SELECT COMMITTEE ON COMMUNICATIONS, ENERGY AND NATURAL RESOURCES debate -
Wednesday, 23 Jun 2010

2010 Annual Output Statement

Vice Chairman

I remind members to ensure their mobile phones are switched off for the duration of this meeting, as the signals cause interference with the broadcasting of the proceedings.

The purpose of today's meeting is consideration of the Revised Estimates 2010, Vote 30 — Communications, Energy and Natural Resources, which was referred to the select committee by order of Dáil Éireann on 18 February 2010. Members will be aware that each Department must now publish an output statement for consideration by an Oireachtas committee. An output statement has been provided and circulated to members along with the Estimate. The Estimates debate should have particular focus on the outputs to be achieved for the moneys being voted. I propose we consider the annual output statement and the Estimates together. Is that agreed? Agreed.

On behalf of the select committee, I welcome the Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, and his officials to this meeting. I invite him now to make his opening statement.

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

I apologise profusely for my late arrival. I was caught at a meeting that ran on longer than intended.

I am very pleased to introduce the 2010 Revised Estimate for the Department of Communications, Energy and Natural Resources. The gross provision of more than €517 million, with another €15.7 million capital carryover from 2009, represents an increase of 13% over last year's outturn. This is comprised of a decrease of 3% in gross current expenditure and an increase of 70% in gross capital expenditure. The major increase in capital funding mainly reflects the Government's support for an acceleration in funding for key energy efficiency measures, including the national retrofit programme announced by the Minister for Finance in budget 2010. These measures will boost energy efficiency, reduce carbon emissions and stimulate the economy in a growing area of innovation that has major economic and employment growth potential. The Vote also includes significant provision for funding in the communications and broadcasting areas, both important sectors in the development of Ireland's digital economy. Overall, the Vote provision supports activities in key areas that will help underpin the delivery of a smart, green economy in Ireland.

Energy, communications and natural resources policies have critical contributions to make to the key challenges of restoring our competitive edge, promoting sustainable economic recovery and employment growth and developing smart innovation. In addition, energy policy has a crucial role in mitigating the effects of climate change. The energy sector is pivotal to national competitiveness and sustainable economic and social renewal. Investment in energy efficiency and renewable energy will drive job creation and assist sustainable economic growth.

A communications infrastructure is equally critical for economic growth and recovery. For these to occur, Ireland requires a world class national broadband infrastructure which will ensure that every part of the country has full access to broadband coverage to attract cutting-edge, knowledge-based industries. While this will be delivered primarily through private investment, the 2010 Vote provision will fund significant investments in our broadband infrastructure, including the national broadband scheme, the pilot roll-out of 100 megabyte connectivity to second level schools and establishment of the exemplar network testbed lab.

Efficiency and effectiveness in the delivery of public services is critically important. My Department prioritises making the best use of resources by focusing on outputs, outcomes and the delivery of value for money. In this regard, I am pleased to present to the select committee the Department's annual output statement, a copy of which each member has already received. Good progress was made on delivering on 2009 target outputs.

Key output and outcome targets to be delivered in 2010 can be found in part 4 of the statement. This output statement is more focused on the important headline outputs rather than on internal processes and activities. In addition, we have set out a brief rationale for how programme outputs contribute to the achievement of key strategies.

I will now take the select committee through some key details of the Vote. Our administrative budget is set at €26.838 million. Subheads A1 to A9 constitute the administrative budget, which 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 increase of 5% in the 2010 administrative budget provision, in comparison with the outturn for 2009, masks the fact that the 2010 provision is 11% below the corresponding 2009 Estimate. The low 2009 outturn reflects the efficiencies being driven by my Department and the focus on achieving value for money.

Since the beginning of 2008 the number of staff employed in my Department has been reduced by 76, or 22%. In fact, the Department has already reached the end-2012 McCarthy report numbers target. This is reflected in a paybill provision that is 9% below the 2009 outturn. Notwithstanding this significant reduction, all areas of the Department have maintained efficient service delivery. Productivity will have to be reinforced in 2010 and the coming years in the light of inevitably constrained resources.

In communications, our budget is set at €67.802 million and includes €14.290 million capital carryover from 2009. A total of almost €68 million is being provided in 2010 for communications and multimedia developments. Availability of broadband services in all areas of the country and a significant enhancement in broadband speeds are major priorities for the Government. Good progress has been made in broadband provision in recent years. Ireland now ranks 11th out of the EU 27 for per capita broadband penetration, fourth out of 27 for mobile only per capita penetration and 14th for fixed broadband penetration.

We had been lagging behind EU and OECD comparator countries in recent years but the roll-out and take-up of mobile broadband has helped to improve our international standing significantly and move us beyond the EU average. There are now more than 1.443 million broadband subscribers in Ireland with the broadband per capita penetration rate at 32.4%. This compares with just 1.2 million subscribers at the end of 2008.

Businesses rate their satisfaction with the speeds they receive from their Internet service providers very highly with three quarters saying they are satisfied. In addition, 84% of businesses state that their company's overall telecommunications costs have either decreased or stayed the same in the past 12 months. Some 68.4% of homes and 72.8% of SMEs are now using higher speed broadband of between 2 and 10 megabytes per second.

More than €46 million is being provided in 2010 for Government investment in broadband infrastructure. Since entering a contract with my Department in December 2008 for the national broadband scheme, 3 has progressed network roll-out of mobile wireless broadband services to residences and businesses and national broadband scheme services are now available in almost 70% of the 1,028 designated electoral divisions to be covered under the scheme. The 2010 Estimate includes in the region of €30 million for completion of the national broadband scheme later this year.

Provision is also made for the implementation of the Kelvin international connectivity project, which will provide direct international broadband connectivity to 13 towns on both sides of the Border. This project, which is almost complete, 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 2010 Estimate includes funding of €6.2 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 underpin this aim. Funding is provided in the Vote for a pilot project involving 100 megabytes of broadband connectivity for 78 second level schools. In 2010, the Department will complete the construction of the individual elements to bring the project to fruition and it will be operational for the start of the next school year. It is my objective to make available 100 megabyte broadband connectivity for all second level schools. This will provide the interactive learning environment that will prepare our students for jobs in the knowledge economy.

I am also taking specific actions to directly develop the knowledge economy this year. Following the publication of the Knowledge Society report last July, I have secured funding which will see the launch of the exemplar network testbed lab next month. This facility will provide both companies and research groups with access to world leading technology that has the potential to revolutionise the Internet.

Some €5.194 million is provided in 2010 under subhead B2 towards the operating costs of the national digital research centre, NDRC, to continue its development in the area of translational research. A further €2.360 million under subhead B2 is provided for the work of the Digital Hub Development Agency. The agency continues to attract digital media enterprises and has a current cluster of 98 companies with 664 full-time and 220 part-time employees. Subhead B3 represents my Department's allocation from the Dormant Accounts Fund under the RAPID programme. Some €0.370 million is provided to complete projects that will assist disadvantaged young people to exploit information and communications technologies opportunities. Some €0.450 million is provided in subhead B4 for information society and e-inclusion. This will provide for the successful completion of the BeneflT eInclusion grant scheme and for an analysis of the impact of the scheme to inform future policy. It also provides for the publication of a knowledge society strategy addressing e-participation, e-inclusion, e-health and an update on actions identified in technology actions to support the smart economy.

Subheads C1 to C5 provides €256.23 million in respect of the broadcasting sector in 2010. It is estimated that broadcasting licence fee revenue of €222.13 million under subhead H4 will provide for grant-in-aid of €195 million to RTE under subhead C1. In addition, An Post will receive licence collection funding of €12.452 million under subhead C2 and a contribution of €14.678 million will be made to the broadcasting fund under subhead C4. The latter reflects the increase to 7% of licence fee receipts for this fund.

The provision of €34.05 million under subhead C3 will allow TG4 to maintain its high quality Irish language schedules. The Broadcasting Commission of Ireland and the Broadcasting Complaints Commission no longer exist. They have been replaced by the Broadcasting Authority of Ireland which is funded by industry levy rather than the Exchequer.

Under energy, the budget of €127.282 million includes €1.431 million of capital carryover from 2009 — a total spend of €127 million in the energy area. Funding of €90 million, including €50 million carbon tax revenues for retrofit measures, has been allocated to the Sustainable Energy Authority of Ireland for the further expansion of its domestic and non-domestic energy efficiency schemes. A further €40 million has been allocated by the Minister for the Environment, Heritage and Local Government to improving energy efficiency of social housing across the country.

This unprecedented level of funding will this year alone support energy efficiency improvements in more than 60,000 homes and buildings, support 5,000 jobs and create energy efficiency savings worth a total of €400 million. In tandem with the increased level of activity in existing programmes in 2010, the Department and SEAI are also designing a new retrofit programme. The programme will be the subject of a public consultation but in broad terms, it will bring together the home energy savings scheme and the warmer homes scheme as well as support programmes for businesses and the public sector.

