I welcome the Minister and his officials. The proposed timetable, which was circulated to members, allows for opening statements by the Minister and Opposition spokespersons, followed by an open discussion on individual Votes by way of a question and answer session. Is that agreed? Agreed.
Estimates for Public Services, 2001.
Vote 1 - President’s Establishment.
Vote 2 - Houses of the Oireachtas and the European Parliament.
Vote 4 - Ordnance Survey Ireland.
Vote 6 - Office of the Minister for Finance.
Vote 7 - Superannuation and Retired Allowances.
Vote 8 - Office of the Comptroller and Auditor General.
Vote 9 - Office of the Revenue Commissioners.
Vote 11 - State Laboratory.
Vote 12 - Secret Service.
Vote 15 - Valuation Office.
Vote 16 - Civil Service Commission.
Vote 17 - Office of the Ombudsman.
The purpose of my appearance before the committee today is to introduce the year 2001 Estimates for the Finance group of Votes, excluding Vote No. 10, the Office of Public Works, which I understand will be taken later by the Minister of State at the Office of Public Works, Deputy Cullen.
The Finance group of Votes which we are considering today comprises 12 Votes amounting for 2001 to almost £523 million. The Vote for the Office of the Revenue Commissioners is the largest Vote in the group at £217 million. The Vote for Superannuation and Retired Allowances amounts to £129 million while the Vote for my Department is about £92 million.
My Department has already provided members of the committee with background briefing on the Estimates which are before you for approval today. I look forward to having a constructive discussion with the committee and I will be glad to provide any additional information members may require.
Before dealing with the Estimates for the individual Votes, I will comment briefly on the economy and the overall state of the public finances. The economy has grown exceptionally strongly in recent years. My Department's budget day forecast for GNP growth this year was 7.4% which, although lower than last year, is still well above the expected EU average. Employment continues to grow strongly with a net increase of 80,000 last year. This strong employment growth has resulted in low levels of unemployment. The unemployment rate stands at 3.7%, well below the EU average of 8% at present.
The Government finances are also in a very healthy state. Significant budget surpluses have been maintained since 1997 and the plan is to continue to run significant surpluses in the future. The debt to GDP ratio has been substantially reduced to below 40% from the 90% plus levels seen a few years ago. As members will be aware, significant provision for future pensions liabilities has also been made.
However, the current economic environment does contain risks for us. On the external front the US economic slowdown will lead to lower growth than we expected this year. The extent of the impact on our exports and on investment into Ireland will depend on whether the US experiences a temporary or a more lasting slowdown. Given the importance of the United States for us, we will have to keep developments there under close review.
The other main negative economic development for us this year has been the impact the foot and mouth disease has had on the economy. To date, the Government's action, with the great co-operation of all concerned, has successfully ensured that only one case of the disease has been recorded. However, the effect of the restrictions has meant that the level of activity in both the farming and tourism sectors has been below what we originally expected. It will take some time for these sectors to recover fully. As a consequence of the US slowdown and foot and mouth disease, domestic and international commentators have reduced their growth forecasts for the Irish economy this year by up to 2%. My Department will be publishing its revised forecast in its Economic Review and Outlook later this summer.
There is no doubt that the economic environment is now more challenging than it was at the beginning of the year. We must be careful not to take our current level of success for granted. In particular, while our inflation rate is now falling from last year's peak we have to be vigilant in relation to the upward pressure on inflation from unfavourable wage trends. Adhering to the terms of the Programme for Prosperity and Fairness is the best way to achieve the twin goals of maintaining economic competitiveness and delivering real increases in take home pay for both workers and social welfare recipients. The PPF provides us with a framework with which to respond to the new economic situation. We have a sound economy, sound public finances and a sound approach to business policies. As long as we keep our sense of realism, our capacity to meet the challenge is secure.
The revised 2001Estimates for the Public Services published on 29 March 2001, reflects change in voted expenditure announced by me in the budget as well as certain other adjustments to voted expenditure which arose thereafter. I have reminded my Government colleagues of the need to adhere to these allocations as my policy is to ensure that spending does not exceed the budget day level. The revised Estimates for Public Services, 2001, provide for total net voted expenditure of £19,653 million, of which £15,962 million is provided for net voted current expenditure. The Government is meeting all its commitments under the Programme for Prosperity and Fairness, substantially increasing the amounts spent on vital public services like health and education, funding significant welfare improvements and providing a substantial package of supports for children and their parents. The provision of £3,691 million in net voted capital spending for 2001 is in line with the programme of investment set out in the National Develepment Plan 2000 to 2006.
