SELECT COMMITTEE ON COMMUNICATIONS, ENERGY AND NATURAL RESOURCES debate -
Wednesday, 27 May 2009

2009 Annual Output Statement — Department of Communications, Energy and Natural Resources.

Chairman

The purpose of the meeting is to consider the Revised Estimates for Vote 30 — Department of Communications, Energy and Natural Resources, which was referred to the select committee by an order of the Dáil of 23 April. On behalf of the select committee, I welcome the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, the Minister of State at the Department of Communications, Energy and Natural Resources, Deputy Conor Lenihan, and their officials.

Members will be aware that, as part of the budgetary process reform initiated in 2006 by the then Minister for Finance in his Budget Statement, each Department must now publish an annual output statement for consideration by Oireachtas committees. In line with that process, an output statement has been provided and circulated, with a briefing, to members. This is a very important initiative which is intended to facilitate better parliamentary involvement in the budgetary and Estimates process. In addition, the then Minister for Finance, in a letter dated 1 February, requested that the Estimates debates have a particular focus on the outputs to be achieved for the moneys to be voted.

The clerk has circulated a proposed draft timetable for the meeting which allows for opening statements by the Minister and the Opposition spokespersons, to be followed by an open discussion by way of a question and answer session. I call on the Minister to make his opening statement.

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan)

I am pleased to introduce the 2009 Revised Estimates for the Department of Communications, Energy and Natural Resources. The gross provision of over €519 million, with another €15.5 million capital carryover from 2008, represents an increase of 7% on last year's outturn. This comprises a decrease of 1.5% in gross current expenditure and an increase of 31% in gross capital expenditure. The major increase in capital funding mainly reflects the Government's support for an acceleration of funding for key energy efficiency measures. These measures will have the twin beneficial effects of reducing energy usage and carbon emissions while creating badly needed jobs in the construction sector. The Vote also includes significant provision for funding in the telecommunications and broadcasting areas. Overall, the Vote provision is supporting activities in key areas that will stimulate the future sustainable growth of the economy.

Energy, communications and natural resources policies have critical contributions to make in the three core areas of supporting competitiveness, enhancing sustainable development and developing innovation. In addition, energy policy has a crucial role to play in addressing the major global challenge of climate change. The energy sector is pivotal to national competitiveness and continued economic and social prosperity. A key element of the framework for sustainable economic renewal is investment in renewable energy and promotion of the green enterprise sector and the creation of green collar jobs.

A world-class communications infrastructure is also critical to our continued economic and social prosperity. The Government is setting the development of a knowledge society at the heart of our economic and social policy. For this to occur, Ireland requires a truly national broadband infrastructure of world-class standard. We need a better broadband infrastructure to attract the cutting edge, knowledge-based industries needed to secure Ireland's future economic prosperity and competitiveness. Although this will be delivered primarily through private investment, the 2009 Vote provision will fund significant enhancements to our broadband infrastructure. Effective and efficient public service delivery is fundamental. Priority will be given to the best use of resources by my Department, focusing on outputs, outcomes and the achievement of value for money. In this regard, I am pleased to present to the committee the Department's annual output statement, a copy of which each member has received. Good progress was made in 2008 on delivering on target outputs. The key output targets to be delivered in 2009 can be found in part 4 of the statement. The output statement has been further refined in order that it is more focused on the important headline outputs rather than internal processes and activities. In addition, we have set out a brief rationale for how programme outputs contribute to the achievement of key strategies.

The administrative budget of €30.141 million is outlined under subheads A1 to A9. The budget provides, among other matters, for the salaries and associated costs for the staff of the Department. It also covers the engagement of consultancy expertise, the ongoing implementation of the Department's IT strategy, staff training and development and value for money and policy initiatives. The reduction in the 2009 administrative budget provision, in comparison with the outturn for 2008, reflects the efficiencies driven by the Government and the focus on achieving value for money. Since November 2007 the number of staff employed in my Department has been reduced by almost 50, or 14%. Notwithstanding this reduction, efficient service delivery has been maintained across all areas of the Department. This improvement in productivity must be reinforced in 2009 and coming years in the light of the inevitably constrained resources that will be available for administration.

Our communications budget comprises €54.803 million, including €7.997 million in a capital carryover from 2008. This sum of almost €55 million is being provided in 2009 for communications and multimedia developments. Availability of broadband services in all areas of the country and a major enhancement of broadband speeds are major priorities for the Government. The latest market report from the Communications Regulator underlines the remarkable progress made in broadband provision in recent years. It indicates there were 1.2 million broadband subscribers at end of 2008. This figure includes mobile broadband users and corresponds to a penetration rate of 27.1 subscribers per 100 of population. This 27.1% penetration rate is spread across homes and businesses and covers more than 62% of homes in Ireland, 83% of small and medium enterprises and 100% of large enterprises.

The latest OECD report which includes data up to June 2008 is also testament to the considerable improvement made in recent years. It shows that Ireland had the fourth strongest per capita broadband subscription growth of the 30 countries ranked. With similar fast uptake of broadband noted in previous reports, Ireland has closed the gap on the OECD average with our improvement in the past two years. This improvement has occurred notwithstanding the continued exclusion from the OECD figures of mobile broadband, an area in which there has been exceptional performance by Ireland. Over €46 million is being provided in 2009 for Government investment in broadband infrastructure.

The national broadband scheme procurement process concluded in December 2008 and my Department entered in a contract with 3 for delivery of the service. The company will extend its network to provide mobile wireless broadband services for residences and businesses within the NBS coverage area. The national broadband scheme will be rolled out on an electoral division basis and address electoral divisions, of which 1,028 are deemed to be without adequate broadband services. The 2009 Estimate includes some €27 million to be spent in respect of the national broadband scheme.

I also wish to ensure Ireland is provided with high speed international telecommunications links which will make the country a more competitive and attractive region for foreign direct investment, especially for new knowledge economy businesses. In this regard, I am glad to say good progress has been made in implementing the Kelvin international connectivity project which will provide direct international broadband connectivity for 13 towns on both sides of the Border. This is a €30 million North-South project under the INTERREG IV cross-Border co-operation programme and is a joint project between the Department of Enterprise, Trade and Investment in Belfast and my Department. The 2009 Estimate includes funding of €4.9 million for Project Kelvin.

A key area of my broadband policy is to develop the knowledge workers and digital citizens of the future. Schools with necessary broadband connectivity will be crucial in underpinning this aim. Funding is provided in the Vote for a pilot project involving 100 megabits of broadband connectivity for 75 second level schools. The procurement process for this pilot project will commence shortly. My objective is to see this level of connectivity for all second level schools on a phased basis in the coming years. This will enable the high level applications that will train our students for jobs in the knowledge economy and provide them with a window for the wider world for all their education needs.

A sum of €5 million is provided in 2009 under subhead B2 towards the operating costs of the National Digital Research Centre to continue its full development in the area of translational research. A further €1.783 million under subhead B2 is provided for the work of the Digital Hub Development Agency. The agency continues to attract digital media enterprises, with a current cluster of 101 companies now employing more than 870 people.

Subhead B3 represents my Department’s allocation from the dormant accounts fund under the RAPID programme and €1.147 million is provided for projects that will assist disadvantaged young people to exploit information and communications technologies opportunities. A sum of €824,000 is provided in subhead B4 for the information society and e-inclusion. The BeneflT e-inclusion grants scheme is an important resource to help bridge the digital divide. In total some €2.23 million has been allocated to the 87 successful projects from community, voluntary and not for profit organisations throughout the country to fund ICT capability for many citizens.

Subheads C1 to C6 provide €270.535 million in respect of the broadcasting sector in 2009. It is estimated that broadcasting licence fee revenue of €229.778 million under subhead H4 will provide for grant-in-aid of €205.260 million to RTE under subhead C1. In addition, An Post will receive licence collection funding of some €13.714 million under subhead C2 and a contribution of more than €10.804 million will be made to the broadcasting fund under subhead C5.

The provision of €36.133 million — current and capital — under subhead C4 will allow TG4 to further strengthen its Irish language schedules. This allocation provides for some 88% of TG4's overall funding. Grant-in-aid of €4.575 million is provided under subhead C3, for the Broadcasting Commission of Ireland, BCI. The Broadcasting Bill 2008 provides for the establishment of a new body, the Broadcasting Authority of Ireland, BAI, which will replace the existing BCI and BCC and has an extended remit. The Bill provides for the BAI to be funded in future by an industry levy rather than by the Exchequer. The Bill is at final stage in the Houses of the Oireachtas, and it is anticipated that it will be enacted during June 2009. The estimate for DTT costs in 2009 is €49,000 under subhead C6.

The Vote makes provision to spend some €122.5 million in the energy area — an increase of 81% over 2008. This will fund a number of initiatives which I announced earlier this year. The most significant of these is the home energy savings scheme, €45.5 million in 2009, which will support up to 30,000 home owners in making their dwellings more energy efficient by co-funding insulation and other energy efficiency improvements. Insulation is the single best way of saving money on energy. Homeowners can save up to €700 each year on their energy bills depending on the mix of measures implemented.

This scheme complements changes in the building regulations made last year, which will ensure that new homes will be substantially more energy efficient than was previously the case. The home energy savings scheme is aimed specifically at those older houses built prior to such standards being in place.

The warmer homes scheme has also been expanded — this is the main intervention tackling energy efficiency in households at risk of energy poverty. The funds available to the programme this year — €15 million — are being supplemented by an additional €5 million from the ESB and Bord Gáis.

The public sector energy efficiency target support scheme, which has a budget of approximately €6 million, is another new programme designed to underpin the achievement of the national 33% energy efficiency target for the public sector in 2020 as set out in the recently launched action plan on energy efficiency. One of the primary focuses of this programme will be to assist public sector bodies to undertake structural improvements that will improve the efficiency of public sector buildings. We are also expanding our energy efficiency supports to business, not only through an expansion of the qualifying categories under the tax-based accelerated capital allowances scheme, but also through our targeted business energy management programmes.

Members of the large energy network saved some €55 million in 2007, thanks to their involvement in the programme. This year additional funds are being made available to assist companies to undertake capital projects that will improve cashflow and help protect jobs. Now more than ever our energy management programmes are essential for keeping jobs in this country.

The ocean energy research programme which began last year is now up and running and will deliver a number of key outputs this year. Some €7 million is being provided for the area in 2009. The programme will support ocean technology developers based in Ireland in bringing full-scale prototypes to market. It will also establish Ireland as a location of choice for prototype development and actual generation. To that end, the ocean energy development unit in Sustainable Energy Ireland is moving ahead with planning for a full-scale test site in County Mayo and a grant-aid package for technology developers is also under way. Work has also begun on upgrading the hydraulic and marine resource centre in UCC to support the design and modelling work involved in this programme.

I will ask my colleague, the Minister of State, Deputy Conor Lenihan, to detail some of the budget measures in the natural resources area.

Minister of State at the Department of Communications, Energy and Natural Resources (Deputy Conor Lenihan)

With regard to the provision of more than €18 million in 2009 for the natural resources area, direct expenditure in the offshore exploration area is small but the Department performs an important regulatory function in this area. The Irish offshore which has recognised potential as a petroleum producing area is relatively under-explored. The regulatory framework for exploration and production recognises that fact and is designed with the aim of attracting mobile international exploration investment into Ireland. My Department takes a proactive approach to promoting the opportunities for exploration investment in offshore Ireland. In the past decade, there has been an upswing in the number of companies seeking exploration licences and the number of exploration wells being drilled.

Subhead E2 provides funding of over €7 million in respect of mining services in 2009. This includes €4 million in respect of rehabilitation works at Silvermines, County Tipperary. The provision of €1.228 million under subhead E4 will fund a range of multi-annual initiatives in the geoscience field which includes the Griffith geoscience research awards.

Subhead E5 provides €3.363 million in 2009 for INFORMAR, the successor of the Irish national seabed survey. INFORMAR is designed to map Ireland's shallow inshore waters, thereby completing a process initiated under the Irish national seabed survey which mapped Ireland's offshore areas. This baseline data is vital for the development of our offshore, including renewable, energy projects.