The programme will involve energy supply companies, energy services providers, construction workers, energy auditors and policy makers, working together to deliver energy savings, cost reductions and ultimately smaller carbon footprints for energy customers throughout the country.

This new programme has the potential to be the most innovative, ambitious, energy-efficiency initiative ever introduced in Ireland. It will significantly contribute to meeting the national efficiency targets, including the target of 33% set for the public sector. It will also create significant employment in the energy and construction sectors in support of economic renewal. In 2010, the funding allocated to the retrofit programme will be used as necessary to supplement the home energy saving scheme, the warmer home scheme and business and public sector programmes.

High priority is being given to supporting the development of Ireland's ocean energy potential. Some €7 million is being provided for this area in 2010. Not only will ocean energy contribute to Ireland's renewable energy targets, it has considerable potential for inward investment and enterprise activity in support of economic renewal. Full implementation of the ocean energy programme commenced in 2009. An exploratory foreshore licence was granted to SEAI in September 2009, which has enabled site investigation works to commence at the planned test site location at Annagh Point, County Mayo. Progressing the test site is a key priority for 2010. We hope to further enhance Ireland's energy research capability next year through the expansion of ocean energy research and the development of the newly-established international research centre in Cork.

There is a provision of more than €24 million in 2010 for the natural resources area. Direct expenditure in the offshore exploration area is relatively small but my Department performs an important regulatory function in the 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 to Ireland. My Department takes a proactive approach to promoting the opportunities for exploration investment in offshore Ireland. Over the past decade there has been an upswing in the number of companies seeking exploration licences and in the number of exploration wells being drilled.

Subhead E2 provides funding of more than €6.7 million in respect of mining services in 2010. That includes some €3.5 million in respect of rehabilitation works at Silvermines, County Tipperary, and almost €1 million for health and safety works in Avoca, County Wicklow.

The provision of €4.285 million under subhead E4 will fund a range of multi-annual initiatives in the geoscience field. Almost €3.5 million of this is earmarked for the Griffith geoscience research awards where projects are reaching their mid-point and, subject to successful review, are due payments this year.

Subhead E5 provides €2.992 million in 2010 for INFOMAR, the successor to the Irish national seabed survey. INFOMAR 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 €4.985 million to Ordnance Survey Ireland, OSI. 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. More than 80% of OSI's funding for 2010 is forecast to be commercially generated.

Inland fisheries in subhead F1 provides for the salaries of staff of the central and regional fisheries boards and the Loughs' Agency, and a non-pay provision for their capital and current expenditure. The Loughs Agency is a North-South body and is co-funded 50:50 by my Department and the Department of Agriculture and Rural Development, Northern Ireland.

Provision is also made for the salmon management regime, which meets the costs of the salmon management programme, including the expenses of the National Salmon Commission. Following on from the 2009 budget day announcement of the rationalisation of State agencies, the Government approved proposals for the restructuring of the inland fisheries sector, which included the creation of a single strengthened inland fisheries authority to be known as Inland Fisheries Ireland. The authority will replace the existing central and seven regional fisheries boards. The primary legislation required to deliver the restructuring has been enacted. I have set 1 July as vesting day for Inland Fisheries Ireland upon which the existing central and regional fisheries boards will be dissolved. The salmon hardship scheme and the community support scheme were successfully concluded in 2009 and no 2010 provision is required.

More than €1 million is being provided under subheads G1 and G4 to fund other organisational initiatives. Energy and telecommunications services and infrastructure are key elements of Government economic recovery policy. They are essential to underpin the delivery of a smart, green economy in Ireland. I am pleased that in such difficult times for the public finances I have been able to receive significant Government support for the implementation of this policy. I look forward to the contributions from the committee and to clarifying points as necessary.

Deputy Simon Coveney

Do you want us to make opening statements at this stage or to consider the detail of what the Minister said?

Vice Chairman

Deputy Coveney can make an opening statement to be followed by Deputy McManus.

Deputy Simon Coveney

I am pleased the Minister is present with a big team. It provides an opportunity for us to raise issues and question the Minister as matters arise.

The Minister has outlined all of the planned expenditure in the Department for this year and how that compares with last year. There does seem to be a significant difference between the output targets for last year and what was achieved. I refer in particular to capital expenditure programmes in both the energy and communications areas. I would like an explanation for that and a prediction as to whether similar issues will arise in 2010. For example, a significant amount of money was allocated last year for some of the home energy efficiency scheme programmes but all of that money was not spent. The allocation was carried forward into this year which makes this year's allocation look higher in terms of capital expenditure than it otherwise would have been.

Perhaps we can go into detail on the metropolitan area networks in terms of what remains to be done, how much it will cost and the kind of outputs we are getting from it in terms of returns.

I look forward to going into the detail of some of the expenditure. The Minister will be aware that I take issue with some of the strategies he is following in the telecommunications area in particular. The State should be more proactive in investing in next generation networks as opposed to simply trying to put the market conditions in place that would allow the private sector to make the investment. I do not think the strategy we are following at the moment is working. From his point of view the Minister is correct to concentrate on the number of people using broadband services because that figure has increased. That is because broadband is now a necessity rather than a luxury for businesses but also for most homes. There needs to be a much more proactive focus on State involvement in working with the private sector to get significant sums of money spent on upgrading networks to provide next generation broadband speeds. I fear that while other countries are doing that, we are not. There are ways in which we could finance that.

Likewise, I have concerns about digital terrestrial television, DTT, and how it is being funded. I understand that RTE has spent approximately €50 million to date and there is another €30 million to €40 million to be spent. Perhaps the Minister could clarify that. I believe the planned expenditure has been reduced from €110 million to €70 million in anticipation that the income stream that was supposed to come from a commercial DTT operator is now not going to materialise and RTE still has targets to meet. The Minister is correct to press ahead so that we can prepare for analogue switch off but there is a cost implication for that. It is extraordinary that RTE can continue as it is in terms of incurring a cost that it had predicted would be balanced by income from three commercial multiplexes when that is no longer the case. It is bizarre if that has no implication for RTE funding. Perhaps the Minister will provide some detail in that regard.

On the whole, I welcome the fact that in comparison to other Departments the Minister has managed to secure increased expenditure in certain areas. That is a positive thing. When we get into more detail on the subheads perhaps we can explore how that money is being prioritised.

Deputy Liz McManus

I thank the Minister for his comprehensive statement. Looking at the Estimates, one gets the impression that the Minister managed to escape the worst of the cuts. Going through the different sections, there is a concern about the non-spend of moneys allocated last year and their roll-over into this year. I understood moneys not spent by a Department go back to the Department of Finance at the end of the year. Will the Minister clarify how it works in his Department?

I will be parochial and welcome the modest allocation of €1 million to the Avoca mines health and safety project. An issue has come up with this before, however. Whoever is dealing with this should be aware there is an active local group which wants to develop the mines as a tourist amenity. This must be taken into account for any plans on the site.

The largest increase in the Estimates, 140%, is in consultancy services. I accept consultancy services are required in the introduction of post codes, for example. Presumably, some of these moneys will have to be used to deal with the IRFU television rights issue, a problem very much of the Minister's own making. How much is likely to be spent on consultants to deal with this specific issue?

I am concerned with the Minister's constant claim that three quarters of businesses are satisfied with broadband provision. That means 25% of them are not. That is the figure on which we should be concentrating.

The Comptroller and Auditor General and the Committee of Public Accounts made recommendations on the digital research centre and the MANs. Will the Minister explain how he will take up this advice?

There seems to have been a complete failure to reach what the Green Party often describes as the low-hanging fruit in home energy efficiency. Each time the figures for better home energy efficiency measures are released, they show a complete divergence between moneys allocated and moneys spent. For example, the home insulation scheme had €30.7 million allocated to it last year but only €16 million of it was spent. Moneys for the energy efficiency awareness initiatives have disappeared. In 2009, the allocation for the overall efficiency schemes was €92.2 million but only €55 million was actually spent. The home energy scheme was allocated €45 million but only €13.9 million was spent.

A repeat pattern is emerging of moneys being allocated but not spent even though there is a crying need for improving home energy efficiency and its spin-off potential for job creation. Each time I and others raise this, we are told these schemes go from year to year and many people applied unsuccessfully. Even allowing for that, the pattern is emerging that the moneys are not getting spent.

This year, for example, the moneys allocated to the warm homes scheme, which reaches out to the elderly and low-income homes, are down. There is the wonderful pot of €50 million in the mythical retrofit scheme. When it was announced back in December 2009, we all cheered that the issue was being taken seriously. Now coming into July, there is still no sign of it. What has happened to it? Have the utilities companies said they do not want to know about it? As far as I recall from a reply to a parliamentary question, some of the moneys allocated to the scheme were to be siphoned off into the standard grants schemes. Will the Minister clarify if this is the case?

Deputy Jimmy Devins

Broadband coverage has been alluded to already. By the end of 2010, will the 1,028 electoral divisions included in the national broadband scheme, NBS, be covered by it? As the Minister will be aware from correspondence with me on the matter, some areas outside the NBS do not have coverage despite the Department designating them as being able to receive it from mapping in the past. Is there some mechanism whereby these areas can get broadband coverage?