In line with the revision of the PPF last December the pay terms for the public service have been adjusted and an increase of 2% paid on 1 April 2001. Under the PPF, the public service benchmarking body was established in July 2000 to allow for comparisons to be made between jobs and pay in the public service and the private sector. This body will report in June 2002 and recommend pay rates for the jobs it is reviewing. Written submisions have already been made by both the employers and the unions and the body will now undertake its own research with a view to having a round of oral hearings in the autumn.
As I made clear in a recent debate in the Dáil, the benchmarking body is fully independent. While it has invited submissions from the relevant parties and will hold oral hearings in due course, its research, deliberations and recommendations are entirely a matter for the board itself. We will have to wait until June 2002 before we see its recommendations. We are committed to paying a quarter of any increase recommended from 1 December 2001 on receipt of the report. The implementation of the balance of any increases recommended will have to be agreed between the public service employers and unions in the context of negotiations on arrangements to follow the PPF.
The Programme for Prosperity and Fairness is a fundamental part of the Government's economic and budgetary strategy. The Government is firm that the basic pay terms of the PPF must hold and no group can be treated differently from others in the public service.
The changeover to the euro is fast approaching. I recently gave the House an overview of preparations during the Second Stage debate on the Euro Changeover (Amounts) Bill, 2001, and I propose to give only a brief outline here of the extensive public information activities the Euro Changeover Board of Ireland has been carrying out since its establishment. Among many other items, the board has sent a leaflet about the euro to every household, every year since its establishment; the most recent went out over the past two months. The board has run several advertising campaigns on television and radio and in the press and has set up a lo-call helpline and a website, the latter with a special section for schools. It has organised widespread circulation of leaflets, posters, booklets and other information materials, including educational material for schools and materials for every teacher. The board's public information activities will intensify in the autumn.
I now turn to the principal Votes in the Finance group of Estimates, starting with the Vote for my own Department. The Estimate for my Department for 2001 amounts to £91.3 million, a net increase of £43.2 million over the 2000 outturn. Major programme expenditures in my Department's Estimate for 2001 are an amount of £14.7 million under subhead M in respect of the public information programme of the Euro Changeover Board of Ireland. This allocation provides, in the main, for a substantial public information programme in preparation for the introduction of euro cash on 1 January 2001; a total of £11.8 million is provided in subheads O1 - peace programme, O2 - North South Interreg, O3 - special EU programmes body, and P - other community initiatives to meet expenditure on these EU co-funded programmes; and £13.9 million under subhead Q in respect of information society expenditure. The information society fund was introduced in 2000 as a central fund supporting projects identified under the Government's action plan for the information society. For 2001, it was decided partially to devolve the overall fund of £40 million for information society initiatives and a total of £26.1 million has been distributed across a number of Departments to support major projects in the areas of eGovernment, e-commerce, telecommunications infrastructure and Internet access and awareness initiatives. The £13.9 million allocated to my Department's Vote is a central fund focusing primarily on eGovernment projects.
Conscious of the Government's responsiblities as the largest employer in the country, I provided in the budget for the intoduction of a major Civil Service child care initiative to establish crèches for the children of those working in Departments. An amount of £5 million has been included in subhead R for the Civil Service child care initiative. A draft circular on the Civil Service child care initiative setting out a scheme of capital grants issued to all Departments during May 2001.
The net Estimate for the Office of the Revenue Commissioners at £217.1 million is up £40.3 million, or 23%, on the 2000 outturn. The bulk of this increase is accounted for by an increase of £22.3 million in the pay bill, a provision of £5 million for Revenue's organisational restructuring and £6 million provided for Revenue on-line services - ROS - which was previously funded through subhead Q of the Department of Finance Vote.