Subhead E6 provides for the payment of grant-in-aid of €5.125 million to Ordnance Survey Ireland. As the national mapping agency, many aspects of OSI's activities are undertaken in the public interest and the Exchequer subvention is designed to bridge the gap between the level of income from its commercial operations and that of its expenditure.

Some €38 million is provided for inland fisheries of which more than €34 million is for the management of the inland fishery resource. This includes almost €30 million for the operations and activities of the central and regional fisheries boards. Specific activities include salmon management initiatives, the water framework directive, the habitats directive and the eel management plan. A total of €4 million is being provided as the State's 50% contribution to the operational costs of the Loughs Agency. The latter is a North-South body with responsibility for conservation, protection and development across the Foyle and Carlingford catchments.

Following from the 2009 budget day announcement of the rationalisation of State agencies, the Government has now formally approved proposals for the restructuring of the inland fisheries sector which includes the creation of a single strengthened inland fisheries authority to be known as Inland Fisheries Ireland. This authority will replace the existing Central Fisheries Board and the seven regional fisheries boards. A restructuring implementation group has been established and is working to develop the key features and structures of the new model. Primary legislation is required to deliver the proposed restructuring and in this regard, the Government has recently approved a draft heads of a Bill. It is expected that the legislation will be published and progressed through the Oireachtas in the early autumn and that the new authority will be in place by the close of 2009.

The Government remains committed to the conservation imperative and halting the decline in salmon stocks. We will continue to build on the success of the measures introduced in 2007 for the continued protection of wild salmon stock. The €25 million salmon hardship scheme directed at commercial salmon fishing licence holders has now closed to applicants. Added to this, the €5 million community sport scheme launched in March 2008 is designed to assist the development of additional economic opportunities for the labour force previously employed in the ancillary sectors of the commercial salmon industry. An amount of €4.187 million has been provided for the outstanding payments under these two schemes in 2009. More than €0.8 million is being provided under subheads G1 and G4 to fund other organisational initiatives.

Deputy Eamon Ryan

We are in difficult economic times. We need to create new economic opportunities in our country and especially to stimulate new job creation. One of the prime responsibilities in that regard is in our own area. It is in the new digital and energy economies that there is most activity, opportunity for new job creation and job creation actually happening. All our focus is on expansion in that area. We are promoting a digital advance and a fossil fuel retreat. This accounts for the increased budget in our Department compared with every other Department, particularly in the capital side. This signals a Government intent in that regard.

Deputy Simon Coveney

I welcome the Minister and his big team. We are somewhat outnumbered on this side. There are other political distractions at present but this is an important meeting. It sets the agenda for the money which will be spent by this Department.

I would like to flag one or two concerns which I ask the Minister to address. First, €15.5 million is being carried over from last year. What was that money to have been spent on last year and why was it not spent? Was the carryover always part of the plan? Second, the most significant cutback is in the information and communications technology programme. It is reduced from €49 million to €38 million. Will that saving make up for some of the €15 million which is brought forward from last year to this year? It is quite a dramatic cutback, both in percentage and real terms. The detail of the Estimates does not address this issue. Is it related to the metropolitan area networks? The Minister's Department is central to the economic future of the country and job creation. The information and communications technology budget is key to this. The energy budget is also important in this area and the Minister has done well to achieve increases in that budget.

I am also concerned about the budget for e-inclusion. My party has made a number of efforts to reignite an e-government programme, for which, I understand, the Minister now has responsibility. A year ago, the Government agreed to a Fine Gael Private Members' motion on a new e-government programme. The Government did not follow through on that agreement. A new e-government programme was to have been agreed last summer but nothing has happened since then. There are significant opportunities for savings in the cost of delivering Government through e-government, in terms of travel and staffing. I would like the Minister to comment on that. I presume that is within the inclusion element of the budget.

There is an old chestnut of mine under the broadcasting element of today's discussion. The Minister needs to seriously consider that it is costing us more than €12 million to collect just over €200 million in television licence fees. It is not an efficient way to fund public service broadcasting. I listen to advertisements on the radio every day highlighting the number of inspections of people's houses and apartments looking for televisions under the beds. That is not a sensible way to collect money. It is outdated from a technology point of view to tax television ownership, which is what the television licence fee does. Many people, including the Minister, watch television on a laptop computer screen, which is not considered a television under the new legislation. It is only a matter of time before many people start to watch television on their mobile phones. The idea of funding public service broadcasting by licensing television ownership when it is very difficult even to define what a television is anymore never mind having armies of people knocking on doors searching for televisions to see whether they have licences attached to them is just madness. There are many more efficient ways of collecting it, including collecting it by linking it to an electricity bill or a household levy. The bottom line is that up to 20% of people, if not more, do not pay the licence fee. That is not fair on the people who do, who are paying too much. We need to review with this year-on-year financing of the television licence fee collection programme through An Post. That is not a reflection on An Post. In fairness it is doing a reasonably good job considering what it is being asked to do. Searching for televisions and licences is just madness. Perhaps we can talk about that matter again later.

Problems are continuing with the roll-out of DTT. Is the Minister considering making increased funds available for the roll-out of the infrastructure that can allow that to happen? Unless I am missing something it is clear that RTE will certainly not get a revenue stream from commercial DTT this year.

On the energy side I congratulate the Minister on making progress in some of the energy initiatives, particularly on insulation, including the warmer homes scheme and the home insulation scheme. He has clearly fought for that money and got it. That can be not only an energy positive initiative in terms of energy conservation but it should employ many people in the area of upgrading the considerable housing stock that needs to be upgraded. Certainly more than 1 million houses need to be upgraded to provide energy efficiency and insulation. I express a word of caution. A number of people have told me that they would find it cheaper to negotiate with somebody to put insulation into their walls and ceilings privately rather than using SEI certified providers of that service because of the deals builders are willing to do at the moment to address their cash flow and so on. While it is not a black market, a large number of people offering wall and ceiling insulation services are outside the BER certification system. We need to ensure that the people who are certified are providing value for money in what they are doing. Otherwise people will simply do nixers and households will pay cash for pumping insulation materials into wall cavities, which defeats the whole purpose in terms of imposing standards and monitoring. It is very much an issue with which SEI must grapple and on which the Minister must provide leadership.

The greener homes scheme is clearly being somewhat downgraded and the amount of money available to it has been significantly reduced. While there is an increase in the money available for the home insulation scheme, it would be useful if the Minister could explain the reasoning behind it. The Department is doing a good job in terms of insulation programmes, which should be recognised. It is not easy to fight for the budgetary increases the Minister seeks.

I wish to ensure that we get value for money in terms of delivery, rather than setting up a good system in theory but actually over-paying the companies carrying out the insulation work. I apologise for deliberating on the matter but the Department of Education and Science is also trying to make progress in terms of insulation in schools. I met a supplier of a new insulation system two days ago while canvassing. The system involves blowing insulation above ceilings. The Department told him it would only accept a solution which involves rolling out insulation, which is approximately one third more expensive, yet the results for both are exactly the same. Such efficiency, costing and value for money issues exist. In fairness to SEI, perhaps it cannot ensure such value for money delivery. However, we must ensure some structure is in place through the Department to ensure there is value for money in addition to putting in place the necessary insulation. We will return to that matter later.

My understanding is that much of the expenditure at present is subject to the approval of the Department of Finance. The greener homes scheme was already put on hold for at least six weeks this year because the Department of Finance refused to sanction the allocation of grants. What is happening here? How can there be a six week halt in the programme because the Department of Finance is basically refusing to sanction money which is supposed to be allocated to the Department? I seek an assurance that this will not recur in the remainder of the year as budgets become even tighter for the various schemes in this area. If there were such a recurrence it would interrupt the supply of funds to companies banking on the schemes and people could be put out of business quickly. The Minister should discuss this with the Department of Finance and ensure there is not stalling for six or eight week periods while the Department of Finance goes through the bureaucracy of sanctioning the very large amounts of money made available in some of the schemes.

I seek an update on progress with the legislation on restructuring of the management of inland fisheries, whether it will be in place by the end of the year and any budgetary consequences. I will revert in terms of the more specific details which apply.

I refer to the ocean energy programme and I intend to compare what was promised to what was delivered.

I refer to the cost of administration generally, running the Department and its role of leading by example. What has the Department delivered within its buildings in terms of energy efficiency? What percentage of the energy budget in terms of electricity, water heating and so on comes from renewable energy generation? What is being done to ensure that we are leading by example in terms of the energy efficiency of this building and the Dáil? The PR strategy of many companies is to lead by example in terms of becoming carbon neutral and so on. Is the Department doing the same? When I asked this question this time last year, that was not happening. I hope we can have a constructive discussion today, rather than an overly political one. We are not being watched too intently today. I will raise my more specific concerns as we go through the subheads.

Deputy Liz McManus

I welcome the Minister and the Minister of State and thank the Minister for his presentation. I have an issue with regard to the comparative nature of the Estimates. When we are presented with figures, they largely compare the outturn of one year with the estimated cost for the following year. This means the Minister can play around with the figures and spin the story to some extent. If money is allocated and estimated under a particular heading and if the outturn is low, the Minister can then claim he is spending something like 12% more. However, he is not spending 12% more than the estimated figure. All it means is that he has not managed to spend the estimated money during the year. It is important to try, as far as practicable, to compare like with like.

There is a need for smart administration. We all hear about the "smart economy" and that is considered a kind of sexy term and everybody uses it, particularly at election time. However, smart administration does not just relate to what happens in the Department. I have concerns about this. If, for example, we look at the area of responsibility of this Minister — communications and energy — we see that both are highly regulated and have established regulators. Therefore, I question whether, from the efficiency point of view, the Department should set up yet another regulator in the broadcasting area, when there is really only need for one regulator who could encompass the various roles.

We have a situation now in the fisheries area. We are going to have a centralised body, but as far as one can gather — it is difficult to get clarity on this — none of the existing staff will be made redundant and none of the offices will close. We will just have a further office in Dublin. It seems there are issues and areas we should probe in these Estimates about the nature of administration, right across the brief. We should not just concentrate on the Department itself because that is not where the issue arises, but in terms of administration in the various areas.

Another point concerns research investment. One of the messages coming across to us clearly when we are out canvassing is that people are extremely concerned about both job retention and job creation. The Minister often talks about green energy jobs. He is right to promote those and I support him on that. However, there is a danger that the reality does not match up to the rhetoric. We hear a great deal of talk, but if one measures results accurately and forensically, the return does not happen in the way we would like to see. We all understand there is a time lag when talking about new technologies. Everybody understands that.

I would like to know exactly what the Minister does in terms of research money that goes into developing new energy areas. What does he do to incentivise good practice and ensure research projects give an actual return as opposed to investing in areas that he just likes the idea of? How are results measured? Does he conduct checks to see if something is viable in the market, will produce jobs and will actually work? The third level institutes that are involved in research have a pivotal role in this regard. How is their performance measured? Is the research being driven by academic interest or is it being driven in terms of the return to society? I am not saying academia is not valuable. However, we must be much more rigorous in terms of what we are setting out to do as we develop new technology, rather than groping in the dark and hoping some things will work. We must reward good practice. We must encourage good practice and effective research as far as we can. What is the Minister doing in that regard? The speeches are all spot-on and very correct, but I have a nagging worry that this is not being governed in a way that will give us the return we need.

I am particularly concerned about DTT not only because it affects my constituency and the east coast and border counties but because it is a major blow that a deal was not finalised. Why was it not finalised and signed off? Why is there such a delay now? We have lost serious ground. This is not just about DTT, it is about digital Ireland. That is a very serious concern. We need to have a much clearer idea of where we are going, how we are going to reach the destination, and the timeline involved in the project.

I understand the Broadcasting Bill will be debated again on 11 June. We have been working our way through this Bill. I give credit to the Minister because he has listened and taken on board some of the points we have made. I welcome that because far too often Ministers keep their ears shut and no matter what we say they really do not care. They just want to be out of the Chamber as quickly as they can and go through legislation in a formulaic way. This Minister has not adopted that approach and it is to his credit. However, I understand there is a possibility of a guillotine being applied to the Broadcasting Bill. I ask the Minister to advise us that is not his intention because some very important amendments will arise. We have debated them already, but I ask him to guarantee, or at least state, that it is not intended to guillotine the debate on the Bill.