Does the Department intend to have broadband access for every national school? The Sligo-North Leitrim constituency which I represent is fairly rural and isolated in parts. Some of its schools' principals and pupils have informed me they have broadband coverage in theory but the download speeds are so slow they might as well not have it because it takes up so much school time. Accordingly, they cannot compete with other schools.

Deputy Eamon Ryan

Underspend is not an issue of concern. I am always looking to getting things done as quickly as possible.

The main bulk of spending is in the retrofit scheme and it was the area we really wanted to wrap up. While every other Department was decreasing spend, we were able to get an increased allocation for this scheme. It has real benefits in employment creation and leveraging other private sector investment. For every euro we spend on insulation, the private sector spends two to three euro. It is a way of getting economic activity going and it helps us meet our energy efficiency targets, emissions reductions, climate change targets and improve energy security.

Funding for the warmer homes scheme and the home energy savings scheme has been dramatically increased. Three years ago only 2,000 houses came under them; this year, it will be 62,000 houses. It has taken time. The home energy savings scheme started in February 2009. However, it was slow to get it up and running as assessments had to be carried out and contractors employed.

Deputy Simon Coveney

Will the moneys allocated to it roll over into the next year?

Deputy Eamon Ryan

Yes, if there is a carry-over, 10% of the moneys can be rolled over.

Deputy Simon Coveney

The moneys do not have to go back to the Department of Finance.

Deputy Liz McManus

Amounts coming to far more than 10% of the carry-over seem to have been rolled over.

Deputy Simon Coveney

Last year over €43 million was allocated to the home energy scheme but only €13 million spent. Is the difference lost?

Deputy Eamon Ryan

The carry-over applies to 10% while the remainder goes back to the Department of Finance.

However, this year we have seen——

Deputy Liz McManus

To clarify, how much money from all these energy savings schemes actually went back to the Department of Finance?

Deputy Eamon Ryan

To revert to the 2009 budget——

Deputy Simon Coveney

In 2009, under the general heading of energy, while €112 million was to be spent, actual expenditure was €61 million. As 10% of €112 million is €12 million, another €36 million or €37 million remains outstanding.

Deputy Eamon Ryan

The figure is 10% of the total allocation rather than of the subhead. I must go back and check the figures. However, I wish to make a point on the 2010 Estimates, which are under discussion. First, the home energy savings scheme, which is the major component, is doing exactly what was expected and expenditure is ramping up. As the Department is spending approximately €1 million per week, expenditure has proved to be strong, highly consistent and is €3 million or €4 million ahead of profile thus far this year. It is doing exactly what it is meant to be doing by creating employment and stimulating the economy.

Deputy Simon Coveney

May I bring the Minister back to last year? Last year, €49 million was allocated for expenditure on the home energy savings scheme but €16 million was spent. I can understand the reason for this, because it takes a while for people to realise they can get grant aid. Moreover, issues also arise in respect of getting the matching funding that people must secure. However, I want to understand clearly how much of that money was actually lost to the Department of Finance. The warmer homes scheme is a bit different in that €14 million was allocated, of which €12 million was spent, so it is covered by the 10% figure. However, I am trying to understand whether the Department of Communications, Energy and Natural Resources was obliged to hand back large sums of money to the Department of Finance.

Deputy Eamon Ryan

Yes, we were obliged to give back the underspent amount, albeit having held 10% of the overall spend——

Deputy Simon Coveney

Approximately how much was that?

Deputy Eamon Ryan

Approximately €35 million, which we are required to do by law.

Deputy Simon Coveney

Very well. I apologise for interrupting the Minister.

Deputy Eamon Ryan

However, the main reason for this was that it took longer than we expected to get the home energy savings scheme up and running. Thereafter, it is evident that it is working exactly as designed, with a significant volume of houses being upgraded on foot of significant investment from both the Government and the private sector. If the Government has spent €30 million or whatever is the exact figure thus far this year, two or three times that amount has come from the private sector as well. Consequently, the scheme was designed correctly. We took our time getting it right as it was first tested in three or four counties, which was the right approach to take. When we were satisfied that it was actually working, we launched it. Although it took slightly longer than expected for the public to pick up on it, now that they have done so extensively, it is spending its allocation and more. I wanted to give it as much budget room as possible, in order to avoid constraints in the event of huge public demand.

Deputy Liz McManus

Does the Minister accept it is the Government's job to make schemes work? Does he accept that it is hard to trust in figures that are so much at variance from the actual expenditure? If one budgets for twice as much as one intends to spend, it makes it hard to believe in the figures the Minister now is presenting to members. Does he not accept this?

Deputy Eamon Ryan

Does the Deputy not accept these are demand-led schemes and that the Government cannot force householders to take it up within a certain time line? However, it can budget to provide for it.

Deputy Liz McManus

If the Minister really wishes to open up that discussion, were I to design the scheme, I would have a different kind of scheme.

Deputy Eamon Ryan

What would the Deputy do differently?

Deputy Liz McManus

First, I would concentrate on houses for which there is greater need. If it is opened up, it becomes so loose. I certainly would invest in insulation in public buildings, such as schools and hospitals. Every hospital should be covered with external insulation. That should be the Government's marker if it is serious about insulation and increasing energy efficiency. However, I do not wish to go into this subject because this meeting is about the Estimates.

Deputy Eamon Ryan

No, this is a valuable conversation because I agree with the Deputy. This is the beginning of a ten-year process in which we must engage to change our building stock. I agree with the Deputy that there should be greater concentration on social housing than on wealthier housing. This is the reason that in addition to the allocation received by my Department, €40 million was allocated to the Minister for the Environment, Heritage and Local Government for social housing. I recently visited a council estate in my constituency in which the council is doing exactly that, namely, providing exterior insulation. While it is quite expensive, it is a highly appropriate investment. The warmer homes scheme has been ramped up significantly because——

Deputy Liz McManus

This year, the public sector element has been reduced.

Deputy Eamon Ryan

To explain, one point I have made in this regard is that I will meet any demand for the warmer homes scheme in this year's budget.

Deputy Liz McManus

The Minister cannot do that.

Deputy Eamon Ryan

I can.

Deputy Liz McManus

In that case, members should not believe the figures before them because the recorded reduction in the warmer homes scheme is not real.

Deputy Eamon Ryan

Allow me to carry through the point. The Deputy's other point is true. It now is necessary to move on to public buildings, as well as to commercial buildings. The best way to so do is to move on to what will be called the retrofit scheme. The best way to deliver the requisite change is to place an obligation on the utilities, as well as to bring together all of these schemes into a single co-ordinated scheme. This must apply to commercial and public buildings, as well as to housing and should include an obligation placed on energy companies to achieve energy reductions for their consumers, be they hospitals, offices or houses. One should allow energy companies to bid to achieve this using a variety of different technologies such as exterior insulation, control systems or whatever and one sets an absolute obligation that it must be achieved.

Such a retrofit scheme will take a few years to set up and establish. It is highly complex and will require the utilities to change their entire business model. It will be necessary to test it, adapt it, get it right and evolve it. This process is beginning this year and the Department has allocated a certain amount of money simply to get this retrofit scheme started. It will take two or three years to get it up and running properly but once this has been achieved, the country's entire building stock can be gone through. This budget allocation is additional to what is being done in respect of the warmer homes and home energy savings schemes. I have stated that the Department has decided that any requirements for the home energy savings or warmer homes schemes can also come from that retrofit budget. Consequently, if, as is happening in respect of the home energy savings scheme, we run ahead of budget, we will reallocate from the retrofit scheme because it will take time to do this. It is complex and the Sustainable Energy Authority of Ireland, SEAI, has the key responsibility in this regard. It must be provided with the staff to do this and the energy service companies and utilities must be brought on board and a quite complex obligation scheme must be established to do precisely what the Deputy advocated, that is, to move on to public and commercial buildings.

Unfortunately, energy-related initiatives take time and involve a multi-annual approach. While one may not get the exact project up and running within the time one wishes, we have demonstrated real ability to deliver. The home energy savings scheme is as good a scheme as any I have seen internationally. It is doing precisely what we set out to achieve two or three years ago and is making a significant difference to tens of thousands of homes. Consequently, I am proud of the manner in which it is working and am absolutely satisfied that I have the budget to meet the demand.

Deputy Mattie McGrath

I welcome the Minister——

Deputy Eamon Ryan

I apologise but a wide variety of other points was raised and I have gone into specific details without going through some of them. Perhaps we can return to them later.

Deputy Simon Coveney

Perhaps we can return to a specific section. I note the discussion has skipped to energy and other subjects have been missed.

Deputy Eamon Ryan

I agree and apologise.