The first phase of Revenue on-line services - ROS - which is a keynote project in the Government's information society action plan, was launched in Septemebr 2000 and phase 2 went live in April 2001. Revenue customers can now use the Internet to file monthly and bi-monthly VAT and employer PAYE returns, make payments in respect of these returns and get electronic access to their VAT and employer PAYE details. In addition, customers can electronically file the following returns: employee cessation forms P45; annual return of trading details and the employer's annual P35 return.
Later this year, customers will be able to use the Internet to file income tax and corporation tax returns. Customers will also be able to access electronically details of their returns for these taxes and for capital gains tax, and to make payments by various means such as on-line banking and Laser. ROS is also proving to be a successful customer service initiative. To 2 April, 2,299 customers have registered to use ROS, 9,071 returns were filed, and tax payments made electronically total more than £449 million.
The Revenue Commissioners initiated a new organisational structure, designed to deliver improved service to, and increased compliance from, taxpayers as well as clarifying responsibility and accountability within the office. This process was signalled in the Revenue's last strategy statement, while the need for a new structure was identified in the finance review of Revenue conducted under the auspices of the inquiry of the sub-committee of the Committee of Public Accounts into DIRT. The new structure will be in place during 2001 and 2002, and fully operational by 2003. Responsibility for key elements of the project is assigned to senior managers and project teams are appointed.
In recent years, the Revenue Commissioners transformed the manner in which they perform their functions. The more businesslike approach is reflected in the level of tax revenue collected and the commissioners' interacting with taxpayers in a more client orientated manner. These developments will mean further improvements in how Revenue conducts its business. I commend the Estimates to the committee and will endeavour to supply any required information.
The Minister, ignoring the past three months' returns, stated that inflation is under control. The unexpectedly persistent high rate of inflation bears out the criticism of him by the European Union. Where does the Minister get his optimism? If our rate of inflation is significantly higher than that of our competitors, we will lose competitiveness unless our productivity fills the gap. Our productivity is increasing but it does not match the difference between our inflation rate and the EU average. From the Minister's speech, one would not know that we have the highest inflation rate in the EU. This means a loss of competitiveness resulting in job losses. It is extraordinary that the Minister did not refer to the thousands of jobs lost in the past fortnight which I hope is an aberration, not a sign of things to come. We cannot be complacent about inflation. It is at its highest since 1981, when Fianna Fáil were in power, when it was 21%.Garret FitzGerald's Government reduced it to 4% in 1986 and it remained below that until Deputy McCreevey became the Minister for Finance.
Our economy continues to boom, but we need prudent policies to ensure its continuance. We need not just prudent economic and expenditure policies but prudent policies vis-à-vis the EU. The Minister was criticised by the EU and his behaviour at this week’s ECOFIN meeting in Gothenburg squandered the goodwill that we will need among current and future member states. I do not understand why he is determined to upset our current and future EU partners. What advantage is there in that? We enjoyed a good image in Europe, because of the attitude of previous Taoisigh and Ministers for Finance and Foreign Affairs, which stood us in good stead and helped us through many difficult councils.
That goodwill served us well and won us more concessions than those to which we were entitled. The Minister's present provocative and belligerent attitude is counterproductive and inimical to our economic and other interests. One of the EU's criticisms is that his policies are excessively expansionary. Public expenditure is growing too fast, 22% in the last year, which is real growth of 16%, allowing for inflation. As financial officials stated to this committee recently, this means that by year three of the national development plan, costs will have risen by 58%. We will get only two thirds of the output from the £40 billion set aside for the development plan. Even the Minister must be alarmed by these figures.
However, does his Department take this seriously? Looking at the table, the votes under the Minister's control, with the exception of the Houses of the Oireachtas, rose by alarming amounts. The funding of the Oireachtas, the most under funded parliament in Europe, went down by 1% in 2001. Funding for the President's establishment will increase by 31%, Ordnance Survey Ireland by 213%, superannuation and retirement allowances by 21%, for the Comptroller and Auditor General's office by 35%, the Revenue Commissioners by 23%, the State laboratory by 15%, the secret service by 143%, the Valuation Office by 55%, the Civil Service Commission by 16%, and the Ombudsman's office by 34%, which is an average increase of 29%. With inflation of 6%, we are increasing annual expenditure in the votes, for which the Minister is responsible, by 30%. He states that he warned other Ministers to live within the moneys provided, as he said last year and the year before when his warnings were ignored. They would be because his own Department provides for astronomical public expenditure growth.