The whole issue of broadband is still very problematic. The Minister is putting money in and it is hoped the rural broadband scheme will succeed. However, it alone will not answer the problems. We have had presentation after presentation, from ALTO, from the trade unions, Irish Rural Link and various other quarters. We are told stories of how this thing is not uniform, how there is not good quality across the country and that it is not ensuring that communities, regardless of where they are in existence, are able to access good quality and fast broadband. This issue has been raised with the Minister previously. However, recently, because all roads seem to lead back to Eircom, the Minister was asked in the Dáil about his attitude towards Eircom and he was rather coy in answering. He was not saying "Yes" or "No" with regard to State involvement in Eircom. Soon afterwards he addressed the telecommunications industry and stated there would not be State involvement in Eircom. Not only is that short-sighted, it is not the approach that is required. What we need more than anything is a forum for serious discussion and scrutiny of how we will deal with Eircom. Nobody appreciates the difficulties more than I. I appreciate the cost involved. I appreciate that we cannot roll back on the pretty disastrous history. We are where we are. To state simply that there will not be State involvement is not the answer. That is not adequate to the task. What we need is a well structured forum taking in the different key players looking at the current situation regarding Eircom and hammering out some kind of realistic investment. There is no way out of that. We need some kind of plan relatively quickly. The Government is focused on providing the necessary investment and managerial skills to solve the problems with the banks and a similar focus needs to be put on Eircom. Every Forfás report highlights the difficulties we have in regard to competitiveness.

Some 54 people were imprisoned last year, at an average cost of €2,000 per week, for not having a television licence. We cannot go on like that. Every day there are television advertisements telling us that inspectors visit 18,000 houses per month but nobody believes that. Television licences are the basis for public service broadcasting. We know that the shrinkage in payments has arisen because people are not coming into the country as they used to and many are leaving. We also have to find a new way of collecting the money because the issuance of a licence by An Post is almost quaint. It does not meet the needs of today. The Minister knows it, I know it and Deputy Coveney knows it so let us come up with a solution. I hope in the next 12 months the Department will deal with this issue.

I echo Deputy Coveney's remarks in welcoming the insulation scheme. I hope it does not turn out to be too bureaucratic but I wish the Minister well in implementing it because it is very necessary. We need to look again at the warmer homes scheme, however, because the people who operate it are screaming for more money to enable them to keep up with demand. They received more money at one point but all it did was deal with the applications of those who had been on a long waiting list. That is disturbing because we are talking about vulnerable people, old people who are living in substandard conditions.

The Minister's colleague, the Minister for the Environment, Heritage and Local Government, Deputy Gormley, has turned off the tap on disabled persons' grants, so they are being denied walk-in showers, indoor toilets and other things to which they had been entitled. Some of the cases I have encountered in my clinics are horrendous and I have never seen anything like it in 18 years in this House. It is not the problem of the Minister for Communications, Energy and Natural Resources but the warmer homes scheme is his responsibility. The money being put into that scheme is not dealing with the demand. In addition, the service is only offered in some parts of the country so I ask the Minister to carry out a full analysis of demand and investment so that more funding can be channelled into the scheme.

The Green Party says climate change legislation is a key issue for its renegotiation of the Government programme. As somebody who launched climate change legislation on behalf of the Labour Party I welcome that approach. However, what impact does the Minister think the legislation will have? What are its structural implications?

Chairman

We will move on to discuss the subheads, which have been grouped together. The first group comprises subheads A1 to A9. I ask the Minister to comment briefly before I invite questions.

Deputy Eamon Ryan

I was going to respond to the questions but I will refer to them as I go through the subheads. On subhead A1, the administrative Vote, there has been a 5% saving on the current side at a time when our responsibilities have expanded. That is a very proper and important response from the system to the difficulties in its budget. The key improvements have been made in areas where we can make changes, such as in incidental expenses. Deputy Coveney asked about energy consumption in the Department. The energy consumption year on year decreased by 10.2% and that was a decrease from 1.64 million kW to 1.472 million kW. Electricity consumption went down 8.8%. We have a contract with Energia for the Dublin offices and with the ESB in the Cavan office. Gas consumption decreased by 12.4%. That is the target for the level of achievement we want to be seen to be delivering. If every business in every section of the State achieved a 10% cut in its budget that would deliver very significant savings. An issue to flag — this brings us back to some of the issues raised——

Deputy Simon Coveney

Are the renewable energy providers such as Airtricity or anyone else who is providing through renewable resources being given preferential treatment when tendering for Government contracts?

Deputy Eamon Ryan

I would imagine it is a competitive bidding process, as is the market to supply the large users of electricity. We enter into contracts with a range of companies. The other development occurring, and I want to see it occurring in this area, is energy supply companies giving advice on savings.

I will move on to the other point on the consultancy budget, because that is the area where the Department will have the greatest difficulty in terms of the contraction of the current budget. This relates to the wider question posed by Deputy McManus on the regulatory system. One of the changes that must come as we operate in a tighter budgetary period is closer co-operation between regulatory bodies, agencies and the Department so that——

Deputy Liz McManus

Just have one regulator.

Deputy Eamon Ryan

I do not agree with one regulator.

Deputy Liz McManus

We know that the Minister does not agree with one regulator. That is why it is silly.

Deputy Eamon Ryan

I have been reflecting further, on one specific issue that Deputy McManus raised on the regulatory side, the need for a separate content regulator versus a network regulator in the communication area. On further reflection and listening to the telecommunications companies cheering for a single regulator, the view of Deputy McManus, that actually spoke to me of a real concern and a real benefit in having a separate content side. It is a different business. The content regulation is intrinsically different from what telecommunications regulation is. One is far more significant. One would have greater economic power and would like to have that power on the content side, but I strongly believe it should be separated out. I am diverting but I want to flag the point that where we are likely to have a tight difficulty in our budget is around the consultancy side, because the areas for which we are responsible are highly technical and require real specialist knowledge. We will be pushed to the pin of our collar to get, as we often need, very complex legal technical advice on exploration and in other areas. One cannot always get the resources in-house. One of the ways we can manage that as I said is by co-operation with our own regulators to get some of the technical or expert advice we need into particular areas. One of the areas where we have been able to save and make improvements in the difficult budgetary period is in our IT area, an area where we have tightened up to get efficiencies. In general the 5% reduction in the present times was an appropriate response.

Deputy Liz McManus

For clarity, the Minister is the only person who holds the view that we need two regulators. The idea that I am somehow in the pocket of the telecommunications industry is off the wall.

Deputy Eamon Ryan

I did not say ——

Deputy Liz McManus

That is the implication. Let us get real. If one asks RTE or anybody else involved in the industry, whether in the public or private sector, it or they will support my view. The Minister is like a rabbit caught in headlights; he just cannot change, but something will give. There will be a report from an bord snip or the Taoiseach will say there will have to be an end to this madness to let us have a cleaner, leaner government, which is what the Minister is always talking about. However, he is acting in the completely opposite way. I will not labour the point because I have done so many times before and I am sure the Minister is fed up listening to me.

I note the number of staff in the Department has reduced by almost 50 since 2007 and I am sure there was pressure on the Minister to do this. In what areas were staff lost? There was an internal memo stating four members of staff would be required to put in place and monitor the national broadband scheme. I seek reassurance, allowing for technical difficulties, that the scheme will be developed as speedily as possible.

Deputy Simon Coveney

The only reason there is a net reduction is there is a reduction in the figure for consultancy services in the Estimates. There are small reductions in the figures for equipment, stores and maintenance.

My first question is about salaries, wages and allowances. Costs for the office of the Minister, the office of the Minister of State and administrative staff come to €12.7 million. How many private secretaries does the Minister have and what is the cost of same? Given that there are 50 fewer staff in the Department, why has the amount included for salaries increased? What is the average salary in the Department and is there a pay freeze in operation? What is the policy on the payment of increments and bonuses? These are thorny questions but let us put them on the table because there is a need to ensure that at every level of government we are achieving value for money in the context of the budgets available to us.

On issues such as travel expenses, I am not one of the politicians who believe no Minister should ever travel abroad or that everyone should fly with Ryanair. In terms of home travel, we are talking about a sum of more than €400,000. Is that the travel expenditure figure for the Department and is it likely to be affected by the decentralisation programme? Why has the amount for travel and subsistence increased?

Deputy Mattie McGrath took the Chair.

Deputy Simon Coveney

Given the size of the budget for advertising, public relations, official entertainment, conferences and exhibitions, it is clear the Department spends quite an amount of amount on PR, some of which is necessary to try change the mindset in the energy sector. What is meant by "office maintenance"? Does it mean physical maintenance such as painting or hoovering? Are we spending €750,000 on this work every year? I am not trying to be smart but it is a high figure and I want to have an idea of what is meant by "office maintenance".

My main question is to do with consultancy. This Department has spent almost €4 million between 2008 and this year on consultancy. How does this compare with other Departments in terms of their spending because I suspect it is a lot higher? I am concerned that we are spending a lot on getting detailed advice and not spending so much on delivery. For example, how much was spent on the forum on next generation broadband delivery held last year? What has been delivered as a result, apart from one report in the middle of last summer, the targets of which have not been delivered on, with the exception of the national broadband scheme? I would be concerned about how much money is being spent on consultancy services. It is not the case that everything is fine if it is less this year than last year. Every year is different. A budgeting process should be about deciding what the priorities are and then establishing how much it costs to deliver them, as opposed to comparing what was spent last year and this year. We are spending €1.6 million on consultancy services this year and this is a substantial sum of money. I wonder whether we are questioning this figure in as detailed a manner as we should be.

We are spending money in the communications and broadcasting divisions to a total of €393,000, with an annual review of the licence fee and an audit of the An Post licence fee collection system, which we all accept is totally outdated. In the energy division, over €100,000 has been expended on the all-Ireland grid study. With regard to the consultancy services, what are the new strategic areas we are examining which are providing value for money? The consultancy outlined here is basically assessments of what we are already doing, as opposed to anything new.

In the natural resources division, a total of €677,000 was spent on the Corrib petroleum engineering support, geophysical support, expenses relating to technical advisory group, groundwater programme support and the minerals development Bill. I accept we are spending less on consultancy services this year compared with last year but that is not the whole story. The issue is value for money in strategic areas where we should be moving forward. I would like to see significant amounts of money being spent on an aggressive roll-out of an electric car infrastructure. Is this a matter for this Department or is it a matter for the Department of Transport? It is clearly linked to energy and the ESB, yet I do not see any consultancy services in that area and why is this? I thought that was a big strategic direction for this Department to take yet there is no mention of consultancy services for this area which are necessary because the Department does not have the necessary expertise. I ask the Minister to comment.

Deputy M. J. Nolan took the Chair.

Deputy Eamon Ryan

I will deal with as many of the Deputy's points as possible.

On the question about the reduction of 50 jobs, many of those would have come about because of the move of fisheries to Clonakilty and the savings would already have been in the 2008 figures, so this is the reason there is not a dramatic reduction. However, there have also been significant reductions in corporate services rather than in the front-line services for energy and natural resources and communications. We are trying to maximise our resources because these are very complex and fast-moving technological areas.

With regard to the costs of the offices of the Minister and Minister of State, I have one private secretary. Given the amount of work that level of staffing is as tight as it could be.

Deputy Liz McManus

How many staff are in the Minister's constituency office?

Deputy Eamon Ryan

I have one person who was previously in my Dáil office and one and a half equivalent in the constituency office.

Deputy Liz McManus

In the Minister's Department.

Deputy Eamon Ryan

In my Department.

Deputy Liz McManus

And the Minister of State, Deputy Lenihan.

Deputy Conor Lenihan

I have one private secretary and that is it. My primary staffing and office load come in the science, technology and innovation part of my portfolio, where most of the budget is. That is based in the Department of Enterprise, Trade and Employment.

Deputy Eamon Ryan

With regard to putting in front-line services, we should not underestimate the scale of the national broadband scheme, NBS. It was a huge project. The UK Government is now looking to see if it can do something like it and the US Government is trying to put a system in place to take broadband to non-covered areas. The proof of the pudding is in the eating. We got the contract signed and the deal, which was massively complex, done. It was completed a few months later than planned but it was completed last year.