Deputy Mattie McGrath

I also welcome the Minister and his officials. I too have misgivings, in particular about money being returned to the Department of Finance. It is a pity because as the Minister noted, any money being spent in this area is leveraging other money from private sources. I have encountered severe problems and difficulties with the SEI scheme for warmer homes in my constituency. It has been fairly pathetic, in that people have been waiting 12 to 15 months without follow-up. I am delighted that the contract has been awarded this year to a local community group, Muintir na Tíre. There should be more such awards in all counties because one sometimes finds that many such schemes are hijacked by different groupings, with the result that the money is not spent, value for money is not got and the proper aims of the scheme are never achieved.

Deputy Simon Coveney

In response to the Minister's comments, when a discussion starts on a subject, perhaps members should finish it rather than coming back to it. There have been many schemes, including the warmer homes scheme, the home energy efficiency scheme, formerly the greener home scheme and the new retrofit programme the Minister is discussing. In essence, this scheme is about upgrading the housing and building stock. We have had some detail on this discussion.

The Minister is right to go down the utilities obligation route. From speaking with the workers and home owners who have used the home energy efficiency scheme, the greatest obstacle is finding the money for the home owners' portion of the expenditure. They must borrow it or find €1,500, €2,000 or €2,500 to lever €800, €900, €1,200 or €1,500 from the grant aid. They cannot find that money at the moment and will not spend it, as people are nervous about digging into their savings.

Being able to pay over a long period through utility bills, be it electricity, gas or whatever, is a more attractive model for home owners. For this reason, companies like Bord Gáis are taking that route and putting in place a programme whereby people can pay through their utility bills. Encouraging households to pay over time is the way to go to avoid a situation in which they must find large lump sums to secure grant aid. Presumably, the idea is that they will see no increase or only a small increase in their bills. As they save energy, they are paying the energy bills plus a portion of the capital expenditure over time, which means they do not notice significant increases in expenditure. When the amount is fully paid off, there will be significant reductions in their energy costs.

The Department needs to get involved, particularly with State companies — the ESB is considering this matter — because utilities in Ireland are primarily provided by State-owned companies or, as in the case of water, State agencies. If we are serious about getting a large volume of homes and businesses into these schemes, it is the financial modelling around which people pay and the time period involved that will switch this initiative from being a middle class Ireland thing, where people can afford to put insulation in their walls and ceilings, to being something on which the majority of people will embark.

I encourage the Minister to go down this route and I understand it will take some time to set up, but it has implications for contractors and builders, as we do not want it to be the case that only the big guys, the large utility companies, can provide this service. Smaller builders would be at their mercy. If we are to reach the numbers the Minister has mentioned, this is the route to go.

The Minister's Department needs to speak with the Department of Finance. We cannot have a situation in which money is taken back by the latter if it is not spent by the former. However, it explains why the Minister has done so well out of the budgetary system. If his Department returned €35 million last year, a portion of that would be returned to it this year. It is false accounting. We should be judging ourselves on the output, not the Estimates. When discussing increases in expenditure, we are comparing this year's target with last year's output as opposed to comparing the two years' Estimates. It is disingenuous.

In terms of expenditure, the Department is focusing on upgrading buildings. In the private sector, houses and businesses do not have large lump sums of money to throw at the initiative. We need to change entirely the way in which we pay for things we should obviously be doing, given the climate change and energy efficiency dividends accruing from insulation, etc.

I encourage the Minister to include windows in the home energy efficiency scheme and retrofit programme. In an average house, 40% of the heat lost is through windows when they are closed. We should be trying to go beyond insulation, boiler systems and so on and include windows.

Deputy Liz McManus

Before we move on to the other items raised and to conclude the energy efficiency matter, will the Minister clarify the real situation as opposed to what the Estimates tell us? The former is markedly different. For example, the warmer homes scheme spent money successfully. The need is great and people are waiting in line for it. Is the Minister now saying that, if money is wanting, it will be found? Will the Minister provide the real estimate of how much money will go into the warmer homes scheme and how much will be taken from the €50 million for the retrofit scheme? Does he expect the retrofit scheme to start this or next year? Will a further €35 million from the €50 million return to the Department of Finance? There seems to be two parallel worlds. The first is that of the Estimates with which we are presented and the second is that of the Estimates at the Department. It is not enough to claim it is a demand-led scheme and, therefore, the Department will provide the money when it turns up. The Department is the strategic thinker. It must figure out the issue. Will the Minister clarify the figures? When will the retrofit scheme start and how much if any of that €50 million is likely to be spent this year? How will he ensure that the Department will not hand back a further €35 million in respect of energy efficiency at the end of the year? Is he even listening?

Deputy Eamon Ryan

Yes.

Deputy Liz McManus

I thank the Minister. Those are my questions.

Deputy Eamon Ryan

I am pleased by Deputy Coveney's comments. He is right, in that a real constraint has been getting anyone to spend money at a time when people have been in deep recessionary mode. It has been difficult. One of the reasons for switching to a retrofit scheme based on an obligation is that one can pay some of the capital amounts through one's bills. It is a useful way of getting over the hurdle. In other instances, we will continue to provide funding, particularly for public buildings and social welfare housing. On the warmer homes scheme——

Deputy Liz McManus

How much is spent on public buildings?

Deputy Eamon Ryan

That is what I am hoping to ramp up with the retrofit programme. We have only started.

Deputy Liz McManus

The retrofit programme, but nothing other than that.

Deputy Eamon Ryan

Last summer, we insulated schools through the summer works scheme. Projects have been done and exemplar projects have started within the Sustainable Energy Authority of Ireland, SEAI.

I do not have the end-of-year estimate for the warmer homes scheme. To answer Deputy McGrath, there are 23 community-based organisations. Where we cannot do something through a community-led scheme, we use private contractors. The initial budget allocation in this respect was €13 million, but this was not a constraint. We have co-ordinated further spending by the utilities, the likes of ESB and Bord Gáis. Their move into the space of energy service delivery was on the back of a Government initiative. Spending tends to be skewed towards the latter part of the year, particularly during summer, as we do not tend to carry out insulation work in the middle of winter. As I have told the SEAI, I want as many homes done as possible. We will re-examine the project in autumn as part of the overall fuel poverty response, as the warmer homes scheme has been an ideal response. It is better to give people the insulation to reduce their fuel usage than to rely solely on fuel allowances. The ambition or scale of development is not constrained by budget terms. It is constrained by getting the community operators and the private sector working in projects throughout the country. The budget allocation of €13 million is not a constraint because we will take further money from the retrofit scheme when we go through the €13 million barrier.

Deputy Liz McManus

Has the Minister any idea how much more?

Deputy Eamon Ryan

No. I will not know until later in the year when we know the exact level of spending. The spend for the first quarter or half of the year tends to be low because in the winter months, especially this past winter, people tended not to start projects or open their house to builders. It tends to be more skewed toward the latter part of the year. By and large, we are on an 88% profile at this stage of the year.

Deputy Simon Coveney

What does an 88% profile mean?

Deputy Eamon Ryan

It refers to capital as a whole across our base. The spend profile is set out and we are at approximately 88% of what we expect it to be for this time of the year.

Deputy Simon Coveney

We have 12% underspending on the Estimate so far this year. Is that correct?

Deputy Eamon Ryan

I am telling everyone to go out and spend because this is the best area in which to spend. It creates the right type of construction jobs.

Deputy Simon Coveney

We do not disagree with that. The only issue is the model of delivery.

Deputy Liz McManus

I do not want to dwell on this but I would have thought if the Department had ascertained by September that it would have to give back €35 million, it could have done the equivalent of the summer works scheme and ensured that money was spent. That is what happens in other Departments.

Deputy Eamon Ryan

We must be careful how we spend the money as well. We are spending public money and sometimes it is a short-term approach to simply throw money at a scheme and one might not get the best value for money.

Deputy Liz McManus

The Minister is throwing money at it by giving grants to people who have two Porsches in their front driveway. At issue is public sector investment.

Deputy Eamon Ryan

I defend the home energy saving scheme. Although it involves the private sector, it is delivering emissions reductions, greater energy security, new construction jobs and it is stimulating private sector spending, which is what we must do. I have been working on a home energy saving scheme for seven years and I am pleased that now we are doing in reality what we said we would do. I am satisfied with the scheme.

I am in the hands of the Vice Chairman in terms of how we go through the various sections.

Vice Chairman

Do committee members wish to go through it section by section or do they wish to put what they deem to be priority questions?

Deputy Simon Coveney

To be helpful, we started with the energy section. Perhaps we should kick on through the energy side and we can come back to broadcasting and communications afterwards. Are other Deputies satisfied with that approach?

Deputy Jimmy Devins

That is more or less how we are going as regards Votes.

Vice Chairman

We will do the energy section now?

Deputy Simon Coveney

Yes. We have started it so we should continue. It is useful to have the output document. If we simply examined the Revised Estimates without looking at the output document we would not have a clear picture of how the Department is performing. It is very helpful.