I do not oppose public expenditure in the present economic circumstances, but I oppose pouring money into holes or throwing money at problems which do not improve. The health service is an example of something into which we pour money but the patients and the public are daily growing more exasperated than ever before.
Criticisms of inflation and public expenditure, the two areas where the Minister was criticised by the EU, can be seen to be more than justified by what is in front of us here today. Bearing in mind the need for goodwill among our European partners, the Minister should reflect more calmly and evenly on the criticism and come to the obvious conclusion that a firmer hand must be taken with regard to both public expenditure and inflation.
The Minister talked about the unemployment figure as being 3.7%. The great three card trick was operated on our people when we changed from the live register of unemployment to the quarterly national household survey as the "true" measure of unemployment. It is this quarterly national household survey figure that we now choose to indicate the measure of unemployment as 3.7% of our work force. Why then is it that we are paying 130,000 people full unemployment weekly payments? This represents 6% of our work force. To claim full unemployment payments, whether benefits or allowances, one must be unemployed, available for and seeking work.
Why are we paying full unemployment payments to 130,000 people? I have not included those claiming part-time employment and I am not counting those over 55 years who are on the pre-retirement allowance, the equivalent of unemployment payments. The three card trick is being played here. The Irish National Organisation of the Unemployed, INOU, do not like me mentioning this but there is something wrong. Either many of those who are employed are drawing the dole or there are many more people unemployed than we are pretending. If that is the case, what has happened the Celtic tiger and why are there labour shortages in every county and at every level of employment?
The Minister must reflect on the fact that amidst the enormous wealth we have created, as a result of policies of this and previous Governments, there are still major issues to be addressed. If we are to continue this growth into the future there must be greater prudence and management than is evident from the Minister at the moment.
The Minister looks a little flushed from his visit to Scandinavia. Maybe it was a bit of Scandinavian sun or a reflection of the heat generated by the people outside his hotel room.
No, it was the sun in Kildare.
I will look at the broad economic policy guidelines. This year we have the opportunity to discuss them a little earlier than last year and maybe we can examine how we will regard them as the year goes on. I do not have the same difficulty as Deputy Mitchell with increases in public expenditure and I do not share the Minister's enthusiasm for substantial reductions in personal income tax. We need quality public services and they must be paid for. That requires a sustained programme of increasing public expenditure in a measurable way. That means we cannot continue to reduce personal income tax or other taxes in the measure of recent years. There is a distinct difference between us on these matters.
I do not entirely agree with the EU, the Commission and the Council of Ministers and their criticism of the Irish economic policy but I do go some distance with them. I empathise particularly with my fellow Social Democrats when they see Irish subsidies effectively allow us to reduce taxes in order to compete and take jobs from them. I understand their position, particularly at a time when many of them are finding it difficult to increase expenditure on social programmes.
The public and the press have missed much of the point about this belated debate about Europe. Perhaps the Minister and I would agree that there are fundamentally different visions and versions of what the European Union should be about. There is a view held by the centre right, and I suspect the Minister shares it, that the European Union is or should be primarily a single market, that it is an economic construct. People who take this view have a difficulty with us ceding or sharing sovereignty so as to agree on social measures but they usually have little difficulty with allowing our economy to be effectively run by multinational corporations, many of them from outside the European Union.
People of my political hue have always argued that in order to deal with multinational capital it must be done on a multinational basis and that involves ceding sovereignty to agree social measures which can be implemented throughout the European Union as a balance against the single market provisions that are largely of benefit to big business and to capital. There is a difference of view there. It follows from what those of us on the left would like to do that it becomes much more a political construct and involves the pooling of sovereignty on a regular and daily basis. There is a fundamental ideological difference there which should inform our debate.
I would like the Minister to talk to us about the broad economic policy guidelines. It seems they are more or less the same as last year. If that is so has the Minister dissented from the policy guidelines? If not does he intend to implement the recommendations made by the Commission and by the Council? If he does not intend to implement the Commission and the Council recommendations why did he agree to them in the first place or are we doing the classic Irish trick of singing dumb and basically going our own way? Does the Minister expect to be around at budget time to do anything? Will he indicate what his attitude to the broad economic policy guidelines is at this stage?
