I thank the Chairman for giving me the opportunity to introduce the 2012 Estimate for the Department of Communications, Energy and Natural Resources.
The gross provision of more than €437 million represents a decrease of 2% over last year's outturn. The net provision is €193.7 million, or a reduction of 8% on the 2011 outturn. Although the Vote is small in terms of overall Government expenditure, the areas it encompasses are key to economic and social development. The vast bulk of capital investment in energy is funded by the commercial State bodies under the aegis of the Department and, in telecommunications, by the private sector. This investment is not encompassed in this Estimate.
The Estimate reflects an increase of 3% in gross current expenditure and a decrease of 16% in gross capital expenditure. The latter reduction reflects a contribution to the overall downward adjustment of €750 million in capital expenditure which is necessary in order to meet our fiscal targets in 2012. The increase in current expenditure is off a 2011 base which involved savings of €14 million on the 2011 Estimate. The 2012 current Estimate, therefore, is €3 million below the 2011 Estimate. Almost €95 million is provided for expenditure in the energy area, the bulk of it for investment in energy efficiency schemes. This expenditure has the dual effect of maintaining badly needed jobs in the construction sector while also promoting environmental sustainability and assisting energy affordability.
A first-class communications infrastructure is also critical for economic growth and recovery. Ireland has an excellent record in attracting key multinationals in the digital and ICT sectors. This has undoubtedly been facilitated by recent improvements in our communications infrastructure. Notwithstanding recent improvements, Ireland needs to further progress to a world class broadband infrastructure. Although broadband services will be delivered primarily through private investment, the 2012 Vote provision will fund enhancements to our broadband infrastructure. Efficiency and effectiveness in the delivery of public services is critically important. My Department prioritises the best use of resources. This year the Estimate presents for the first time key high level output and impact indicators across the various sectors, as the Chairman indicated.
I will take the sub-committee through some key details of the Vote. The administrative budget provides, among other matters, for the salaries and associated costs of the staff of the Department. It also covers the engagement of consultancy expertise, the ongoing implementation of the Department's information technology strategy, staff training and development and value for money and policy initiatives. The increase of 10% in the 2012 administrative budget provision, in comparison with the outturn for 2011, masks the fact that the 2012 provision is at the same level as the corresponding 2011 Estimate even though the 2012 Estimate includes an additional provision for preparations for the EU Presidency. The low 2011 outturn reflects the efficiencies being driven by my Department and the focus on achieving value for money.
The total spend on the administrative budget was €40 million in 2007 but had decreased to €22.4 million by 2011. This represents a reduction of 44% over a four-year period. This partly reflects the transfer of some functions but mostly arises from a reduction in the Departments staffing resources from 339 at the end of 2007 to 243 at present. This represents a reduction of 96, or 28%. The Department has continued to oversee and implement a wide range of new and existing programmes, undertake certain regulatory functions and provide policy advice across its wide brief. Productivity will have to be further reinforced in 2012 and coming years. In this regard, the Department has embraced shared services in information and communications technology with the Department of Agriculture, Marine and Fisheries and in payroll services with the Department of Finance. Despite the restrictions on numbers, the Department must be resourced as well as possible to implement its complex and wide array of tasks while discharging its heavy EU Presidency burden in the first half of 2013. The Department will fill vacancies on a targeted basis within its employment ceiling over the rest of this year.