We have spoken about the energy savings scheme and I do not intend to dwell on it. There is a good deal of concern at the moment with regard to BER, building energy rating, certificates, especially for rented property, whether the new rules put in place are being followed and the numbers of rented properties in Ireland that have BER certificates. An enforcement issue arises in this regard. There should not be an enforcement State for BER certificates but we must encourage more adherence to the rules. Otherwise, we put at a disadvantage landlords who are trying to be responsible and who go to the expense of securing a BER certificate.

Deputy Eamon Ryan

BER certificates are one of the best vehicles towards getting the upgrade we need. If a landlord or property owner realises that the value of his or her property is increasingly dependent on it having a good BER certificate, it will be a stimulus to get people spending. The stronger we are, the better.

One example of the way in which we are improving or tweaking the home energy savings scheme is the move towards a scheme where one must have a BER certificate and a before and after test such that we can determine exactly the improvements in the building as a result of the work carried out. BER certificates will have an increasingly important role in the advertising of properties and the provision of State support, whether for rent allowance, grant schemes or funding for energy improvements in buildings. All such measures should be contingent on a BER certificate because it is a good tool.

Deputy Simon Coveney

That is the point I am making but the implementation of this approach is not really working at the moment. It is not enforced properly. Landlords who are acting as they should, that is, responsibly, are essentially being disadvantaged by spending more to attain a BER certificate while there is no disadvantage to landlords who do not. As a result, it is not a level playing pitch. This will change in time as we develop acceptance for BER certificates.

I refer to ocean energy. I welcome the Minister's plans for my constituency in Ringaskiddy on the site of the National Maritime College of Ireland. Those involved are very excited about it and I trust we can follow through on the expectations to create a real hub for ocean energy research. It is a positive development.

I refer to expenditure this year on ocean energy. The Minister stated that the 2010 output target is to make appropriate grant payments to 12 companies approved for support to develop ocean energy prototypes. How much money is actually being committed to that project this year? We have held discussions before about what has been promised to support ocean energy and what has been delivered. A figure of €27 million was mentioned at one stage but only a tiny portion of that has been delivered. We are getting to the stage with ocean energy where we hope we will soon see some output in terms of mainstream energy generation and a move from pilot projects to a commercial stage. I call on the Minister to answer that question.

It is clear the Minister has decided to spend no more money on The Power of One campaign. Does this mean that energy efficiency awareness campaign is ending? If so what is it being replaced with, if anything? I realise there was some duplication with regard to websites until the end of last year. Presumably that is now finished.

I refer to the biogas area. My understanding is that the Department was to be involved in an anaerobic digestion pilot project on the Kinsale Road landfill site in Cork but there is no reference to this in the Estimates. A figure of €4 million was supposed to match €4 million from Bord Gáis for that pilot project, in addition to some funding from Cork City Council. I am trying to establish whether that money is due to come from the Minister's Department or the Department of the Environment, Heritage and Local Government through a local government fund and Cork City Council.

Deputy Liz McManus

I refer to the Sustainable Energy Authority of Ireland. Is the Minister satisfied that there is sufficient staffing in that body to drive the energy efficiency and awareness programmes needed? I am concerned about where the problems lie with regard to the underspending. Will the Minister comment on this? The annual output statement mentions the climate change challenge, a major challenge for the Department. Is the Minister concerned that the Cabinet sub-committee, of which he is a member, has met so rarely? In 2008, it met six times and in 2009 it met only twice. I am unsure whether it has met yet this year. It was supposed to meet in June, so perhaps the Minister could tell us. Does he believe that is an appropriate response to the climate change challenge, because there is much concern? Members of the Joint Committee on Climate Change and Energy Security are extremely concerned that the issues seem to be disappearing off the Cabinet's list of priorities.

Deputy Eamon Ryan

I will go through the various points. In regard to ocean energy, I agree with the Deputy that it is right for the State to invest in what is still not commercial. The wave and tidal systems have improved significantly in recent years but it is a risky investment. However, it is right to take that risk because this is a country whose sea area is ten times the size of its land area and with the largest wave resource in the world. If we can crack this technology, it will be of huge benefit to the State. Even in the testing of that, there are spin-off benefits. There are other investments coming from the private sector to support what the public sector is doing, which is correct.

We have the advantage that what we are doing is on the basis of a good ten year programme set out three or four years ago. We reached the end of the first quarter a year and a half ago and said we would go to the next phase which included a series of measures providing for the prototype funding, which has been given where appropriate, building our grid connection out into the sea at Belmullet in Mayo, which we are progressing and want to progress fully, and developing our energy research centre, in particular in Cork with the marine testing site — the Deputy mentioned the maritime centre beside Haulbowline.

I stand to be corrected but I understand one of the other Departments involved in that is the Department of Enterprise, Trade and Innovation in that I believe it is included in the PRTLI 5 scientific research allocation. I understand that is where the primary allocation for that centre is located. Subject to PRTLI funding being available, I believe the other tranches of funding will be available to allow us to build the centre for which we are looking and which I support. I understand the PRTLI decision is reasonably close to being made. I hope it will be a progressive one.

It will be difficult because as one goes out into the ocean, it is a more expensive investment and people will query it. They will say times are tight and will ask why we are investing in what is still a more risky investment. The State must take a certain number of risky ventures where the potential pay-off in terms of economic development and energy security and the benefit in terms of developing engineering and research capability are considerable. If we were to turn our backs on that opportunity, we would be seen as a very regressive and not very progressive State.

In regard to Power of One, it is not being shut down. There was a real synergy in what was being done in the Department of the Environment, Heritage and Local Government and our Department in regard to the Change and Power of One campaigns. I was at an event two or three weeks ago in Dublin Castle about working with schools on the energy efficiency schemes. We are looking to consolidate the work between those two programmes. It does not have the same budget as times are tight. However, it is something I want to continue as appropriate but in conjunction with what is being done by the Department of the Environment, Heritage and Local Government.

Deputy Liz McManus

There is no budget.

Deputy Eamon Ryan

No. Between the SEAI's work and the Change campaign's work, there is still the capability to deliver the Power of One brand and message through a range of different measures.

Deputy Liz McManus

Money is being taken from the SEAI to run it.

Deputy Eamon Ryan

It is part of the SEAI's activities.

Deputy Liz McManus

Department money is not directly going to it.

Deputy Eamon Ryan

No.

Deputy Liz McManus

Will there still be two websites?

Deputy Eamon Ryan

I understand there is integration in regard to those websites. One often refers to the other in terms of providing expert advice.

In terms of the bio-gas issue Deputy Coveney raised, I met the engineer in Cork, who is very keen, and the academic, Jerry Murphy, in UCC. It is a very interesting prospect. I understand it is more research-oriented and there is an application in for PRTLI 5 funding. Is it looking for local council land close to the Kinsale roundabout using grass as a feedstock for anaerobic digestion?

Deputy Simon Coveney

Yes.

Deputy Eamon Ryan

Again, I am supportive of that. It is more research-oriented at this stage because they are looking to do something new and different in terms of anaerobic digestion but the primary call on that initially is on PRTLI 5 funding. We will have to await the outcome of that.

Deputy McManus referred to SEAI. What we need to do to meet our various energy efficiency targets, our renewable targets and our energy security ambitions is beef up SEAI further. It does not have sufficient staff to do that properly. It is a difficult time and it is hard to get people. I have looked for approximately 16 additional staff. I expect to be able to get them, possibly on a phased basis — eight and eight. It is not finalised yet as we only got the Croke Park deal through. It should be possible for us to get those staff quickly and to continue the good work SEAI is doing.

Deputy Simon Coveney

There is not a recruitment embargo there.

Deputy Eamon Ryan

I am very confident of reaching agreement with the Department of Finance to allow us to provide additional staff for the SEAI under the employment control framework.

Deputy Simon Coveney

The Minister did not answer the question about the windows.

Deputy Eamon Ryan

We looked at windows. I have always said I want to be careful with all these grants because sometimes one can kill an industry because people hold off and wait for something. I did not rule out or say we would consider windows further down the line. One of the reasons we did not initially include windows was that there is a very long pay back. The Deputy was right about the energy lost through windows but the payback on new windows is approximately 20 years. We decided to concentrate on certain investments which had a more immediate payback, including new boilers and controls, attic and wall insulation and so on. We never precluded it as a possibility that we would include it. I will continue to review it but the reason it was left out of the initial phase was that we believed we should try to target investments, where they were limited, at areas which had a more immediate payback.

Deputy Liz McManus

The Minister has not included floor insulation in retrofit.

Deputy Eamon Ryan

No.

Deputy Liz McManus

Is there is a reason for that?

Deputy Eamon Ryan

No. Again, I have to go back to SEAI. I am told we looked at it but that it is a similar issue in terms of the long payback period. We decided to concentrate on those that had a more immediate payback.

Deputy Liz McManus

It is not like windows. BER experts would tell one otherwise.

Deputy Eamon Ryan

I will provide the Deputy with details on our evidence or figures on that.

To go back to what Deputy McManus said about the underspend, the primary reason for our underspend in the energy area was that there was not as much demand as quickly as we expected for the demand-led schemes. The experience has been the same in the past. The greener homes scheme and the house of tomorrow scheme, which predated it, had a similar path. They were quite slow to take off in the first year or two following their launch but then they really took off.