I am not sure what Government policy is any more. For the first two or three years of this administration it was fairly clear what economic policy was and the Minister has always been strong in his commitment to containing public expenditure. I have quoted his words after the last election many times and will not do so again. Whatever about the fancy footwork and the smoothing of figures over the years, it was always clear that the Minister wanted to stay, broadly speaking, within defined boundaries. Clearly the 2001 budget put an end to that and there was no longer an effort made to stay within those guidelines. Has the Minister replaced that 4% target with another target? With the 4% target we knew where we stood even if we would not have chosen that target ourselves. In the context of the forthcoming budget what does the Minister see as a desirable target for public expenditure?
I concur with what Deputy Mitchell says about inflation. If we discount the figure for tobacco increase in the 2000 budget, inflation is still running more or less at the same levels it has been for about the past seven or eight months. It would be running at well in excess of 6% were it not for the fact that the tobacco increase is gone out of it. There is nothing to be sanguine about in terms of the reduction in inflation. People are becoming increasingly concerned about the loss of jobs we hear reported, on what seems like an almost weekly basis. The confidence that was in the economy a year ago is not as striking now.
The Minister indicates that most commentators have discounted the projected growth at the start of the year by about 2%. I understand from this that his Department is now projecting growth of between 5% and 6% in terms of GNP growth for this year. Will the Minister confirm that? Will he also indicate whether he expects revenue growth to meet the budget targets? That will have a significant impact in terms of our capacity to meet the budget surplus projected at the start of the year.
On these occasions in previous years, I have usually asked about policy and about spending evaluation programmes. The Minister has become less and less enthusiastic about these things as the years have passed. To be honest, I have become a little less enthusiastic about asking for them. Spending evaluations simply are not being done within the Department with the enthusiasm we need. We need to increase investment in public services and it follows that we need to seek more rigorous ways of assessing whether the public investment actually meets the goals we are setting. That cannot be properly done within the Department - this is not a reflection on the competence of people within the Department because I do not think it can be properly done in the Department. It should be done by means of an independent evaluation unit and we should move in that direction sooner rather than later.
A recent parliamentary question which I put down to the Minister for Finance was unfortunately transferred to the Minister for Tourism, Sport and Recreation. The biggest item of projected public expenditure in the next few years is Stadium Ireland. I am sure the Minister is aware I have not taken as rigorous an "anti" view on this as others have but I think there is a need to examine the figures. What role will the Minister's Department play in terms of the evaluation that is currently going on and in terms of keeping an eye on the spending of public moneys on that programme? If that money is to be spent, there is an obvious need to reassure the public that it is costing no more than we say it will cost and that we are getting value for money. It would be unfortunate if the Department were to be completely taken out of the process as it seems to be at present.
I am not as sanguine as the Minister about the overall state of the economy. We are hanging in there but there is the capacity for things to go wrong and there are already signs that things are beginning to go wrong. What we need to ensure is that we have a clear economic policy in place and that is not the case. Taxes can certainly be reduced and spending can be increased, but it is frankly reckless to attempt to do both at the same time in the measures the Government appears to be determined to implement.
We will now proceed to a general discussion on the Estimates. Before we begin, I suggest that we proceed through the Votes in the following order as outlined in the timetable: Votes 2, 6 and 9, followed by the other finance group of Votes, 1, 4, 7, 8, 11,12, 15, 16 and 17, excluding Vote 10 for the Office of Public Works, which will be taken by the Minister of State, Deputy Cullen. Is that agreed? Agreed.
I apologise in advance because I must leave at about 7. 30 p.m. and I will miss some of the later Votes.
Does the Minister wish to reply to some of the points that have been raised?
We could have a very long-range economic debate about this but the main purpose of tonight's meeting is to discuss the Estimates. Deputy Jim Mitchell raised the question of inflation. That has risen in EDU to 3.4%. Recent figures from Germany in particular were upwards of that and the EU average is 3.4%. Last month's Irish figure was 4.1%. The gap between the average EU inflation and that in Ireland is close. There are other countries higher than us in the table - the Netherlands, Portugal, and Spain. We have not been the highest for a considerable time in this group. I would like inflation to be a lot lower but I have given chapter and verse as to the reasons for the increase in inflation here in recent years. Members will be aware of my view that in a small, open economy such as Ireland, the main determinants of inflation are outside our control.
