormant for 15 years, and that, in April of each year, the relevant bank must notify the Department of that account. What independent verification is there of information given to the Minister by the banks? What plans has the Minister to spend the money in the fund? Over what period will it be spent?
I understand the application process is ongoing and that there is no particular deadline. I very much welcome that because good projects come to light at various times of the year. To impose a deadline on them would be unfair.
With regard to economic, social and educational disadvantage, I would like to see bigger grants available for capital projects throughout the country. Various grants have been given to organisations throughout the country and they have been put to good use. However, bearing in mind that money is scarce, if we are to consider capital projects that will provide facilities for the socially disadvantaged, in particular youth organisations, then 50% of the funding should come from the dormant account funds and the other 50% should come from private investment. There is an appetite among communities for such a grant and perhaps a ceiling of €250,000 or €350,000 could be put on the allocation from the Dormant Accounts Fund. I am keen to see the Minister's plans in this regard and to ascertain the total amount of money in the fund. Given the history of our banks, what independent verification is available or will be available from the Department to ensure the banks are telling the Minister the truth? Again, I welcome the Minister and we are pleased to support the legislation.
I will be brief. I welcome the Minister to the House to discuss this important legislation and thank him for his commitment to the House. He will be with us again early in November to discuss several items which Members have raised during recent weeks. The Dormant Accounts Board has carried out great work over the years but there is a time limit to everything and it is being wound up by the Minister now. Nevertheless, the Minister is putting in place a transparent process, as he outlined in his speech, with regard to how the fund will be administered in future. The action plan will be laid before the Houses of the Oireachtas and can be challenged within a 21 day period. Also, it must be published and provision is being made for adoption or non-adoption of the plan. Applications will be invited under the action plan as well. There is the utmost transparency in the process.
There is a need for every Minister and Department to make cuts. The country is in a bad state. There is much talk of getting back our economic sovereignty and the Government is going about it. This is about cuts in the Minister's Department. I commend the Minister. We have been discussing quangos. I understand 43% of the quangos under the Minister's aegis have been abolished or amalgamated. This example should be followed by other Ministers in Government. There have been calls for ring-fencing of money that will be saved. The savings will go towards helping us to get back our economic sovereignty and to enable us to run our own affairs in future. I commend the Minister on the legislation before us and I wish him well.
Before I call on the Minister to respond I welcome him and concur with the positive remarks made about him on both sides of the House.
I am beginning to think it could be a poisoned remark.
The Minister should wait until 7 November.
I suspect it will not always be the case. I thank all Senators for their contributions to the debate. It was interesting to hear the different perspectives which focused on the dormant accounts aspect of the Bill generally, as one might expect.
I refer to some of the contributions made. Senators Keane and Burke mentioned the banks and whether they would be inspected. This issue was taken up by Senator Wilson as well. How do we ensure they are compliant with the legislation? Under the Dormant Accounts Act 2001, which has been amended several times with regard to unclaimed life assurance policies, the Financial Regulator and the Central Bank may authorise inspectors for the purpose of ensuring compliance. I understand the Central Bank, acting on behalf of the Minister for Finance, has engaged PricewaterhouseCoopers to carry out inspections on dormant accounts over a two year period. They have completed the first two inspections. There is engagement by the Minister for Finance to ensure compliance with the legislation and this is welcome.
Senator Harte made a valid point about pension funds. As a former insurance broker like Senator Harte, I understand that there would be some lying around in terms of pension funds from various individuals who may not have claimants. The position regarding dormant accounts funding is that, in practical terms, increasing the amount available in the fund does not necessarily allow for the introduction of new dormant account measures or programmes. Although supplying the provisions of the dormant accounts legislation to pension fund accounts would increase the amount available in the fund, Departments and agencies must still source the moneys for dormant accounts programmes and measures from their Exchequer allocation in the same way as any other funding programme.
It is interesting to note how Departments treat these funds for accounting purposes. Since the funds are claimable by the individual or their estate on an ongoing basis until such time as the account is declared a dormant account, it remains a liability on the State in accountancy terms. When the money expended on dormant accounts measures and programmes are reimbursed from the Dormant Accounts Fund, the refund is to the Exchequer rather than the spending Department. I will seek to establish the position regarding pension funds and the level of interest in that matter in advance of Committee Stage and I will come back to it. I understand the point the Senator is making.