Deputy Simon Coveney

Why allocate so much money in the first year if it will not be spent?

Deputy Eamon Ryan

I hoped we would spend the full amount. I went out to sell this as much as I could. It is the best investment one could make. It is one of the reasons one concentrates on a short payback period. For me, this is a no-brainer. One gets a payback and the State supports that with a grant scheme. It is a better investment than anything else.

At a time when we are saving 12% of our incomes, I would say to the public that rather than putting it into a bank, putting it into one's house is a much better investment as one gets a much better return. Ultimately, one will have a house which has a much better energy rating. When one comes to sell it, one will have to advertise that energy rate.

I would have expected take-up to have been stronger. It is really taking off now and there is a consistent level of applications for the greener homes scheme and the warmer homes scheme. The main demand-led schemes are now working much as we expected, although six months later than we thought.

With regard to the Government's approach to the Oireachtas Joint Committee on Climate Change and Energy Security, it is still central, particularly from the Green Party perspective. Our fundamental underlying political philosophy is that we must live within the resources of the planet and must direct our economy accordingly. The economic strategy of the State relates to this and economic opportunity lies in this area. The countries that are good in the clean energy area and good at developing a low emission digital economy will win.

Deputy Liz McManus

How come the sub-committee is not meeting?

Deputy Eamon Ryan

It has met this year.

Deputy Liz McManus

When did it meet?

Deputy Eamon Ryan

I am trying to remember, I think it was after the Copenhagen conference.

Deputy Liz McManus

It did not meet this year, unless it met within the past few weeks, in June.

Deputy Eamon Ryan

I will come back to the Deputy on the issue of the meetings. The primary response following the Copenhagen conference was to try and work out the direction we should take and following our Ministers' Council meetings both Deputy Gormley and myself have been briefing the Cabinet on a regular basis on our approach. The approach is not to change tack or show less ambition.

Deputy Liz McManus

I do not need to tell the Minister how to do his job. However, it does not inspire confidence if a specific Cabinet sub-committee does not meet on such a central issue. I do not doubt the Minister's commitment to this, that is not the issue. The issue is that the Government as a whole does not operate as a unit to tackle climate change and sort out the interdepartmental problems. The committee met six times during its first year, which sounds about right. That allows for a meeting every second month. However, the committee is not meeting at all now.

Deputy Eamon Ryan

I would like to make a point about what I and the Government are doing. One of the first things we have done — we just completed some work on this in the Dáil yesterday — is to put a price on carbon throughout the economy. This is important and is something everybody says we should be doing. It is significant that we achieved it this year. What I am doing now is trying to change our transport system towards a zero emissions system and we have made huge progress in the past six months on that. In the past two and a half years, we have also doubled the amount of wind power in our system, which again is of significant importance in moving towards zero emissions.

Deputy Liz McManus

I asked about a specific issue. I do not have any argument with what the Minister is doing and the progress being made is commendable. What I am concerned about are the structural problems within Government. We need to transform Government so that we will reach the required targets. This is not up to individual Ministers. Why does the Government not abandon the sub-committee if, as it appears, it is only an optional extra or why not make it work? I do not know what is the current policy but I share the Minister's concerns and commitment on climate change, as do many other Deputies and Senators. We find it worrying that the sub-committee, which operates at Government level, has not met.

Deputy Eamon Ryan

I am confident that the Government, through its actions, is showing it has real intent in this regard and that there is no lack of commitment to this task. The task is one that we will continue to push in the committee, which has a useful role, and through our budget process and every avenue we can follow because that is in the country's interest.

Deputy Simon Coveney

The Minister mentioned the work he is doing in the area of transport. I presume he is talking about electric transport. I cannot see the allocation of promised funding for this area in the Estimates for this year. There is a funding implication for the pilot project he is asking the ESB to roll out, in terms of charging infrastructure, and grant aid is also to be available for electric vehicles, to encourage people to buy them. Is this in the Estimates? Perhaps I missed it somewhere.

Deputy Eamon Ryan

The grant aid starts on 1 January 2011 and the vehicles are not available before then. I was in Japan last night and talked to people from Toyota, Nissan and Mitsubishi. We will also have talks with a number of other car companies from other countries over the next few months. The main vehicle that will be available initially is probably the Nissan Leaf. The company has committed to sending us 1,000 of those vehicles. This is not a low number when we consider that approximately 70,000 or 80,000 are sold annually. Looking at 2011, these 1,000 vehicles give us a good test quantity of vehicles to have up and running. These cars will not be available until December 2010 or early in January 2011 and, therefore, the grant scheme will not kick in until early 2011.

Deputy Simon Coveney

What about the charging infrastructure?

Deputy Eamon Ryan

That must be rolled out by the ESB in advance and it has already started on that.

Deputy Simon Coveney

Is the Government partially sponsoring that?

Deputy Eamon Ryan

No, that is a matter for the regulator and the ESB. To my mind, the infrastructure is an extension of the distribution network, just as the meter on a house is. The infrastructure should not be exclusive and we should have a number of different companies providing it. It should be open access but it is, ultimately, a matter for the utilities to roll it out, which they are now doing.

Deputy Simon Coveney

I could continue the discussion on that, but it would not be relevant to the Estimates.

Vice Chairman

Have we finished with the area of energy?

Deputy Simon Coveney

I will not go into a long discussion on electric transport, but have a question on public transport options for zero emissions vehicles. These are the norm in many countries. Deputy Micheál Martin returned from China recently and told us that in one of the cities he visited the entire public transport network was driven with either electric or gas driven vehicles. This is replicated in many European cities. Therefore, there is much we could be doing in terms of expenditure on public transport but that requires discussion between this Minister and the Minister for Transport. There is no reason, for example, all new buses being purchased could not be driven on gas, because we have the infrastructure to do that. However, this may be more a matter for the Estimates of the Department of Transport.

Vice Chairman

We will now deal with subheads A1 to A9.

Deputy Liz McManus

With regard to the moneys for consultancy services, how much of that money will be spent on consultants brought in to deal with the IRFU issue? How much will the fig leaf cost?

Deputy Eamon Ryan

We do not have an exact figure because we are tendering for it. Judging on previous experience, I estimate it will cost approximately from €60,000 to €70,000 for that project.

Deputy Simon Coveney

When does the consultation process for that conclude?

Deputy Eamon Ryan

It concludes on 4 July. The original consultation process was extended by a month. I had a meeting with the IRFU, the Six Nations and the ERC at which they asked for an extension, to which I agreed.

Deputy Simon Coveney

Why then is there a need for consultancy services once the process has finished? Why do we need a consultancy company to come in then?

Deputy Eamon Ryan

We need it to examine the submissions and evaluate the various arguments and the economic and complex broadcasting aspects.

Deputy Simon Coveney

Does the Department not have the capacity to do that?

Deputy Eamon Ryan

It does, but we can benefit from getting outside assistance as well.

Deputy Simon Coveney

I find that extraordinary.

Deputy Liz McManus

It is called a "lifeline".

Vice Chairman

We will move on to communications, subheads B1 to B4.

Deputy Simon Coveney

Before we move on, a figure in subheads A1 to A9 relates to incidental expenses. This has increased by 30% and is one of the larger figures and is separate from salaries. Will the Minister explain what that is? A large portion of it seems to be for entertainment. I am not trying to play politics here. I am curious why we are budgeting for entertainment. Are we planning to organise conferences?

Deputy Eamon Ryan

I will give the details. I do not think it is expenditure on entertainment, whatever else it is on.

Deputy Simon Coveney

I did not pluck it out of the air.

Deputy Eamon Ryan

The figures are broken down between staff training at €300,000, conferences, meetings expenses, €93,000, advertising and exhibitions, €117,000, public relations, including sponsorship, €120,000, publications, €30,000, official entertainment, €8,000, recruitment costs, €5,000, translation and interpretation services, €40,000, legal fees, €444,000, and other expenses, €338,000.

Deputy Simon Coveney

I do not see how the figure of €8,000 for entertainment is arrived at because we have a figure of €32,000. This is listed on the detail of certain subheads, incidental expenses, entertainment, €32,000, staff and training, €430,000 and then, other.

Deputy Eamon Ryan

Perhaps two of those figures were put together to form that amount.

Deputy Simon Coveney

It is presumably a case of conferences being linked or some such reason.

Vice Chairman

Communications, subheads B1 to B4.

Deputy Jimmy Devins

I asked the Minister two questions and I am under a little time pressure because of another engagement. Perhaps he might reply to my questions.

Deputy Eamon Ryan

I am informed that figure of €32,000 includes a series of those different items.

The national broadband scheme is broadly on target. There is a mechanism of force majeure in the scheme if there are particular difficulties. The weather in the first quarter of this year has contributed to a five-week delay. A total of 70% of the districts are covered and we are on target for the end of this year on having everything covered.