Deputy Simon Coveney

The proof will be in the delivery.

Deputy Eamon Ryan

It has been delivered. It is up and running.

Deputy Simon Coveney

I know it is up and running but it is not delivered yet.

Deputy Eamon Ryan

It is. It is rolling out. We will meet the target of 15% of electoral districts next month. I am told the quality is very high and meets all the technical specifications people sought. I commend the people in the Department who were involved in the project. They worked night and day coming up to Christmas. The schedule was tight but they completed the project in the timeframe. They worked round the clock to get the work done. It is an indication of the quality of the work we do. We had the right people and resources. We placed a great responsibility on them and they went out and did it.

Deputy Simon Coveney

What is the average wage within the Department?

Deputy Eamon Ryan

I will have to come back to the Deputy with that figure. One can divide €12 million by 300.

Deputy Simon Coveney

I do not want to labour this point.

Deputy Eamon Ryan

No, it is a fair question.

Deputy Simon Coveney

What is the policy on bonuses, increments, salary increases and so on? I presume it is the same across all Departments.

Deputy Eamon Ryan

We have a large number of technical people. That would skew our salary levels compared with other Departments. We have people in the exploration area who have come from the oil industry, for example, and have real technical expertise. Because of the current budgetary difficulties, no bonuses are being paid. Other arrangements are in keeping with Civil Service agreements. Increments and so on follow the public service negotiated position.

Travel costs are broken down between home, EU-related and foreign travel. Most home travel expenses relate to the Geological Survey of Ireland, GSI. People working on that do water measurement and testing and drilling around the country. That involves a good deal of travel. Some travel costs are related to the decentralised office in Cavan but the GSI accounts for the bulk of them.

The development of the office in Cavan accounts for much of the €750,000 spent on office maintenance. However, this spending is down by approximately €500,000 on last year. We need to make similar savings and tighten our belts in all non-essential areas. That reduction is appropriate. Spending on consultancies is set out.

I agree with Deputy Coveney that the development of a smart grid and electric vehicles are priorities. This is an example of how we work with our agencies. We have set up a group with Sustainable Energy Ireland, the ESB and the regulator in both those areas. Their budgets and expertise are drawn in to develop a strategy. The Department directs overall policy but the projects are delivered in conjunction with the agencies under the Department's remit. That is appropriate because those agencies often have the skills we need for such specialist projects. Close co-operation between agencies, regulators and the Department can sometimes get things done.

Deputy Simon Coveney

Is it not necessary to ensure that there is a level of expertise within the Department that would to a certain extent match the level of expertise in the ESB in this area?

Deputy Eamon Ryan

I agree with the Deputy. One of the changes I would push with Colm McCarthy and the public service review would be for greater crossover between the Department and regulatory agencies so that some of that expertise resides for some period in the Department. It goes both ways. We obviously need to maintain an appropriate distance in areas where there is specific regulatory pricing or where a kind of Chinese wall of independence is needed. Much of the expertise in our regulatory system can and should switch over from the Department and back again. Under the public service review programme in which Colm McCarthy is engaged, I would also argue that a Department like ours needs additional and continuing access to new specialist expertise. I mentioned earlier that our salaries would not be typical compared with other Departments because in, for example, the exploration area we need to have people with the same capabilities as those working for the oil companies. At the same time as they get the feed from any drill head we also get it. We need people with real specialist expertise who can assess the seismic or geological information coming in. Similarly with spectrum policy we need people with real knowledge and expertise because it is highly technical and complex. In this process of change when there is an embargo on recruitment I will argue for us to continue to get specialist staff.

Deputy Liz McManus

I note that the total bill for reviews was €2.2 million. The single biggest expenditure of €710,000 was on one study on the Avoca mine site. As I represent that area I know it very well and I know the people who are struggling to try to ensure that the mining heritage is developed as a tourist amenity. I find it hard to understand how €710,000 could be spent on a feasibility study. If the local people had got their hands on that money they could have done a great job on the tourist development they wish to see. Why should a study that is relatively constrained in geographic terms cost so much?

Deputy Eamon Ryan

It was a major analysis of the entire river system and the mining system there. It involved very detailed water quality assessment.

Deputy Liz McManus

Is the Minister primarily talking about the river?

Deputy Eamon Ryan

The Avoca.

Deputy Liz McManus

The purpose was an assessment of the mine site, but the reality was that the river was also assessed.

Deputy Eamon Ryan

Yes, the mine site affects the water. It will be put to good use. We need to do it to know what is going on there and to have remedial measures.

Deputy Liz McManus

I can assure the Minister of that.

Deputy Eamon Ryan

On the consulting side, a point was mentioned about next generation broadband. I do not have the details with me but I can get them. My recollection is that it was done on a very tight budget. For example we brought international advisers from America, Japan, the UK and Europe. I understand it was done on a voluntary basis. Very experienced international experts were willing to give their time because they have an interest in Irish affairs. Similarly my recollection is that the budget for the Dublin Castle event and the work leading up to it was minimal. It cost approximately €25,000 to set up the entire social networking site and other aspects of that conference. In relative terms it shows that it is possible to do things in a very innovative way without having significant budget expense. I would pick that as an example where we were able to do that. We got good value for money. We have put that to good use in terms of things like the one-stop shop, the schools broadband scheme and a range of different projects coming out of it. That may be a model of using State resources. Dublin Castle is not expensive. Obviously it would be much cheaper than going to a fancy hotel. We will increasingly need to do business that way as we go into tight times.

Chairman

I ask the Minister to give a brief comment on subheads B1 to B4, before inviting members to ask questions.

Deputy Eamon Ryan

The main component of the subhead is the national broadband scheme, the objective of which is to provide broadband services in rural areas. Other key objectives include the roll-out of 100 megabit speed broadband to schools and wireless connectivity within schools, the development of Project Kelvin which, as mentioned, improves our international connectivity and the completion of the fibre optic metropolitan area networks. We will need to go beyond this in terms of the provision of State ducting and new regulations related to fibre optic access to the home.

Deputy Simon Coveney

Is the management contract in place yet with e.net for the MANs phase 2 project? I realise it has been an ongoing process for some time. I understand the Minister's explanation that he seeks value for money and wishes to get it right and so on, but e.net was named as the preferred choice last July and there is still messing with the contract, unless it has been signed in the past week or two. If that was the case, I was unaware of it. I understand it is close to being signed, which is welcome. Frankly, it is mismanagement of a very expensive State capital project to have 57 or 58 metropolitan area networks constructed, finished for more than one year but not lit up, being used and providing revenue for the State. I seek to ensure this will not continue in future.

In terms of the items before us, I am unsure what the figure of €17,000 for MANs phase 2 represents. Then there is the figure of €310,000 for MANs phase 2 project management. Will the Minister explain it? Likewise, there is provision for a sum of €500,000 for broadband in schools and €4 million for another 100 megabit pilot school project. What is the €500,000 for if there is a sum of €4 million to roll out the pilot project? Where are the 75 schools which will receive the 100 megabit broadband service? I expect it would be a very attractive proposition for the schools involved. I do not understand why we are rolling out a pilot project. Clearly, the Minister is limited by the amount he can spend and how quickly he can spend it, but I do not see why there is a need for a pilot project, given the expense involved in assessing it. Schools need 100 megabits of bandwidth; that is not contested, but why are we going through the process of a pilot project which, presumably, will be assessed and require a report? Why go to the expense when, unless I am missing something, we should spend all moneys available for the project on rolling out the service everywhere? It is the same argument with smart meters. I welcome what the Minister is trying to do with schools, but I am impatient to proceed with the roll-out as quickly as possible.

We will judge the national broadband scheme on its performance. I recognise the Department has done a great deal of work and that it is a very difficult structure to put in place. Many in the Department have done a very good job on the scheme. The issue is whether the technology chosen will be able to provide the bandwidth required for delivery of next generation broadband in the coming years, or whether we will require another national broadband scheme for such networks. That is the principal question. If that is the case, it will have been a mistake to go with the technology chosen. If we will not require another scheme, as I hope will be and may well be the case, perhaps between satellite and wireless systems, we will be able to provide the necessary bandwidth at some stage, perhaps through fourth generation services. Naturally, spectrum management will also provide solutions. Perhaps we can talk about the spectrum later.

With regard to MANs phase 2, how many of the rings are up and running? What is the timescale for the whole phase to be up and running? I presume MANs phase 3 is on ice and gather from the Estimates that it will not happen this year.

Project Kelvin is very welcome. I am told there is a similar opportunity off the south coast — off Youghal in my constituency — to link with an international fibre cable approximately 2 km off the coast. So-called experts say we should consider linking with it and I ask the Department to consider this. International connectivity is very important for the IT sector, just as it is in the electricity interconnection field.

Are we dealing with multimedia developments at this stage also?

Chairman

Yes.

Deputy Simon Coveney

The Minister did not say anything about the Digital Hub, but a substantial increase in funding has been allocated. Will he explain this? While I am not pro or anti the Digital Hub, I would like to understand the situation better.

I would like a detailed answer as to what is happening with regard to the introduction of an e-government programme. I tried, when putting a Private Members' motion together on the issue, to get agreement with the Government on the direction we should be taking so as to put in place a proper e-government programme aimed at saving money and providing more immediate and convenient services for the public. While I understand the Minister has direct responsibility, I have not seen any plans in that regard. What is happening in that respect? Are funds being allocated and, if not, why not? Who has responsibility? There was a Cabinet sub-committee on e-government. What has happened to it and who is in charge of it?

Deputy Liz McManus

Deputy Coveney has asked many of the questions I had about MANs and the schools programme. There is a significant drop in funding for the e-inclusion and information society programmes. This seems short-sighted in terms of seeking a good return. An announcement was made in the Budget Statement that the Minister, Deputy Eamon Ryan, would be in charge of the knowledge society strategy for the Government. I presume the figure mentioned in these Estimates refers to this, but it is only €50,000, which amount does not inspire confidence. When the Minister for Finance, Deputy Brian Lenihan, made the announcement, it sounded as if the Government was being progressive and looking at this area positively. However, the Estimates do not reflect that vision. Perhaps the Minister will clarify what this means.

We need to address the issue of e-government. The 2008 report of the Comptroller and Auditor General was devastating in terms of the number of projects abandoned and cost overruns, etc. We have classic examples such as PPARS which gobbled up over €100 million before Professor Drumm called a halt to it. All the indicators are that such mismanagement was down to poor specification. The brief set out in such cases by Departments was not robust enough; as a result, private companies were able to have a great time spending public money. From day one there was not a rigorous approach to securing good deals that could be closely monitored and regulated, which raises issues about competence within Departments. This is no reflection on anybody because I know that when it comes to IT, other countries have had similar problems. We need to address the issue. Cutting back on e-Government now does not make sense. Very often what happens is that a project is undertaken, a limited amount of money is allocated and, through failure to manage properly, cost overruns occur, the beast must be fed and we end up with a report by the Comptroller and Auditor General that is devastating. I have grave concerns about this, quite apart from the digital divide across the country in terms of health, education, schools provision, rural communities and so on, which is part and parcel of the task also. In the health sector we have a very low level of IT use compared to other countries. The rate for GPs is only 45%, which is very low. That is not directly the Minister's responsibility, but it is an indication that we should be concerned about e-government and how society as a whole is enabled to take advantage of information technology.

Deputy Eamon Ryan

Regarding the e-net and metropolitan area networks, MANs phase 2, the contract wording is pretty much agreed and due to be signed shortly.

Deputy Liz McManus

Can the Minister say when?

Deputy Eamon Ryan

June.

Deputy Liz McManus

Great.

Deputy Eamon Ryan

It will not mean all the MANs will be switched on immediately. There is a scheme whereby Magnum Opus has been managing access to them; therefore, it is not the case they have not been accessible. It has been recognised for several years that investment in the MANs was the right long-term investment. However, there is still an issue about how one secures access from the MAN to a house and the backhaul system. In some areas, in small towns in particular where there is not a huge volume of traffic, one will continue to see certain MANs not lit up. However, I still believe it was the right investment because down the line in the telecommunications sector we will need a co-operative competitive approach, which approach will lead to various operators using the MANs — we are starting to see this happen — to have high speed, high bandwidth capabilities into their own platform. Our internal investment will be longer than a typical investment, but it is still the right one. Under the contract to be signed in June I expect approximately eight or nine of the MANs to come into play immediately, probably in the larger towns. It is something we have seen, particularly with the Vodafone investment and the recent announcement that it was doing a deal with e-net, recognising its assessment that broadband speeds and bandwidth needs were expanding so fast that to get its mobile traffic working properly it would work in conjunction with the MANs. It will take time for them all to be lit up, but I still believe it is the right investment.