Senator Cullinane raised the matter of ring-fencing the money. The Senator will appreciate that given the focus as set down in the legislation a significant proportion of the funding disbursed to date from the fund is already channelled through community and voluntary groups under the existing arrangements. This is in addition to the other substantial supports provided by the Department of the Environment, Community and Local Government for that sector annually through other schemes and programmes. The intention has always been to ensure a broad and balanced range of potential beneficiaries from dormant accounts disbursements and this should continue in future rather than focusing on a particular sector. Given the reduced level of funding available for disbursement from the fund, ring-fencing is not feasible.
The issue of the current surplus in the account was raised. Since the establishment of the fund in April 2003 to the end of August 2011, the transfers to the fund have totalled €626.59 million, including interest earned of some €35.53 million. Funds reclaimed in this period by account holders amounted to approximately €218.7 million and the net value of uncommitted funds is €81.991 million.
Other speakers referred to some key general provisions of the Bill and I welcome the contributions of Senators Barrett and Cummins in this regard. When dormant accounts legislation was introduced first the priority was to ensure that large financial institutions would not benefit from the money, which had happened previously, but that the money would go back to account holders or people who were deprived or disadvantaged. This will continue to be a priority under the new arrangements.
As recommended in the McCarthy report, the Bill proposes to dissolve the Dormant Accounts Board but it would transfer the statutory functions of the Dormant Accounts Board to the Minister for the Environment, Community and Local Government. The existing arrangements will continue. This will strengthen Government and Oireachtas oversight of the area while simplifying the arrangement and the associated processes in respect of grants awards from the dormant accounts fund. Decisions on the spending of the dormant accounts fund will be streamlined and less intrusive of Government business and this will enhance the effectiveness and efficiency and the manner in which we make disbursements. The objectives of the scheme will remain the same and the Bill reaffirms that dormant accounts funding will continue to be spent to assist persons in the categories outlined.
Disbursements will continue to be made through Votes of relevant Departments and will be Exchequer-neutral although it cannot be regarded as free money. The Bill provides that the cost of engaging service providers such as Pobal to administer the application process will be met from the fund while the normal administration costs incurred by the relevant Departments will be met from within existing budgets. I have no plans other than to continue with Pobal as the source of administration of these funds and funds from various other Departments.
Modest annual savings, currently of approximately €120,000, will accrue from the dissolution of the board but the administration costs associated with processing applications will be significantly greater, as I stated.
Pending disbursement, moneys in the Dormant Accounts Fund are managed by the National Treasury Management Agency. The NTMA had €132 million under management at the end of 2010 and some €39 million was transferred to the fund in 2010, while €20 million of previously dormant funds were reclaimed. Disbursements from the fund amounted to €20 million in 2010. I have already indicated the total amount disbursed since its establishment in April 2003 up to the end of August 2011.
The board's function is largely historical in 2011 and this is why we are bringing forward the legislation. There is a requirement to draw up a three year plan upon which detailed disbursement measures and programmes are based and to prepare an annual report that must be laid before the Houses of the Oireachtas and one has 21 days to challenge it there. The annual report and the review relate to earlier rounds of funding when more funding was available.
In summary, the legislation provides for the transfer to my Department of the function of the Dormant Accounts Board, which will continue to be accountable until the point of its dissolution. There is no change to the themes under which the disbursements can be made, namely, economic and social disadvantage, educational disadvantage and disability. Disbursements will have regard to these three themes and take account of the policies and priorities of the Government, availability of moneys, cost effectiveness of the expenditure and outcome of any previous reviews. Action plans must be prepared in consultation with the relevant Ministers and laid before the Oireachtas for a period of 21 days. This addresses a point made by Senator Cullinane. It should also be noted that the relevant joint committee of the Oireachtas already has separate powers to require me to appear before it in relation to any matter under my remit, including dormant accounts. The expenditure will also be subject to normal scrutiny by the Comptroller and Auditor General and Committee of Public Accounts.
I thank Senators for their contributions and support for the legislation, the purpose of which is to do nothing more or less than tidy up matters to take account of the level of funding available in the Dormant Accounts Fund relative to the significant amount of money that has been in the fund heretofore. The transparent and open arrangements outlined in the legislation will reassure Senators that the mechanism for the disbursement of funds from this source of moneys will be accountable and transparent.
Question put and agreed to.
Sitting suspended at 2.05 p.m. and resumed at 5 p.m.