Some €28.6 million is being provided in 2012 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 on broadband provision in recent years. The number of broadband subscribers in Ireland has increased from 437,000 to 1.66 million over the past five years. By the end of 2012, almost one third of homes will have access to speeds of 100 megabits and basic broadband services will be available to all. It is estimated that almost 50% of the population will have access to speeds of 100 megabits by 2015. The estimated broadband household penetration rate is now 55.4% compared to 39.6% five years ago. Some 71.8% of homes and 88.5% of small and medium-sized enterprises are using broadband speeds between two megabits and ten megabits while 21.3% of homes and 5.4% of SMEs subscribe to services greater than ten megabits. While the bulk of this improvement has resulted from private sector investment, over €13 million is being provided in 2012 for Government investment in broadband infrastructure. Following the completion of the roll-out of the national broadband scheme network in October 2011, every part of Ireland has a broadband service available from at least one service provider. This is ahead of the 2013 deadline that was set by the digital agenda for Europe. Despite Government and private investment in broadband, there are isolated cases of premises throughout the country - it is estimated that less than 1% of premises are affected - being incapable of receiving broadband services for technical and other reasons.
The rural broadband scheme aims to provide a basic broadband service to individual unserved rural premises that are outside the national broadband scheme areas. Funding of €3 million is being made available this year for the scheme under subhead A3. The response of the industry to the scheme strongly suggests that the offer of basic broadband services is widely available from at least one existing technology platform. It is not possible to be definitive about the issue until the verification process which is under way is completed by the companies involved, but it is expected that a very significant number, if not all, applicants under the scheme will be capable of being served by commercial operators arising from the verification phase of the scheme. If any applicants remain unserved after this phase, a service will be procured by my Department. Our target is to have this rolled out by the end of the year. As we try to create a knowledge society, we must enable our schools to ensure our students have first-class digital skills. Some €5 million is being provided in 2012 under subhead A3 towards the phased national roll-out of 100 megabits broadband to 200 post-primary schools. This project, which is progressing in conjunction with the Department of Education and Skills, will see a 100 megabits broadband service installed in all post-primary schools by the end of 2014.
The report of the task force on next generation broadband, which I chaired, was published recently. The report highlighted the likely investment developments in this area over the next eight years. It also recommended measures to help accelerate private sector investment and highlighted the role of the State in addressing infrastructure deficits. I will bring proposals for a national broadband plan to the Government shortly, with a view to agreeing a comprehensive set of policy actions to underpin the provision of high speed broadband services on a national basis. This is a key priority. A particular challenge will be the source of funding to address gaps in high speed coverage in areas the market may deem to be commercially unviable.
Provision is also made under subhead A3 for the introduction of postcodes. This complex national project has the potential to deliver significant economic and social benefits. In particular, it can assist service providers in delivering a better service to their customers nationwide. Some €8.4 million, including capital carryover of €800,000, is provided in 2012 under subhead A4. Some €3.5 million of this 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 70 companies with approximately 800 employees.
A provision of €4.4 million is being made towards the operating costs of the National Digital Research Centre to continue the development of translational research projects in the digital media field. Some €514,000 is allocated for digital engagement, of which €285,000 is for the payment of the balance of grants due to projects under the Benefit 3 inclusion grant scheme, which is providing basic digital literacy training all over the country. Some €950,000 million is provided in subhead A5 for the information society. This will provide for initiatives in relation to the exemplar network, cyber-security and the emergency call answering service.
Subheads B3 to B7 provide €249.095 million in respect of the broadcasting sector in 2012. It is estimated under subhead H4 that 2012 broadcasting licence fee revenue will be €222.130 million. This amount will provide grant-in-aid of €185.724 million to RTE under subhead B3, cover licence fee collection costs of €12.457 million under subhead B4, make a contribution to the grant-in-aid funding of TG4 of €9.245 million under subhead B5 and provide over €14.704 million for the broadcasting fund under subhead B6. The total provision for TG4 of €33.585 million, which includes direct Exchequer funding of €24.340 million, under subhead B5 will allow TG4 to maintain and further develop its Irish language schedules. Some €2.625 million is provided in subhead B7 for digital terrestrial television costs associated with the need to inform the public about the closure of analogue television services on 24 October next and its replacement with the new digital system. I intend to take my holidays on 25 October, Chairman.