Within a very short period I expect to announce a list of the 75 schools where we will have 100 megabit connectivity and wireless connectivity next year. Rather than doing 750 schools straightaway, I have no problem with testing as we go, getting it right and ironing out any kinks. It is a good start to do one in ten schools and test as we go along. It is not my intention to then stop for several years and do years of testing. We can continue to look at how we are doing as we roll out to these 75 schools. The job of education takes place in the school. Our key task is to provide access. My instinct is that there should be and will be a variety of responses. Often it will be students who will teach the teachers how to use the technology. I saw a very good project last week, the Bridge to College programme which Trinity College is running in Oriel House, whereby children are brought in to see how these technologies are developed. For €60 the students built a whiteboard by linking a Nintendo Wii console with a laptop linked with a projector. A top of the range whiteboard would typically cost €2,000 or €3,000. This worked just as well and the learning experience was in hooking up the various pieces of equipment. My ten year old can do things on a Wii that I cannot understand. When we have high speed connectivity, students will be able to get under the hood of technology and decide for themselves how they use systems. Teachers will need to be flexible and innovative in order that we can pick up on best practice as we roll it out to other schools. It is a significant start of what will be a crucial investment.

I will explain the figures of €500,000 and €4 million and the carryover of €3.2 million on the schools project. The sum of €500,000 relates to the continuation of those broadband systems currently in primary and secondary schools. There is a new contracting arrangement which will lead to better broadband services across all schools with higher speeds and better value. Every school will have an upgrade of its broadband service. We are immediately selecting 75 schools for much higher speeds, that is, 4 or 5 megabits rather than 1.5. The speeds will vary according to whether a school is isolated.

Deputy Simon Coveney

Who is the contract with? Is it with one provider or a series of providers?

Deputy Eamon Ryan

It has gone out to tender. My preference would be for a series of providers because competitive tendering is more appropriate and certain schools require different solutions on account of where they are located. A limitation of the first scheme was the fact that isolated rural primary schools were connected with a satellite service which was not as fast. The idea in providing a high speed service for secondary schools is that it will improve the general infrastructure across the country and make it easier for a platform provider of 100 megabit connectivity into a school to link it with a local shop or business. It is evolving and will continue to evolve.

I agree with Deputy Coveney that project Kelvin is an important strategic development but it is not the only one. We will look at further international connectivity options and the private market may also be involved. Broadband data use in this country are far ahead of those used in other countries because the major data centres such as the new Microsoft investment project massively increase traffic. We will need to continue to monitor our international connectivity and support additional connectivity where appropriate. If, as Deputy Coveney suggests, it is technically possible to connect to a international fibre optic cable 2 km off the south-east Cork coastline, that would be a very useful development.

I was asked about e-government programmes. In May 2008 the Taoiseach made reference to e-government and the knowledge society and divided the responsibility for each, with responsibility for e-government being given to the Department of Finance and that for the knowledge society to my Department. The IT wing of the Department of Finance is well placed to lead the e-government role as it has done significant work in public service telecommunications procurement. It has secured significantly better deals by looking for competitive tenders.

Deputy Simon Coveney

An e-government strategy was to be launched last July but it disappeared.

Deputy Eamon Ryan

The Private Members' Bill set out the policies on which we agreed but most of them lie within the scope of e-government which is the responsibility of the Department of Finance.

Deputy Simon Coveney

Is the Minister hearing anything on the progress of e-government in the Department of Finance?

Deputy Eamon Ryan

We are working with CMOD and there is a cross-over and connection, but I would have to ask it to come back to me on e-government. A question to the Minister for Finance would set it out. I do not have specific knowledge as to what it is doing. The Department has a budget of €50,000 to cover the publication of the report of the knowledge society. The key work is being done, as I stated earlier, by bringing in outside people. Without a major budget line we have been able to bring in a large number of people from industry and a range of groups interested in digital development in the country. We have engaged in a series of meeting with these parties to develop a series of reports. Mr. Barry McSweeney, director, national knowledge society strategy, has been spearheading that and we are bringing over additional staff from the Department of the Taoiseach to supplement our resources. The responsibility of my Department is to look at the broader application as to how we develop the knowledge society. Government's application and use of the technologies is an issue for the Department of Finance and CMOD to lead.

Deputy Coveney made two points, which I think are important to recognise. My colleague, Deputy Conor Lenihan, as Minister of State, has a key cross-over interest and responsibility in the development of research facilities and I will ask him to comment. However, from my viewpoint in the two areas where we have research capabilities in the National Digital Research Centre and the Digital Hub, a lesson has been learned from our historical investment in research, in that the bodies are very much industry focused. The NDRC is a specialist research body in translational research, in other words, taking the expertise in our universities much closer to commercial application. The 14 or so projects that are up and running are explicitly designed to bring a commercial focus to some of the research that may have been going on in our universities and I think that if even one of those 14 projects leads to a major commercial venture developing then it will be money well spent. Its location in the centre of the Digital Hub is to highlight the fact that it is translational research we need now, research with a real commercial focus, which they are doing.

The real difficulties we have had in the planning permission for the Digital Hub have been publicised and the whole developer slowdown and the difficulty in the building area has not made it easy. What is happening in the Digital Hub and a base on which we want to build, is its success on a commercial basis. In response to Deputy McManus who asked if the green clean technology jobs are real, the jobs in the Digital Hub are real, where there are almost 1,000 people working. There is the expectation of another 250 or so jobs this year and these are real jobs.

Deputy Liz McManus

Are there jobs in the energy area?

Deputy Eamon Ryan

I will not revert to energy. There were some 400 jobs announced the week before last.

Deputy Liz McManus

I am not questioning that. I am very supportive of the Minister's work in this area and I wish him well. What I am concerned about is the way research projects are selected, whether they are scrutinised and what incentives are in place to ensure the research is going in the right direction.

Deputy Eamon Ryan

I agree with the Deputy. I had a similar concern that some of our research spending in previous years may have been focused on the universities and inward focused, rather than commercial in its application. That is a real concern. In fairness everyone recognised that. The board of the NDRC is comprised of parties from the commercial sector and it is pulling it right out of the universities into the commercial environment. I might ask the Minister of State, Deputy Conor Lenihan, who has specific responsibility across three Departments to ensure that research money is well spent.

Deputy Conor Lenihan

The investment in research has been an extraordinary story. Since 1998 we have tripled the level of spend, which is now 1.66% of GDP. There are ongoing debates and reservations about how relevant some of the university-based research has been. In that regard, the work of Science Foundation Ireland and Enterprise Ireland has been highly praised internationally. If one is to guage by the reaction of inward investors who monitor and evaluate how we apply scientific research in our universities and the industrial sector, the response to date has been very good. Some 43% of the inward investment gains made by the IDA last year and 40% the previous year were directly related to research and development. In other words, the inward investment wins being achieved, even in these difficult times, are directlly related to research and development. They are either being made to imbed a research and development presence as part of an existing operation or being made fresh in a new research and development or technology related operation. The proof of the pudding is in the eating. Certainly, Science Foundation Ireland and Enterprise Ireland are building cluster groups and bringing the IT and university sectors much closer to industry. Therefore, many of the grants paid and much of the assistance in terms of enterprise and employment are predicated on the notion that we need to build a more clever form of collaboration between the universities and industry. I am confident that the level of research in Ireland is very good. If it were otherwise and we did not see results, one would see a strong correlation between a reluctance on the part of inward investors to sink money in Ireland or——

Deputy Liz McManus

I am not talking about inward investment.

Deputy Conor Lenihan

The other focus would be on spinning more commercial activity and company start-ups from university-based research. There is a lot of work to be done in that regard. Also, there is a great deal of work to be done in regard to the promotion of PhDs where the aim of the State is to double the number of PhD students. The important point is that we need to improve the quality of the people involved in order that PhD researchers focus on industrial output or, at least, research that leads to revenue generation. Increasingly, there is an emphasis, from the universities' point of view, on training PhD students in business skills because traditionally such students have been remote from the concept of commercialisation and business skills generally. There will be a strong component with the emphasis of the universities on producing PhD students and researchers with business competencies and capabilities.

Deputy Liz McManus

That was a very long answer, but I appreciate it. I am not sure I am more enlightened, but I appreciate the fact that the Minister of State has given me a long and detailed answer.

I am not concerned about inward investment. The Minister of State referred to the energy sector. Given the times in which we are living, we will have to develop our capacity in terms of innovation. In this context, I am primarly concerned about indigenous resources. There are many people unemployed who are highly skilled in engineering and other fields and who, presumably, would like to be involved in creating their own businesses. We are in a changed climate and what I am trying to suggest is a practical approach. If there is a research project in a university or third level institution, it is obviously inspired internally, which is understandable. I just wonder about the actual mechanism involved. When somebody has the money needed, what happens? For example, does Enterprise Ireland have the capacity or intelligence to state there are 15 commercial enterprises or SMEs which could develop a particular idea further? Is there that linkage at an early stage in order that it is clear where the project is headed rather than it being of general interest? I am sure this is happening and, perhaps, I am asking a very obvious question. However, people have raised their concerns with me and that is the reason I am raising the issue. Is that how it works? Does Enterprise Ireland have all the information in order that it can name companies and link them with the research being done in a university within Ireland? Why is the Minister of State talking about inward investment?

Deputy Conor Lenihan

I am not. If I understand the Deputy's question correctly, she was asking how did we know it was working, how did we know our research investment which had tripled since 1998 was working. Part of the proof is the response of inward investors and the pattern and profile of the investments they make. There is evidence that what we are doing in terms of research in our universities is working, although no one is suggesting for one minute that it is perfect.

On the Deputy's question about Enterprise Ireland, I agree that it has a connection. I can provide the Deputy with a briefing because I know she is interested in the matter. There is a specific focus on what Enterprise Ireland terms high potential start-ups where it focuses directly on companies of four to eight people which may be campus-based where it can bring skills to bear on such a company and help it to grow speedily because of its original patent or intellectual property products and services. That is what is happening and it is one of the great success stories in the country. We need more of the same.

I am disappointed to say the Deputy seems to be labouring under the belief we have plenty of engineering skills in the country that can be put to work. One of the biggest problems we have in the smart economy and moving up the proverbial value chain in terms of the take-up of science, maths and technology-related subjects is that we have a very poor record in schools and the output from the universities is not great either. This is a significant systemic problem as we try to leverage more commercial and economic gains from what happens in the universities and try to harness more sophisticated forms of technology in order to make small and medium-sized enterprises more competitive. We are still issuing work permits to Indian professionals and computer technologists from all over the world. The big blockage in the system is that only 16% of our students take higher level maths at second level. That is a very big problem. It is not fashionable to point this out, but many conclude that with so few taking higher level maths, those making up the 16% must be real high performers. However, that is not the reality on an international comparison basis. It is not a particularly pretty picture for a country which is hoping to move up the value chain.

Deputy Simon Coveney

Will there be changes?

Deputy Conor Lenihan

We are introducing project maths through the Department of Education and Science. The Cabinet sub-committee is involved with the economic review of this area. It is obvious more initiatives will be required beyond what is being done in project maths such as with regard to the training of teachers.

Deputy Liz McManus

I wish the Minister of State well.

Deputy Conor Lenihan

I am surprised myself. I did not realise most teachers teaching maths are not particularly well qualified to do so. That is a big problem in terms of quality.

Deputy Simon Coveney

We could have a detailed discussion on that last comment.