It would be only fair to point out that there is some domestic increase in inflation due to some higher costs in a wide variety of areas. A recent increase in inflation in Ireland related to areas where we did not have a programme. We did not predict that there would be an increase in food prices, but food prices are up in the EU also. That is the main reason for an EU-wide inflation upsurge. The average inflation that I projected at budget time for the EU would have been at a rate of 4.5%. Unless inflation is to fall very dramatically in the coming months - 4.5% is the figure on the basis of the CPI - the consumer price index would have to fall considerably in the last six months of the year to bring in that average. I will publish a figure in the economic outlook mid-year review in July.
Deputy McDowell referred to growth. On budget day I give an estimate, as previous Ministers have done, of the various figures and we do not revise them again until mid-year. I refrain from predicting anything in the interim. Some commentators have been predicting that the effect of a slowdown in the United States economy and the effect of the foot and mouth disease on tourism and on related activities would possibly have a negative impact of up to 2% here. Some people will have noticed in the past two to three weeks that some economic commentators have been saying that they may have been overdoing their negative projections in recent months and that the figure may not be as low as that. I will give another figure in the middle of the year. The figure for growth this year will be lower than projected at budget time.
In terms of a slow-down in the economy, certainly the Irish economy probably grew in GNP terms by up to 10%.
While the Minister is talking about projections, the tax revenue projections——
At the end of each month, the Exchequer figures are given out and there is a small press release. Deputies will be aware that there is a slow-down in tax receipts this year under a variety of headings, primarily in the excise area, and that is to do with cars, but also in regard to drink, for some amazing reason. I do not see people anywhere drinking less but maybe their drinking habits have changed. Tax receipts are generally down.
Down or down on projected growth?
In the profile we established at budget time, down on that particular figure, not down in terms of the previous year but in terms of what we expected.
The hours were extended too.
Deputy McDowell raised the point of what the outturn would be in terms of budget surplus. The mid-year review will give an outline there. Certainly the budget surplus, taking out other factors, would not be as great as anticipated. The shortfall may be made up by other extra budgetary receipts which are not built into the budget at that particular time. Revenue growth is less than forecast, therefore we will give it another stab at the end of the six months. That will be done in the mid-year review on the Exchequer returns and it willfollow over into the economic review and outlook.
Some £400 million or £500 million.
Each month we have shown the figures. The last figure was up to the end of May and it was less than we expected at budget time. At the six months mark we will have a better handle on the situation.
The figures will probably be still higher than last year.
The figure we are projecting is, off the top of my head, about £2.5 billion.
Of course the reduction in housing output by 17,000 units will affect income.
There is a slow-down in general tax revenues. I can give the Deputy a breakdown of the figures on a month by month basis. There is a slow-down in house building, although other areas of construction are considerably better, and the net effect will be greater output in the construction industry. From what I read in some surveys, however, the figure for housing output will be down.
Deputy Mitchell raised a question about inflation and I dealt with this already. Ours is not the highest any more, but it will be higher than we expected at budget time. There is no significant evidence to suggest that we have lost any competitiveness because we have made it up in other areas. However, over a long period of time if we were to have a higher inflation rate which translated into higher unit costs, we would lose competitiveness.
An economist would say that the economy is growing so fast that losing some competitiveness slows down the economy to a more realistic level. That is not much consolation to a worker in, for example, an industry that goes out of business. When I hear economists say that the economy is growing too fast, I reply by asking if it would be better to have 10% unemployment and inflation at 0.2%. That would not be much good to the other 100,000 people who would be out of work.
In recent years our inflation has been pushed upwards due to a weakening of the euro. However, on the plus side there has been tremendous economic growth, which has resulted in more jobs for everybody. There are 300,000 more people at work than there were a few years ago. Maybe the Irish economy is growing too fast for economists sitting in rooms looking at figures, but I take the view that it is better to have the people at work than unemployed.