It is appropriate in this context to refer to the financial difficulties facing RTE. The company faces a serious financial situation arising from accumulated deficits in recent years and a projected deficit of €57 million this year. A significant part of the 2012 projected deficit is due to a restructuring programme which will deliver significant savings in future years. RTE aims to break even in 2013 and this target must be achieved as the current loss-making trend is not sustainable. It should, however, also be acknowledged that RTE has funded from its own resources and through borrowing the capital costs of the new DTT network. Apart from providing greater choice and quality for free-to-air television viewers, this investment will also release valuable spectrum for high quality mobile broadband. This is a valuable digital dividend and I commend RTE on its investment and on the role it is playing in informing people in regard to the analogue switch-off and the introduction of digital television.
Under the energy programme, the Vote makes provision for a spend of €95 million in the energy area. Funding of over €80 million, including capital carryover, has been allocated in subhead C4 for the better energy national retrofit programme and for energy efficiency upgrades in the domestic, commercial and public sectors this year. This funding will achieve energy savings of 433 gigawatt hours, with an estimated monetary saving of €28 million. It will provide 17,000 low income homes with energy efficiency measures, with estimated energy savings of 35 gigawatt hours and monetary savings of €2.4 million.
The programme for Government commits to a shift from State supports for energy efficiency by the end of 2013 towards a pay-as-you-save scheme. My officials are working on the development of a national pay-as-you-save framework. Over €1.8 million is allocated for the electric vehicle programme.
Some €8.3 million is provided in subhead C5 for energy research and some €2.9 million is being provided for ocean energy in 2012. Ocean energy, while still very much at the research stage, can contribute to Ireland's renewable energy targets and also has potential for inward investment and enterprise activity.
There is a provision of over €30 million in 2012 for the natural resources area. Nearly €1.4 million is provided in subhead D3 for petroleum services. While the Irish offshore has recognised potential as a petroleum producing area, it is relatively unexplored and, as a result, its petroleum potential is largely unproven. My Department takes a proactive approach to promoting the opportunities for exploration investment, both offshore and onshore Ireland, and the outcome of the recent Atlantic margin licensing round, while encouraging, was still relatively modest. More exploration effort, in particular exploration drilling, is needed if the petroleum potential of the Irish offshore is to be realised.
I thank the sub-committee for its recent report on offshore oil and gas exploration - perhaps the opportunity will arise for an exchange of views with the sub-committee on it. The Minister of State, Deputy Fergus O'Dowd, and I look forward to engaging with the findings and recommendations of the report in the weeks and months ahead.
Subhead D4 provides funding of over €4 million in respect of mining services in 2012. This includes some €800,000 in respect of rehabilitation works at Silvermines and over €1 million for health and safety works in Avoca. The provision of €2.138 million under subhead D6 will fund a range of multi-annual initiatives in the geoscience field. Subhead D7 provides €3 million in 2012 for INFOMAR, the successor to the Irish national seabed survey. Subhead D8 provides for the payment of grant-in-aid of €8.466 million to Ordnance Survey Ireland.
Some €33 million is provided for the management of Ireland's inland fisheries resource. This includes €28.5 million for the operations and activities of Inland Fisheries Ireland, including salmon management and operations under the water framework and the habitats directives. Some €2.6 million is being provided as the State's 50% contribution to the operational costs of the Loughs Agency, a North-South body with responsibility for the conservation, protection and development of fisheries and aquaculture in the Foyle and Carlingford loughs.
In conclusion, the overall Vote provision for my Department is comparatively small. The areas we deal with are, however, of major strategic importance and complex in nature. Energy and communications infrastructure and costs are a key component of the competitiveness mix. Broadcasting is critically important from an economic, social and cultural viewpoint and it also provides a key platform for open debate and discussion that is important in nurturing and promoting our democracy. Finally, we must try to exploit our national resources in a sensitive and sustainable way while ensuring an economic and social benefit from them. I thank the Chairman and look forward to the contributions from the sub-committee.