I asked a question about the information and communications technology programme, in respect of which there has been a 22% reduction in the Revised Estimates figures. I am trying to match this with the subhead under discussion. I also asked a question about the €15.5 million unspent last year which is being carried over into this year. For what was it supposed to have been used last year? Was it always the plan to carry it over to this year? If so, why was it sanctioned for use last year? The impression is being given that there is a decrease of €2.9 million in expenditure but the accounting figures show a much bigger decrease. I am trying to understand this. Is it the deferred surrender figures about which we are talking such as that for MANs phase two of €3.4 million? Is that the figure which makes up the difference? There is an assumption that the budget for communications is not actually down when it is. Either the Minister is using last year's unspent figure to prop up this year's figure and make it look better or I am missing something? I would like an explanation.

Second, the Minister has given a commitment to do an audit of all State owned IT infrastructure in order that we will know what the State owns, where we stand, what elements of the infrastructure we need to bridge together and so on. Has this been done, or is there an Estimate for the work involved? The Minister also suggested there would be open access to all State owned ducting for all providers. This would apply to ducting owned by the NRA, for example. Several commitments which were made which are not reflected in the Estimates. That may be because they are not costing anything or because the work has already been done. However, some Department must take charge of the audit of State owned infrastructure. State companies own substantial amounts of broadband infrastructure and we have the metropolitan area networks. We need to pull all of this together. We were given an assurance that this was happening within the Department and I would like to know if we are there yet. When we move on from the question of communications, we will not have an opportunity to raise the matter again.

I echo Deputy McManus's concerns about Eircom. Is the Department looking at how the State can be involved in ensuring Eircom has a viable future in the interests of the State, not of some venture capitalist? We will miss an enormous opportunity if we allow the company to be sold again for short-term profit, only to have it back on the market in two or three years' time with increased debt and pension deficit problems. The recent savings made by agreement between management and workers in Eircom were welcome, but this does not solve the company's fundamental problems, as everyone recognises. A fourth venture capitalist has shown interest in purchasing Eircom. We must learn lessons from what has happened. Another change of ownership would be the fifth in ten years. In general, I am not a big fan of renationalisation. However, Eircom is part of the strategic infrastructure which needs to be linked with State owned infrastructure. This issue cannot be ignored. I do not think the Minister is ignoring it, but he is not telling us what he is doing about it. It would be helpful if he did.

Deputy Eamon Ryan

I will answer those three points. The fundamental change is the reduction in spending on the metropolitan area networks, MANs, programme. It was a significant capital budget programme with a major budget each year and will be replaced by investment in schools broadband, Project Kelvin, the one stop shop and so on. There is no reduction in priority. If anything, it has an even greater priority. However, the reduction in that very large capital programme is the main reason the figure is down from the previous year.

The audit of State-owned IT infrastructure will be done. Much of the work is in the pipeline and about to be released. This will be included in a paper on the outcome of our next generation broadband policy process. It will include maps showing where the various ducting is located. The minutest detail will not be shown in the paper but the audit is being done.

Deputy Simon Coveney

Last summer the Minister launched a paper on next generation broadband. It included ten action points, one of which was the undertaking of an audit.

Deputy Eamon Ryan

That is right. That is done. Some of the findings of the audit, including the map showing where the ducting is located, will be included in the final paper.

Last Friday, in a speech I made on Eircom, I indicated that we had a significant interest in the future of the company which holds a crucial piece of infrastructure. We will not facilitate another short-term investor coming in to turn over this asset and make a quick return which is not investment focused, as happened in recent years. We will work with any investor looking to work in the long term in a collaborative way that we believe will make sense and make an investment, particularly in the next generation access network.

Deputy Simon Coveney

The Minister does not determine if it is a private interest.

Deputy Eamon Ryan

No, I do not.

Deputy Simon Coveney

The Minister cannot choose the venture capitalists.

Deputy Eamon Ryan

It is possible to work on a collaborative basis. We should also ensure our regulatory system works on a collaborative basis to support such an investment. That is an important component of the many changes that need to be made. We need management of the debt and cost base. I commend the work done by the management of the company with the unions in tackling this in a real way. We need a supportive and progressive regulatory system. I am saying that component is in place for a company which will be focused on the next generation access network, which is what we need as the crucial next investment. I do not believe there is a business strategy for the company that works without that kind of investment. I do not believe such a company can rely on continuing returns from fixed-line voice business. Clearly, the future will be in the provision of higher bandwidth services not just for its retail business but also its wholesale operation.

Deputy McManus may well be of the view that the State should own the company. If we consider international best practice, where have the speeds increased at the greatest rate and where have prices reduced quickest? It has happened in those countries where there is real competition between the cable company and the fixed-line operator. Holland, Denmark and Britain have tended to have the fastest speeds. We are still taking the right path in not going back to the old days of the State-owned and controlled Department of Post and Telegraphs. We are driving competition between the cable company and a fixed-line company, in addition to satellite, fixed wireless, mobile LTE and a range of other services. That competition drives speeds up and prices down. That is what I will drive.

Deputy Liz McManus

It is Fine Gael which proposes nationalisation of Eircom and I know my leader has made the same argument. I have a slightly different view. There are other options. To be fair to Fine Gael, no one is arguing in favour of going back to the old days of the Department of Posts and Telegraphs. Let us bury that argument because the Minister is inclined to bring it up. It is a red herring. We need to work out a strategic approach with State involvement. There will need to be a partnership with a serious contender in the telecommunications industry, presumably somewhere in Europe. We will need to do much more than say, "We will just sit back and if some good operator comes forward, sure we might talk to them." That will not happen. It certainly has not happened up to now. What has happened is that the sharks have converged and stripped assets. An enormous debt is ensuing and Ireland is lagging behind other countries at a crucial time in our economic survival. With all due respect to the Minister, it is simply not good enough to say it would be very nice if a good operator came along. Nobody disagrees with him that it would be very nice, but he will need to make it happen. The way to do it is to develop a strategic approach and start to put out feelers to see what is possible. The Minister needs to do this in such a way that agreement can be reached. That is what is sought of him. I am not reassured that what he has said shows adequate knowledge of the political issues involved.

Deputy Eamon Ryan

I was in opposition at the time when both Fine Gael and the Labour Party welcomed the arrival of Babcock & Brown as a positive development. That was not a position we took at the time.

Deputy Liz McManus

That is a really helpful remark.

Deputy Eamon Ryan

It happens to be true.

Deputy Conor Lenihan

It is a reminder of the Deputy's past.

Deputy Liz McManus

That is the problem. The Minister is not looking at today's challenge.

Deputy Eamon Ryan

Far from it. I am spending——

Deputy Liz McManus

That is a silly cheap shot.

Deputy Eamon Ryan

It is not a cheap shot. The Deputy brought up the matter.

Deputy Liz McManus

I did not. I was discussing the current situation and political perspectives.

Deputy Eamon Ryan

The political perspective on this matter is that ownership is up for consideration. We do not have control of that because Babcock & Brown have that shareholding. We are talking to everyone and anyone to try to influence matters in the direction of the public interest. We are talking to Babcock & Brown and we are talking to ESAT.

Deputy Simon Coveney

We are talking about a 25 year to 30 year return. The State is the only body which can do that.

Deputy Eamon Ryan

Is Fine Gael's view that we should nationalise it?

Deputy Simon Coveney

No, Fine Gael's view is that the State should own the infrastructure and we are examining ways in which that can be structured. It is not simply a case of nationalising Eircom. It would have been helpful if the Minister had examined our proposals.

Deputy Eamon Ryan

I did.

Deputy Liz McManus

There is no forum for debate.

Deputy Simon Coveney

The Minister dismissed them out of hand during a recent Private Members' motion. He did not even read the document.

Deputy Eamon Ryan

I read the document but I disagreed with the approach, in the same way as I did not agree with the approach three years ago when Fine Gael approved of Babcock & Brown coming in. That is not ancient history, it is recent history.

Deputy Simon Coveney

The Minister is in charge now.

Deputy Eamon Ryan

Yes, and I am following the policy approach of using a competitive and collaborative model. It involves using State ducting, the MANs and the regulatory system to encourage collaboration between operators and to have a more open access system because that approach will work most successfully. It comes on the back of two years of the fastest growth in broadband in the country which brought us right back up the international table.

Deputy Simon Coveney

If we cannot get it into people's houses and businesses the Minister is wasting his time. Eircom has the infrastructure.

Deputy Eamon Ryan

I recognise that the crucial investment now is in the access networks in Eircom, in the cable company and in the mobile companies. This is a competitive model between them and a collaborative model at the same time, where they move from one network to another. The customer does not mind which access system he or she uses. What he or she wants is faster speeds at a cheaper price. The policy approach I am taking will achieve that in the quickest and best way.

Chairman

We will move on. Everyone seems to have got everything off his or her chest in that area.

Deputy Simon Coveney

We have no bandwidth. That is the Minister's record.

Deputy Eamon Ryan

The record is that it has doubled in the past one and a half years. I will stick with that.

Deputy Simon Coveney

In mobile broadband. The Minister should examine the OECD figures; at least they are neutral.

Chairman

Can we move on? We are to consider subheads C1 to C6. I call on the Minister to comment briefly.

Deputy Eamon Ryan

I am conscious of time. I refer to the DTT issue because it was raised several times by Deputies Coveney and McManus. It is crucial because it is fixed that the analogue system will be switched off by the 2012 deadline. We need the spectrum to provide a competitive broadband market and it will be a crucial part of the development of broadband services. I am confident that it will be possible for the commercial platform three muxes to be delivered in tandem with our free-to-air public DTT services. It is unfortunate that the commercial operator which had the contract arrangements in place did not pursue the matter. Alternative commercial arrangements will work which is a crucial development and which will facilitate RTE, which has already invested in the network development, such that we will be able to switch on DTT.

Deputy Simon Coveney

It made an investment of €40 million. There is a further €60 million to spend.

Deputy Eamon Ryan

That is a significant investment and it allows us to start to switch on along the east coast as soon as the commercial contracts are in place. That will be possible and it is something I will pursue.

Deputy Liz McManus

When does the Minister expect the contract to be signed?

Deputy Eamon Ryan

I would like to see the contract signed within a matter of months.

Deputy Liz McManus

When does the Minister expect it to be signed?

Deputy Eamon Ryan

That is a matter where the BCI and the commercial operators in question must sit down and work together. However, I believe their timetable is similar because it suits everyone's purpose to do this quickly. I hope the contract negotiations which have started in recent weeks can be concluded within a few months. I cannot give a specific date because we are not involved in the contract negotiations. However, we have met all parties and stated to them that we believe it is in the public interest that they should go ahead as soon as possible.

Deputy Simon Coveney

Is the Minister stating that he is satisfied that the One Vision consortium will pursue a commercial licence with the regulator for DTT?

Deputy Eamon Ryan

It has entered into negotiations with the BCI on that basis but did not have to do so. I presume that reveals certain intent.

Deputy Simon Coveney

I presume someone from the Department has spoken to it or to the regulator about the likelihood of this taking place. The problem with the Boxer consortium was that everyone assumed that everything was fine. Everybody assumed the contracts had been signed and that they were working on the implementation, until we realised the contracts had not been signed at all.

Deputy Eamon Ryan

I did not presume that. We knew the contract negotiations had to be progressed and we were very unhappy when early this year ——

Deputy Simon Coveney

At the launch the impression was given the DTT services would be launched early in the new year. However, the contract had not even been signed at that stage.

Deputy Eamon Ryan

That is right and that was deeply disappointing.

Deputy Simon Coveney

It is difficult not to be somewhat sceptical when we consider the companies involved and their access to capital. We are talking about Eircom, Setanta, TV3 and Arqiva. It is public knowledge that these are companies that are under significant financial pressure. The DTT service we need rolled out commercially involves a significant capital outlay. Therefore, we are right to be sceptical when companies that do not have the capacity to raise large amounts of money are in discussion with the regulator. In the meantime, RTE is expected to continue to spend huge sums of money rolling out infrastructure that was to be built on the basis of getting a revenue stream from a commercial operator that would also use that infrastructure. There are significant financial problems in RTE as a result of that.

Deputy Eamon Ryan

One thing RTE knows is that, come what may the analogue system will switch off. Therefore, its investment will work.

Deputy Simon Coveney

I agree with that. We need the spectrum for other things.