When Deputy Mitchell was chairperson of the predecessor of this committee, he used to make the point about the difference between the live register and the labour force survey. This is something I also paid much attention to when I was in Opposition. I never understand why there should be a difference between the live register and the labour force survey. Various studies have been done in recent years and I believe that there are a number of factors involved.
When participating in the labour force survey, people who are in a certain type of work regard themselves at work when they are, strictly speaking, unemployed. However, the gap has not been satisfactorily explained to me. It has been narrowed in recent years for a variety of reasons. However, given that there are labour shortages in most parts of the country, it is difficult to justify why there are so many on the live register. As I know from my time as Minister for Social Welfare, the live register is not constant and many people appear on it who are moving jobs and are perhaps out of work for a couple of weeks. There is a certain hard core there and I accept what the Deputy said about that.
Deputy McDowell raised the question of the growth in public expenditure. Leaving aside the capital side, the recent growth in current public expenditure can be put down to the increase in public service pay and pensions. The total bill is a function of pay and numbers. Pay has been going up as a result of national wage agreements and additional deals. Numbers in the public service are increasing also. For example, members may have read recently that the number of people working in the health service was 59,000 not many years ago and by the end of this year it will be 87,000 or 88,000. Numbers in the education area are also increasing. Every time national agreements are concluded, the public service pay bill increases.
The other increase in expenditure has been in the capital area. In our election manifesto, we set a target of 5% increase in capital expenditure during the lifetime of the Government. However, that was before we eliminated budget deficits and, given the dearth of infrastructure, I have increased capital expenditure considerably.
Deputy McDowell might regard the growth in current expenditure as good in some areas. Although I may have been criticised for some of my comments in the past 18 months or so, I do not take the same sanguine view. Increased public expenditure does not always mean better public services. When some commentators see a 4% increase in public expenditure they question how that can be squared with an estimate of 10%, 12% or 14%. As Deputies well remember, it was stated clearly before the election that it was net current expenditure, taking into account the settled fund. At least I said it was not net voted expenditure or gross current expenditure, it was this particular formula.
When I thought it up in opposition, it was based on the theory that there should be some benefit from reducing the national debt. To be very open about this, smart and all as I thought I was, I did not take account of when the social insurance fund got into surplus - I would get no benefit from that. The social insurance fund used to be a net charge on the social Vote from the taxpayer. However, when it went into surplus - it is now over £1 billion based on the Estimate for this year - I do not get credit for that whereas when I was eliminating it, I did.
The reason for increasing public expenditure has been in part to improve public services but also because the economy has changed. There are more people at work and more people living here. Up to last year I succeeded in retaining a 4% net current expenditure, which I defined myself. We had many disagreements about it over the years, but at least we knew what it was. It was not possible to adhere to it any more.
Deputy McDowell asked a legitimate question as to what will happen in the future. I would like to be able to come up with a formula. In a past life, I was very critical of various Governments which stated what the increase in public spending should be. Should it be a net real increase of2%, which applied when Deputy Mitchell was in government? Then nobody knew what inflation would be so it was airy-fairy. The advantage of having a hard figure was that it was measurable.
Surely it can be based on nominal growth plus or minus a percentage.
At this stage we had better move on to consideration of the Vote.
In opposition I preferred to set some particular target and, in answer to Deputy McDowell's question, I hope to be able to do something. I am not saying I will give a specific target because things move forward but it would be better to have a specific target.
I take on board the idea about the evaluation unit. I would not close my mind to that idea. There are programme reviews and cross-departmental teams, but I am not sure of their effectiveness.
Deputy Mitchell raised a good point about the broad economic guidelines from the EU. I agree with most of what is in the broad economic policy guidelines for Europe and also with most of what is stated in the country specific guidelines that apply to Ireland. I have disagreed with some of the aspects of the 52nd indent of that particular area. At the ECOFIN meetings coming up to the Gothenburg summit, I disagreed on behalf of Ireland and had a statement recorded in the minutes as to our dissatisfaction with them.
I am sure Deputy Mitchell has a strong view about our relations with Europe, but I would be failing in my duty not to defend Ireland's position and what we believe to be the best economic policy for the country at budget time. As he knows, coming up to budgets, Governments get advice from all quarters at home and, in recent years, abroad. However, we must take a particular view.