There are benefits to the broadband scheme and individuals benefit greatly from having access. To my mind there is a broader, long-term benefit in that it is improving the overall core network and development in regions of the country that otherwise would not have had such investment. It is not an insignificant investment as it amounts to approximately €250 million, targeted towards the north-west, west and south-west regions in particular. It is also ramping up. Within its timeline there was a provision for an increase in speeds and this is happening. I was talking recently to BT which is involved with 3 in the provision of that back haul to the network. It is fairly advanced technology but it is working in the way we would expect it. There will be individual cases where things have to be tweaked or changed but, by and large, it has been investment that has done a lot for rural Ireland and which is doing the job it was given to do.

RURAL LINK has indicated there are about 12,000 houses which are not covered due to the nature of the European rules to do with the development of the national broadband scheme. This is why we have committed to developing a further scheme to make sure that every single house is covered or has available broadband. Each house will need to be identified and targeted and arrangements will need to be put in place. I presume it will be more satellite-orientated but will be technology-neutral. Given the nature of the housing and the difficulty with accessing broadband, it may be a satellite solution. New satellite technologies are showing much faster upload and download speeds. While satellite in the past was constrained in speeds, it is improving. We are looking to roll out that rural broadband scheme to ensure that every single house is covered.

Deputy Devins asked me about the scheme for national schools which is related to the issue of satellite. Every national school is covered under the national broadband scheme. A large number of the rural national schools were covered with the satellite option. It was not as satisfactory a service as I would have liked with regard to the level of speed in the first phase of the scheme, two or three years' ago. However, we are providing such a broadband service to the national schools and I am looking for some improvements in the technology and in satellite in particular, to assist in the level of service.

We are putting out 100 megabit connectivity speeds to secondary schools and this should be regarded as the start. This has been commonplace in schools and in businesses and homes. As this evolves we will need to cover our secondary schools first and continue to improve the provision of service to our national schools because good broadband connectivity will be the equivalent to providing chalk to the school. It is the basic service that schools need to do their job.

Deputy Jimmy Devins

It is not the case that the national schools have bad broadband speed; it is that some of them have appalling speeds as we speak. I have written to the Minister recently about a particular school but I understand the problem is much more widespread than he is indicating and it is unacceptable in 2010.

On the question of the provision of broadband for houses in designated areas, in 2008 the Department carried out a mapping exercise. Unfortunately, we now know there were some weaknesses in that mapping exercise and that certain areas were mapped as being able to receive broadband and which, patently, is not the case now. What can be done now in 2010 to get over the problem of houses that are outside the NBS and are not getting broadband even though, officially, they are designated as being in receipt of broadband? I am aware the Department is looking at carrying out some sort of scheme which will service rural premises which are outside the NBS. The reality is that people are crying out for it now. They are being told on the one hand that they have broadband but, in reality, they do not have broadband. Can the NBS be extended to them now or what can the Minister do to get these people broadband, which is their entitlement in 2010?

Deputy Eamon Ryan

The Department is devising a scheme which is a rural broadband scheme to get to those last houses. We have gone to Brussels and have been given approval for the nature of the scheme and the funding for it. This scheme will be supported under the European economic recovery plan. A total of €13.5 million in funding from Europe will be available to fund the scheme and we will be required to match 25% which will bring it up to €18 million approximately. We have to spend this funding by the end of 2012. That is the timescale we have set to reach every one of those houses.

One of the difficulties will be identifying and persuading the households to take part in the scheme. This is not a mapping exercise but rather a case of logistics, of targeting the housing and getting the householders to participate in the scheme. The mechanism is currently being devised in the Department. One of the advantages of the European funding is that it is time-constrained for all expenditure to be expended by the end of 2012. We hope to get to every last house in the country within that timeframe.

Deputy Jimmy Devins

I understand the difficulties in getting to every house but in the situation where a householder has come forward and announced the house is not getting broadband, does he or she have to wait until 2012 or can something be done now?

Deputy Eamon Ryan

We will have to start the scheme well in advance of 2012. If a house can be identified immediately then it will be much easier for it to be included as soon as this scheme is up and running.

Deputy Liz McManus

I suggest that if the Department adopted the unique identifier postcode system, it would have solved the problem.

Deputy Eamon Ryan

I agree and I hope we will be able to have a code in place in such time to allow us match the two together. That is a perfect example of where a unique identifier code could be very beneficial.

Deputy Liz McManus

At the moment the Minister seems to have both approaches in his sights, namely, the cluster system and the unique identifier. That does not make sense to me.

Deputy Eamon Ryan

I think it can work. At all stages I have said that it must be both. We must have a house identifier as well as a postal code system for postal deliveries.

Deputy Liz McManus

Has the Minister spoken to the Data Protection Commissioner?

Deputy Eamon Ryan

Yes.

Deputy Liz McManus

Did the Minister get his agreement?

Deputy Eamon Ryan

Yes, subject to no inappropriate privacy breaches.

Deputy Liz McManus

So it will not be public.

Deputy Eamon Ryan

No, but it could be used in a range of different applications as long as it is done appropriately.

Deputy Liz McManus

This is not the time to explore the issue but I would be grateful if the Minister would send us a note on it.

Deputy Simon Coveney

It is crazy to have a unique identifier system as well as having a regional or area based postcode system. The unique identifier system does both jobs. I do not see why we would spend significant sums of money duplicating what could be done by one system. That is a different issue.

I find it difficult to accept that there will still be houses in this country that cannot get broadband in two years' time. I also find it difficult to accept that we are now trying to put in place a second national broadband scheme, NBS, essentially to deal with regions that we did not deal with in the first national broadband scheme. The whole point was that the national broadband scheme contract would deal with houses that could not get normal commercial broadband in terms of availability. Now we find that there are approximately 12,000 houses that were not addressed. The Minister indicated that constraints imposed by the European Union were the reason we could not address them under the first national broadband scheme but we have received European approval to do that now. If it is the case that 12,000 houses cannot get broadband we need to design a new scheme for them. That says a lot about the failings of the first NBS with the 3 company. We spoke openly about that previously. The Minister said clearly on the record dozens of times that the national broadband scheme was about providing ubiquitous broadband across the country for everyone who could not get it. Now we are openly admitting that approximately 12,000 houses cannot get it and we must design a new scheme. Pretending there is an upside to that and that we can get €13 million from the European Union is a red herring.

I accept it is not an easy problem to solve but technology is available to do it. Our discussions on broadband should not solely be about ubiquitous broadband to everyone and the number of people wanting to use and using broadband. The main discussion now must be about speeds. The Minister outlined the figure that 68% of houses and 72% of SMEs now have between 2 MB and 10 MB per second. Perhaps the Minister can give us the current average broadband speed. I estimate that a small portion of the 68% of homes or 72% of SMEs have 10 MB per second. My understanding is that the average speed is much closer to 3 MB per second. When one compares those speeds with our competitor countries, both in Europe and within the OECD, this country's standing is nothing to be proud of. Everyone would accept that.

Does the Department have plans to consider public private partnerships or to work with companies such as Eircom, for example, which is under new ownership, to try to replace copper with fibre in the way that is planned in the United Kingdom, Australia, New Zealand and parts of Canada where the state is getting involved in partially sponsoring or subsidising or through regulation supporting the increased use of fibre into people's homes and businesses especially in urban areas? Fibre is not the answer to everything but it is something on which we need to be much more proactive. Perhaps the Minister could indicate how many of the metropolitan area networks, MANs, are still not connected to any backbone and still are not lit up.

The postcode system comes under the communications heading. Perhaps the Minister could give an indication of what he expects the introduction of the postcode system to cost. We have changed a number of times in terms of what will be provided and now the Minister is talking about a system that provides both an area based postcode system for delivery and then mapped on top of that we will have a unique identifier system that will only be available to certain restricted users.

On the broadband scheme for schools, have all 78 secondary schools been linked up with 100 MB school broadband? Is there a figure for the expenditure in 2010 for the 100 MB per second school broadband network? I do not see it in the figures I have. Perhaps the Minister could indicate how much money has been spent on that this year.

Deputy Liz McManus

What does the Minister intend to do about the one in four businesses that are dissatisfied with the Internet services they receive? He made a commitment to carry out a survey on broadband speeds. Perhaps he will elaborate on that issue.

On the information society and e-inclusion, there is a very big drop in funding in the area. It has almost halved. As I understand, that is a grant scheme. Does the Minister intend to wind up that project and will it be brought to an end following an assessment?

Deputy Eamon Ryan

I missed the start of Deputy McManus's contribution.

Deputy Liz McManus

I am concerned about businesses that are dissatisfied with the broadband service they receive. The Minister indicated that he would initiate a survey on broadband speeds. Perhaps he can clarify the situation in that regard.

The second point relates to subhead B4, information society and e-inclusion. That fund has almost halved. From the Minister's statement it appears that the grant system is being closed and that an assessment will be carried out. Is it correct that the money will be spent in that way and that the scheme will come to an end?