Deputy Eamon Ryan

I will not go into detail on the companies, although I have met Arqiva, Eircom and others. We must be careful. Eircom is a company that still generates €700 million in profits, which provides a base within which capital investments can be made. Arqiva is a large international company with expertise in this business in the UK and is coming here with a real intent. I do not want to speculate on the position of any particular company, but I know and can see real strategic reasons for all parties to the contract negotiations starting now to sign off on them. I will do whatever I can to assist and ensure those contracts are signed and that the public gets the DTT service quickly.

Deputy Liz McManus

I raised the issue of the Broadcasting Bill. Will the Minister give an undertaking there will not be a guillotine on it?

Deputy Eamon Ryan

I have no interest in a guillotine, but there is a timeline. I understand the difficulty is that there has been so much financial emergency legislation going through the Dáil. We have been ready to go and have been waiting for some time. I will talk to the Chief Whip. I would prefer to give it as much time as we can. We must get it through before the summer recess.

Deputy Liz McManus

I understand that the Dáil will be recalled for the NAMA legislation.

Deputy Eamon Ryan

RTE and the Broadcasting Commission of Ireland have an even tighter deadline.

Deputy Liz McManus

What is the deadline?

Deputy Eamon Ryan

There is a timeline in terms of the six-month extension I gave the board, but I would have to check out whether it was necessary to reappoint a different board. There is a timeline for getting it up, established and working this year. It takes a fair amount of time.

Deputy Liz McManus

The Minister could always apply the same rule as he applied to the regional fisheries boards, now on their fifth year.

Deputy Eamon Ryan

There is also a budgetary funding issue. We expect a certain amount of the payments to come from levies rather than from the Exchequer and that requires the establishment of the authority.

Chairman

We will move on to subheads D1 to D5. I call on the Minister to comment briefly.

Deputy Simon Coveney

Just before we move on, we commented on the cost of collecting television licence fees. I notice the cost of collecting licence fee money has increased again; it now costs more than €13 million to collect licence fees.

Deputy Eamon Ryan

We are trying to get more detailed figures on the level of evasion. Our estimate is approximately 7%. It has been noticeable in this difficult economic downturn that although advertising figures have fallen, the licence fee revenue has held up. I remember years ago hearing Conor Hayes say at this committee that as difficult as the collection system was, RTE could not see an alternative system as effective at raising revenue. When someone proposes such a system, we will consider it.

Deputy Simon Coveney

Is that not a matter for the Department? However, it is the best system we have for raising revenue which, at this time, provides a cushion against the dramatic fall in commercial revenues within RTE.

Deputy Liz McManus

Other countries are developing more modern systems.

Deputy Simon Coveney

We have shown ourselves able to quickly develop a levy system when we need money. That is a far more efficient way of raising money and it is much fairer because everybody pays.

Deputy Eamon Ryan

Everybody who has a television set pays the television licence fee.

Deputy Simon Coveney

They do not. That is the problem. Everybody who pays is paying for at least 20% of people who do not. The new systems the Minister has introduced do not incentivise people to pay. The incentive is to wait until one is caught, pay the fine and then start paying the licence fee.

Deputy Eamon Ryan

Deputy McManus and I are of like mind in regard to this. We do not want to put people into prison.

Deputy Simon Coveney

Nor do I. The Minister should increase the fine.

Deputy Eamon Ryan

We are going to be tight on time, Chairman.

Chairman

We should move on. I call the Minister to comment briefly on subheads D1 to D5.

Deputy Eamon Ryan

I appreciate what the Deputies said regarding increased spending in the energy sector. It is recognised that there is a stimulus opportunity, particularly in some of the insulation schemes, to create jobs and also meet an important long-term target of reducing our dependence on imported fossil fuels.

The warmer homes scheme, the home energy savings scheme and the greener homes scheme are three of the bigger schemes. We will continue to assess the home energy savings scheme as it evolves. It is better to test it, as we did last year in a number of counties, and mainstream it as we are doing this year but continue to adapt it and not be rigid in terms of what it applies to and how it works. In response to what Deputy Coveney said about pricing and undercutting, the scheme is very much designed to address that issue. Since it is a fixed grant and not a percentage of the cost of the work carried out, there is every incentive for a contractor on the register of contractors to compete with the people about whom the Deputy is talking and come back with a better price. There is not a lock-in, whereby the job must be costed at a certain amount. There is a set grant in terms of support. That does not prevent someone from getting work done to the right standard at a cheaper price and passing on the reduction to the householder. If, as the Deputy says, there is a very competitive market, there is every reason that should happen.

Deputy McManus referred to the warmer homes scheme, funding for which has increased from some €2 million a year ago to €20 million now. That is not a small increase. It is an increase of 1,000%. I will certainly examine the schemes and if it is discovered that there is greater demand for particular schemes, we will consider adjusting budgets between schemes.

Deputy Liz McManus

That is what I am asking. I thank the Minister.

Deputy Eamon Ryan

On the greener homes scheme, since I have been in office, I have constantly tried to flag that these grant schemes will not be in place forever. Their purpose is to provide for economies of scale to bring down the price. We will continue to include new technologies and exclude those that have achieved the objective of becoming commercially successful.

There was real concern during that budgetary period of some six weeks or so, to which Deputy Coveney referred, because projects were stuck while awaiting budgetary clearance. The reason for this was that the Department of Finance wanted to check any budget commitments that would run into the following year. We did not want to go into next year's budget where one would certainly find one's budget process constrained by people saying this was all pre-contracted and that the budget was set in a particular way. On an across the board basis, therefore, there was a check for a period of time to restrict this because in the case of many of the Sustainable Energy Ireland schemes, in particular the greener homes scheme, there was a window of up to 12 years or longer in which to do the work and the scheme was running into that category of projects that were on hold. That constraint has since been relaxed and there is a mechanism, whereby, within certain limits, SEI has discretion in regard to its budget. I understand most of the schemes are working again and that short-term block which I know was difficult for companies has been cleared.

These are some of the most prominent schemes but the important new developments are in the public service and the business sector. The large energy users group figures show how great are the savings that can be made. I have referred to a saving of €55 million in that regard. As well as the expanded home energy savings and warmer home schemes, the work carried out by SEI in public sector and commercial buildings is crucial. I am seeking an outcome, whereby energy service companies deliver efficiencies on a commercial basis but are kickstarted by our own work in the public sector and the support schemes managed by SEI.

Deputy Simon Coveney

I urge the Department to make sure we get value for money in delivery. My big concern about a grant aid system which matches or pays one third of the funding is that service providers can bump up the price. People may think they are getting a good deal, but that is not the case. We need to be aggressive about it and if the State is providing 30% of the funding, we cannot allow a 20% increase in the price for the rest of a particular job. We should be as competitive as any homeowner looking for an investment. We have made that mistake in the past with grant aid programmes or where the Exchequer provided partial funding. The Department should work with SEI to make sure we get the right price. Information should be made available to comsumers in order that they can be sure they are not being ripped off.

I strongly support the allocation for combined heat and power deployment and would like the Minister to spend more money on this area, if possible. We should provide CHP capacity in public buildings all over the country, whether they be schools, hospitals, museums, etc. The Minister spoke about building economies of scale within industries and they are what we need for fuel sources such as biomass, woodchip or wood pellets. The State needs to take the lead in showing what CHP can do at a commercial level to provide for economies of scale that can benefit fuel industries. We have proposed doing this through a new State company, but the Department can do it directly. It should emphasise that programme, as well as those related to energy conservation.

In the context of the greener homes, warmer homes and home energy savings schemes, the Department should deal with windows, as well as insulation. An average room in a house loses 40% of its heat through the window and that is when the window is closed. That is a big problem as there are many single-glazed windows and doors in households across the country, as well as totally inefficient double glazing. If we support insulation programmes with Exchequer funds, we also need to deal with windows as they are just as important as insulation for preventing dampness and heat loss, as well as energy conservation. It is important to note that window frames are as important in this regard as window panes. My understanding is that the system for measuring the energy efficiency of windows is not as accurate or detailed as in the United Kingdom. That is an issue we could look at. I understand the Minister for the Environment, Heritage and Local Government, Deputy Gormley, is examining this area but it is very much an energy issue as well as a building regulations issue. If there is to be an expansion of any of these schemes that is the obvious next step.

Deputy Liz McManus

There are two websites —powerofone.ie and change.ie. I have had many complaints about the fact that there appears to be duplication. What arrangements are in train to have that matter dealt with? In regard to geothermal power which I understand will require legislation, will the legislation be published this year?

Deputy Eamon Ryan

On the home energy savings scheme, which I recommend and have been promoting, a building energy assessment is crucial because it provides a check in terms of whether one is getting the right work done, getting value for money and advice. I always commend people to do that. I understand the cost of the building energy rating has reduced quite significantly so that the grant is reasonably significant. That is the right way to measure it. I said all along that we would look at the windows issue and will take account of what Deputy Coveney has said.

The websites are complementary. I see no reason one should not fit within the other. Change.ie is a broader area of interest in terms of climate change.

Deputy Liz McManus

Will the Minister continue with two?

Deputy Eamon Ryan

I do not see any reason one should not fit in with the other or that they do not work and complement each other.

Deputy Liz McManus

One does not know what the other means.

Deputy Eamon Ryan

Change.ie has to look at a whole range of things — what food we eat, how we travel, how we deal with energy——

Deputy Liz McManus

Therefore, the Minister will continue with two.

Deputy Eamon Ryan

My instinct would be to continue with two. In regard to geothermal, we are working on the minerals Bill which involves an upgrade of the whole minerals legislation. It is due to be published later this year and is listed on either the B or C list. Whether the geothermal issue is included as part of that minerals Bill or as a separate Bill at the same time has yet to be decided. A public consultation meeting will take place on 16 June to decide the issue. However, it is important that the geothermal legislation is put in place to enable people to make the investments they may wish to make.

Chairman

We will move on to subheads E1 to E6. I invite the Minister to comment briefly.

Deputy Conor Lenihan

A question was asked about legislation dealing with the restructuring of the inland fisheries. I can reassure the Deputy, as I did in the House, when she asked about it some weeks ago.

Deputy Liz McManus

Are we dealing with subhead E?

Chairman

We are on natural resources, subheads E1 to E6. The Minister of State has moved on to subhead F1.

Deputy Conor Lenihan

I am simply answering the question.

Deputy Liz McManus

Is ocean energy the responsibility of the Minister of State's Department?

Deputy Simon Coveney

Was ocean energy covered in the previous subhead?

Chairman

It comes under subhead D3.

Deputy Simon Coveney

It comes under subhead D.

Deputy Conor Lenihan

Subhead E1 comes under natural resources — petroleum services, and subhead E2 deals with mining services.

Deputy Simon Coveney

On ocean energy funding, we had a discussion on this topic at Question Time. I am concerned that the initial launch of the ocean energy funding programme for Government promised a very substantial amount of money to be spent over three years. That has not been delivered. A sum of €1 million was spent last year and the Minister is planning to spend €7 million this year. Can we realistically expect the balance of what was announced last year to be spent in 2010 or has everything changed in that regard? I am concerned that we are potentially losing momentum in the ocean energy side. I know that SEI is doing good work in this area but this needs to be backed up with funding such as bringing pilot projects to a commercially viable level. This requires a great deal of money. This industry is still in its infancy. My concern is that other countries are pumping time and investment into this area on the other side of the Atlantic and in Portugal. I do not want Ireland to fall behind in this area for the sake of spending money early on and particularly considering the offshore natural resource we possess in abundance. Ireland needs to be seen as the leader in this area. My real concern is that we are only proposing to spend a fraction of what we announced in the ocean energy area. I ask the Minister for some reassurance.

Deputy Eamon Ryan

I share the Deputy's vision of Ireland being a leader in the area of ocean energy development. I acknowledge there was a delay last year which is regrettable. This was due mainly to the establishment of the ocean energy unit within SEI and the recruitment of staff but we now have the right people and I have confidence in their ability to be ambitious and aggressive in the development of the industry.

I attended the launch of the ocean energy industry group established recently. There has been no shortage of applications for testing devices to go off the Belmullet west Mayo coast and some of those applications are from very large international investors as well as local companies. I hope our foreshore licensing system is responding so that buoys or other measurement materials can be put out in that area this summer. It is planned that next year there will be scale devices going out. We have a test site in Galway and we will develop that site in the west off Mayo. We hope to place ourselves at the head of what is happening.

Other forms of energy include wave, tidal and wind energy. These are all different development phases. One of the Irish companies, OpenHydro, is probably a world leader in technology and deployment. We must concentrate on being a leader in wave energy because we have the best resources and we have a support programme and plan in place. I do not foresee that a lack of funding will restrict us. We want to push forward as quickly as possible.

In the area of ocean wind energy, the developments in the UK are slightly ahead of us, one of the reasons being that they cannot seem to harness onshore wind whereas we have been successful in that regard. There is no lack of ambition on our part. The work on the INTERREG project with Scotland and Northern Ireland for the development of the offshore grid is important. I am very happy to support and to deliver on any ocean energy project, be it wind, wave or tide.

Chairman

Subheads E1 to E6 deal with natural resources.

Deputy Conor Lenihan

Subhead E1 relates to petroleum services and funds a number of activities in the petroleum infrastructure. The petroleum infrastructure support group is for projects to promote knowledge and understanding of Ireland's offshore; the continental shelf — this is expenditure to support claims to UNCLCS by Ireland to extend the area of the continental shelf; the strategic environmental assessment is expenditure to undertake comprehensive assessment of the Celtic Sea-Irish Sea areas. This also involves spending for the north-west Mayo forum where incidental costs associated with the forum, including fees payable to the independent chairman and costs related to the former are shared jointly with the Department and the Department of Community, Rural and Gaeltacht Affairs.

Deputy Simon Coveney

We can deal with this subhead quickly. With regard to the seabed survey and the new project with which we are now moving ahead, I understand there was a very exciting find in recent days of a live coral reef of about 200 sq. km. This is a good example of the benefit of sea bed surveys. Some members of the joint committee have visited the Marine Institute in Galway, where much valuable work which will bear fruit economically and financially is being done. Many people question our spending on offshore research but I believe we should continue to spend in this area. I welcome the investment there.

Deputy Noel Coonan raised the issue of mining compensation payments with the Minister of State several times. A relatively small number of people have worked in mines which the State either regulated or partially owned. I see that approximately €2 million has been put aside for mining compensation payments. It is linked with claims against Tara Mines. Is the State saying the relatively small number of families affected by serious illness as a result of time spent working in mines can look forward to receiving a settlement? That would be a very welcome development. The note indicates that the compensation relates solely to claims taken in court against Tara Mines. Is this likely to lead to a series of court cases or can the State take the initiative and make a settlement with the families concerned? Relatively small numbers of people are involved at this stage.

Deputy Liz McManus

The recent low level of applications for gas and oil exploration licences is of some concern. There seems to be very little interest in exploration. We are all aware of the technical difficulties involved. The tax regime in this area is still benign, even with the Minister's changes, but the companies have raised another issue. They complain that the Department's requirements make start-up costs in Ireland very high compared with Britain. When these requirements are added to technical costs, exploration in Ireland is unattractive for companies. Can the Minister comment on this?

Deputy Conor Lenihan

Deputy Coveney referred to the recent live coral reef find. He is ahead of me because I have not been told about it by my officials. He is better informed than I on that matter. I am now getting a quick update.

Deputy Simon Coveney

I heard about it on this morning's radio news.

Deputy Conor Lenihan

It is a Marine Institute project. It is not associated with the sea bed survey or with my Department.

Deputy Simon Coveney

It is not Deputy Lenihan's responsibility. He need not worry about it.

Deputy Conor Lenihan

Deputy Coveney raised a more substantive issue of people who may have been affected by working in mines. That is the responsibility of the Department of Social and Family Affairs. The money referred to here relates mainly to Tara Mines and to compensation to landowners whose lands have been affected by mining.

Deputy Simon Coveney

Unfortunately, I thought we were making some progress in the other area.

Deputy Conor Lenihan

No, it is really a matter for the Department of Social and Family Affairs. Obviously, the low level of interest Deputy McManus mentioned is a very serious issue for us. We constantly try to increase the potential for people to conduct more offshore exploration and mining operations in Ireland. Obviously, that is the purpose of subhead E1. The petroleum infrastructure support group is part and parcel of this. We combine with the industry in mapping the seabed, whether it is the Porcupine Basin or elsewhere, in order that we can open up more grids.

Deputy Liz McManus

My complaint is not about mapping but about levies imposed by the Department.

Deputy Conor Lenihan

We need to cover our costs. We are not as big as the United Kingdom in that regard. We are happy with the cost figures. We are not directly comparable with the United Kingdom in terms of what we can afford. It is expensive.

Chairman

I ask the Minister of State to make a brief comment on subheads F1 and F2 which concern inland fisheries.

Deputy Conor Lenihan

These subheads provide for the salaries of staff of the central and regional fisheries boards and the Loughs Agency, a North-South body co-funded jointly with Northern Ireland, and an unpaid provision for capital and current expenditure incurred by these agencies. Provision is also made for the salmon management regime which meets the cost of the salmon management programme, including the expenses of the National Salmon Commission.

Deputy Liz McManus

It is very perplexing. There is no strategy or indication of what the Government is doing in terms of staff, office accommodation or management of the changes in the structures for inland fisheries.

Deputy Brendan Kenneally

The eel management plan was referred to in the script. The plan was put in place without conducting proper surveys. We were told surveys of stocks had been undertaken. However, that is patently not true because it did not happen in my part of the country in the Suir Estuary or on the River Nore. I wrote seeking a copy and, of course, it was not produced because it is not available. I understand a decision was taken in recent weeks to close down eel fisheries here for the next three years. That was decided without a proper survey being carried out. I know fishermen in the south east are practising using a 50% escapement figure which is what was discussed. I request that the decision be reversed until a proper survey can be carried out. If we had proper information, we could make informed decisions.

Deputy Simon Coveney

I know the Minister of State attaches considerable importance to salmon conservation. The allocated funding has been reduced dramatically by 67%. Is that because of the compensation paid last year in buying out draft net fishermen? I assume that is the explanation but ask the Minister of State to put it on record.

In what areas will the allocated funding be spent? Will it go towards salmon fishermen hardship and community support schemes? How will the Department support those who previously relied on drift or draft netting of salmon in looking for new ways to make money and moving into other industries? Most of the time they move out of the fishing industry altogether.

I share the concerns expressed on the management of eel stocks. Other European countries have been faced with this issue. I understand Ireland is the only country to introduce an outright ban on eel fishing. Others are introducing management systems or quotas. Have we conducted the necessary research to justify bringing this industry to an end, which is what we are proposing to do? Such a decision should not be made on the basis of a hunch or an estimate without the necessary research being done. Perhaps it has been done but I seek some detail on the matter.

Deputy Eamon Ryan

I will take up that because it was signed off in advance of the Minister of State, Deputy Lenihan, taking on the statutory functions. Earlier, Deputy Coveney referred to the Marine Institute. The research from the institute in respect of eel stocks is truly shocking. Even since the EU directive the numbers continue to fall off the edge of the cliff. Effectively, we are looking at the extinction of the species, or the potential extinction. It is a last gasp attempt to try to restore or keep some stocks and it is not insignificant. My assessment of the ecosystem approach and how we review nature is that one can consider any one species and argue that it is not significant or important, but there is an interconnection and a food chain in our rivers and eels form a significant part of it. The side effects which may occur further down the line from the extinction of a species of such significance to the Irish water system cannot be fully measured. There would be effects on bird life because the kingfisher population depends on eels, as do puffins and so on. There is a very significant interconnection in nature and it is absolutely correct at this last minute stage to try to give some sense of a future in a small way.

Upon examination, the figures, the science and the research are truly startling. That may be the reason our commercial catch was down to minuscule levels and it could cost us far more to maintain any level than it would cost in terms of the commercial return from it. I would freely sit down with anyone and go through the scientific evidence, clearly presented over several years, especially the recent figures showing the collapse of stocks. The decision was made on that basis.

Deputy Simon Coveney

Will the Minister send us that research? I presume we could get it from the Marine Institute but it would be helpful to get it.

Deputy Eamon Ryan

I will ask the Marine Institute to send on the details.

Deputy Brendan Kenneally

I wish to examine the details on the Suir Estuary especially.

Deputy Conor Lenihan

I assure Deputies all the material is available and the best scientific advice was provided to the Cabinet and the Department in framing the decision.

On the wider issue of the salmon community support scheme raised by Deputy Coveney, some €5 million is being spent. The scheme was launched in March 2009 to assist the development of additional economic opportunities for those previously employed in the ancillary sectors of the commercial salmon industry. The Deputy specifically asked what projects could be carried out under the scheme. Broadly speaking they are in the area of retraining of the labour force and those involved in ancillary services, diversification into non-salmon fishing economic activity, education and employment preparation for the labour force and projects to promote the quality of the coastal environment. These are the projects funded under the scheme.

Deputy Simon Coveney

How do individuals apply for them? That is where the concern seems to be. Is it through fishing organisations?

Deputy Conor Lenihan

It is through the Leader programme and it is administered through the Department of Community, Rural and Gaeltacht Affairs.

Deputy Simon Coveney

Some individuals concerned have approached me and there seems to be real ignorance about how or whether one may apply.

Deputy Conor Lenihan

Does the Deputy seek a detailed note on the matter?

Deputy Simon Coveney

It would be helpful. Is the application procedure closed at this stage? Can people still apply for funds under the scheme?

Deputy Conor Lenihan

We will find out and revert to the Deputy and get him a good, detailed note on the matter including the relevant contact points.

Deputy Simon Coveney

The numbers are small but these are people who are genuinely trying to diversify.

Chairman

We will move on to subheads G1 to G4, which deal with miscellaneous matters. Will the Minister provide a brief comment?

Deputy Eamon Ryan

These subheads provide for expenditure for subscriptions to international organisations, the Change Management Fund, the Gas Standards Technical Committee and several other miscellaneous items.

Chairman

Let us move on to subhead H, appropriations-in-aid.

Deputy Eamon Ryan

We do not have spending control on almost half of our budget, particularly the broadcasting licensing fees and several other areas such as minerals development revenues, fines and other smaller items.

Chairman

Is there any general comment on the output statement for 2009? We have discussed most of it at this stage. Do spokespersons wish to make a final comment?

Deputy Simon Coveney

I thank the delegation for the briefing. It is well known that Fine Gael would like to change our current budgeting system to one that involves more interaction on an ongoing basis. However, the Department has been very helpful this morning. I thank the Minister also. I have not had an opportunity to welcome the new Minister of State in the Department, Deputy Conor Lenihan, to the Department. I look forward to working with him.

Deputy Liz McManus

I thank the Minister for taking the time to deal with our issues. It is very useful for us to have this kind of scrutiny of the Estimates, although our minds are slightly disengaged due to the elections. In the coming 12 months the areas of energy and communications will be central in terms of economic growth. I appreciate there is a heavy onus on the Minister and the Minister of State, but I hope we can play a part in not just scrutinising, but in assisting what they are doing, because it is so important for our country's future.

On a minor point, all other visitors to this committee have their names displayed on the desk in front of them. I know civil servants like to keep in the background, but it would be helpful if their names were displayed. When I first became a spokesperson the Secretary General very kindly advised me as to who was who in the Department, but there have been many changes in personnel. It would be useful to know the names of those who come in to put their heads above the parapet. I presume they have names, not numbers. Sorry for that meanness. However, it would be useful to know the names.

Deputy Eamon Ryan

I thank the Deputies for their contributions. I appreciate the points made about the importance of this area. I agree on that. I also appreciate what Deputy Coveney had to say about the budgetary process. We should continue to examine how we present our Estimates and how we get contributions from across the House. That is an important check and is helpful. I appreciate the Deputies' comments and the work done today.

Chairman

That concludes the select committee's consideration of the Revised Estimates for public services for the year ending 31 December 2009, Vote 30 — Communications, Energy and Natural Resources. In accordance with Standing Order 87 the clerk of the committee will convey a message to this effect to the Clerk of the Dáil. Under Standing Order 84(2) the message is considered to be the report of the select committee.

On behalf of the committee, I thank the Minister, the Minister of State and their officials for their attendance.