Deputy Eamon Ryan

I would not like the point to go uncorrected, in terms of the national broadband scheme; it covers a wide area, including large areas of County Mayo and County Donegal. Competition rules apply when one provides that type of service. Given state aid rules one can only apply such schemes when the market is not functioning effectively. That is the reason it did not cover all areas.

Deputy Liz McManus

Valentia was not covered.

Deputy Eamon Ryan

No, the area covered was based on electoral districts but it was done in accordance with the European Commission so that it would not breach state aid rules but would allow us to cover 99% of the country. I am pleased that we are going further now and getting to the remaining houses which we could not do under state aid constraints.

Deputy Simon Coveney

I do not understand how the Minister can do it now when he could not do it previously.

Deputy Eamon Ryan

It is because it is likely that one of the developments is to be satellite based so it will come from the house.

Deputy Simon Coveney

The national broadband scheme also had a satellite element to it. We discussed that.

Deputy Eamon Ryan

It did, but as a backup solution. In this instance, which will involve major logistical work, we will target individual premises in the rural broadband scheme which are in the circumstances outlined by Deputy Devins and do not have access to a service.

Deputy Simon Coveney

Why could that not have been done through the national broadband scheme first time around?

Deputy Eamon Ryan

First, we did not want to be prescriptive as to what type of technology was open. We were examining DSL and fixed wireless.

Deputy Liz McManus

The point is that the maps were not accurate.

Deputy Simon Coveney

That is what the tender was all about.

Deputy Eamon Ryan

The maps were prefect and did their job in designating areas where we could roll out broadband. We now have a scheme going to those houses in the scheme and outside it.

I accept there are exceptions such as a house being in a particular hollow or being surrounded by trees that prevents broadband coverage, even in areas covered in the national broadband scheme. There is a case for this further scheme, for which we have EU support, to target individual houses. One scheme is targeting an area while the other is targeting specific houses.

Broadband speeds are important but so too is ubiquity, ensuring everyone has access if they need it. In the past several years, people have seen the benefits of and begun to use mobile broadband through a range of devices such as an iPhone.

Sitting suspended at 11.50 a.m. and resumed at 12.10 p.m.

Vice Chairman

I welcome everyone back. We will resume.

Deputy Eamon Ryan

Deputy Coveney asked about the importance of broadband speeds. I agree that speed is important, as is ubiquity. We are starting to see speeds improve. The policy approach of driving competition and Government investment to improve services is working. A cable company has made a significant commitment to start rolling out 100 MB connectivity to its base this summer. This represents a significant increase in speeds. It is quantum. It is also significant that Eircom, probably driven by a competitive instinct, is seeking to match that by rolling out a high-speed fibre optic network starting with certain areas. Eircom and ComReg have agreed considerable changes in the former's wholesale operation system.

Other operators I recently spoke with believed there would be a massive jump in speeds because a large tranche of housing is using local loop unbundling, LLU. In terms of the national broadband scheme, the technology for mobile broadband speed is improving as technology improves. The same applies to a range of other applications I could discuss. We are seeing fruit being borne from some of the policies on which we have delivered, particularly our encouragement of private sector investment and competition.

When I try to simplify how this policy works best, I refer to it as simultaneously being a collaborative and competitive approach. Sometimes, the investment case for next generation networks is not easy. The commercial return from some higher speed networks is not immediate or obvious. Ultimately, we need higher speeds because they are economic drivers. A modern economy looking to develop services and trade with the world needs high speeds. Collaboration will increasingly be the approach because service competition is one of the developing trends. A genuine wholesale proposition is a range of revenues going to an operator from retail competition close to the customer level.

I have continued speaking with Eircom during the change of ownership in the past year. The new owners bring with them real experience in higher speed networks, which will be useful. After a series of owners who took a short-term approach, that the new owners seem to be taking a long-term approach is welcome. I have been telling them that the Government will continue to work closely with them and do whatever we can to assist in the development of next generation networks in a properly regulated competitive market.

In terms of collaboration, there was an opportunity for such fixed-line companies and other operators to determine whether there was a case for co-investment to try to deliver some of the difficult investments that need to be made. The Telecommunications and Internet Federation, TIF, has done good work recently. Its report on next generation broadband was positive. When I addressed the TIF at its recent annual dinner, I ruled nothing out in terms of what we must do to get the high-speed networks required. However, it must be done through a regulated market and in a way that does not discourage or stop the crucial private sector investment. It must also promote a collaborative and competitive approach.

Deputy Simon Coveney

We are tight for time because there will be another vote in ten or 15 minutes, after which we will not have a room.

Vice Chairman

We could continue this afternoon.

Deputy Simon Coveney

I would rather not if possible. We could have a longer debate on the Government's next generation broadband strategy. Companies we hope will invest in our infrastructure to improve broadband schemes are not happy with the uncertainty surrounding the Government's approach. The Minister telling people he would rule nothing in or out in terms of Government involvement in infrastructure is the problem. We have no certainty. I accept he is examining the issue all the time and the collaborative approach sounds great, but we need certainty on what the Government has ruled in or out in terms of its investments, the type of regulatory model and how spectrum allocation and everything else coming down the tracks will be handled. There is significant uncertainty in the industry.

I have met Eircom and its new owners and managers. The company looks to be in better shape than it was one year ago. Eircom's owners have an expansion programme, but they concede that they cannot provide the kind of infrastructure required across the country because there is no commercial case for it. Unless there is State involvement in a partnership approach, it will not occur in certain areas. The previous urban-rural divide in broadband speeds will continue.

The Minister needs to start ruling things in and out instead of telling TIF conferences that he is considering matters. Other countries are making definitive decisions on the investment proposals in which those states will get involved while maintaining competition, in which I am a great believer, in the market sectors where it is appropriate. The impression being given is that events are occurring on their own. What UPC is doing is welcome, but it is not thanks to any policy we have introduced. It is trying to get a head start on companies such as Eircom which will replace copper with fibre in time.

With regard to local loop unbundling, LLU, one can only do so much with copper wired into a building in terms of broadband speeds. LLU would be a far more powerful tool if we could replace copper with fibre. There remains a whole series of matters on which the Minister must make definitive decisions in terms of what the State will and will not get involved in and in terms of subsidising roll out. This issue as well as the issue of spectrum allocation are the areas in which the industry needs certainty if it is to make a case for significant investment programmes in Ireland.

Vice Chairman

Unfortunately, the clerk has informed me that we must vacate the room now because we only had it booked for a certain amount of time. If we wish to return, the room will not be available until this afternoon at 4.30 p.m.

Deputy Eamon Ryan

I understand a vote will take place in 20 minutes. I trust it would not be used in the interim. If there is any way we could get the business finished this morning, it would be preferable for all Deputies and the officials concerned. Half my Department is here so it would be very beneficial to conclude our business this morning if we could.

Vice Chairman

The difficulty is another committee is due here at 12.30 p.m.

Deputy Liz McManus

I have only two questions to put.

Vice Chairman

In fairness to the clerk, she booked the room and talked to the relevant people. She has been asked to vacate the room. There must be some changeover time and another committee will sit here at 12.30 p.m.

Deputy Simon Coveney

Could the clerk examine the possibility of whether the next committee might not start on time because of the fact that we are likely to have a vote in ten minutes?

Vice Chairman

She has exhausted everything. This woman is very thorough and looked into everything and she has the matter sorted out. She does not come in here willy-nilly. In fairness to her, she has the whole thing worked out and she maintains the best she can do is a room at 4.30 p.m. What do committee members propose to do? There has been a fair discussion on the matter. We have been here since 9.45 a.m. I have no problem and I could stay for the whole day but the Minister and the committee members have covered a good deal of ground already.

Deputy Eamon Ryan

We have five or six minutes. We can check to see if the other committee is there.

Deputy Liz McManus

I have two brief questions on the Estimates.

Vice Chairman

Sorry, I am not having it. The room is booked, Deputy McManus.

Deputy Liz McManus

Yes, but it is only 12.25 p.m. I seek to have two questions answered.

Vice Chairman

There must be a changeover.

Deputy Liz McManus

A changeover? Please.

Vice Chairman

These are the rules of the House according to those who run it. If we were in the same position as the committee coming in at 12.30 p.m., we would expect to be afforded the same courtesy.

Deputy Liz McManus

None of us is available to come back at 4.30 p.m. to deal with these minor matters.

Vice Chairman

I offer my sincere apologies. I did not foresee the meeting would end this way but unfortunately this is it.

Deputy Simon Coveney

Will the Minister provide answers in writing to questions we raised earlier in respect of DTT, digital terrestrial television, funding in particular?

Vice Chairman

There should be no problem with that.

Deputy Simon Coveney

If I get answers to those questions, I would be satisfied to leave it at that.

Deputy Liz McManus

We also need answers on why inland fisheries reforms have only yielded a 6% reduction.

Vice Chairman

I thank the Deputies. That concludes the select committee's consideration of the Revised Estimates for the Public Service for the year ended 31 December 2010, Vote 30 — Communications, Energy and Natural Resources. On behalf of the select committee, I thank the Minister and his officials for attending today.