The basis of last year's budget was to preserve social partnership, which was at risk. In the 1980s when times were hard, we told the people we had to massively cut expenditure in a variety of areas and people suffered. When we turned the ship around and things started to go very well, I could not tell the people that they could not have better health services because people in an officesomewhere say that this would be a very badidea.
One of the reasons is that expenditure has grown so rapidly.
We could not give it when times were really bad and we cannot give it now that times are good.
No, the Minister is displaying some genius.
What would be the purpose of economic growth?
That is the Charlie Haughey school of economics, which ruined the economy in the 1970s.
Order, please.
If one was to proceed on that basis, there would be no point in having economic growth. Deputy McDowell and I fundamentally disagree regarding how an economy should be run and different aspects of our social policy beliefs differ too.
May I ask a question?
I may agree or disagree with Deputy Jim Mitchell regarding how he would run the economy, but we all agree that the purpose of having a successful economy is to do things we want to do in a wide variety of areas.
Yes.
As Minister for Finance, I implemented through my budgetary strategy the policies which the Government thinks are in the best interests of the country. Consequently, I have been forceful in defending the Irish reforms.
Is that why the Minister was throwing shapes in Gothenburg?
The Deputy knows that I never throw shapes.
We need to move on to discuss Vote 2.
I asked a question about the role of the Department of Finance in assessing Stadium Ireland.
My Department is represented on a group that has been set up at secretary general level to monitor Stadium Ireland. I support Campus and Stadium Ireland.
Vote 2 is for the Houses of the Oireachtas and the European Parliament.
Does the Minister acknowledge the Clerk of the Dáil's claim that the Oireachtas is the least funded parliament in Europe?
Arising from a recommendation made by the Deputy, I intend to set up a commission by the end of this year. A base line scenario is being examined to work out what the proper funding of the Oireachtas should be. The commission will be given an adequate budget so that it does not have to come looking for a couple of extra pounds when Estimates are being drawn up. I believe that is what Deputy Jim Mitchell recommended.
There have been a number of developments since the DIRT report made its recommendations. As a result of the findings of the tribunals, the Ethics in Public Office Act, 1995, the Electoral Acts and Bills going through the Houses at present, Members of the Oireachtas have to keep much more extensive records than has been the case in the past. As the Minister knows, individual Deputies are grossly understaffed and do not have anyone to keep files for them. I have had the same excellent secretary for about 20 years, but she does not have time to keep files. The lack of proper files will make us look like criminals or at best desperately inefficient when the commission asks questions.
When legislation setting up the commission is brought forward, I intend to allocate enough money to bring an end to the problems the Deputy has outlined. I accept that one needs a barrister in one hand and a secretary in the other recording what one says. In years to come one will be asked if one remembers meeting Joe Smith while walking out of Croke Park on 22 September 2001. I hope the matter raised by Deputy Jim Mitchell, which I accept, will be addressed.
Among the Votes we are approving today, why has the Vote for the Oireachtas been reduced when every other Vote has been increased by a multiple of the rate of inflation?
The reason relates to subhead D, which last year related to the televising of the proceedings of the Dáil, the Seanad and other services. The outturn in 2000 was £8.14 million and the Estimate in 2001 is for £1 million. The once-off cost, £7,278,000, of designing and purchasing broadcast equipment was met from the Vote in 2000. The cost does not recur in 2001, so the overall Vote has decreased. There are other reasons, but that is the main reason. If the cost of the television equipment was taken out, the figure would have increased by 18%.
Does the figure include provision for the famous underground car park that is supposed to be built?
No.
Has the car park been approved?
It is not included in my figures as it is to be met from the Office of Public Works Vote.
The Office of Public Works Vote?
Yes, with which the Minister of State, Deputy Cullen, will deal.
If there are no other questions on Vote 2, we can move on to Vote 6, which deals with the Office of the Minister for Finance.
Is the strategic management initiative faltering, or is the Minister happy that it remains energised and is continuing apace?
Civil servants spend a lot of time talking about the SMI. Various Departments have put great effort into implementing the goals of the initiative and most civil servants agree that progress has been made in furthering the concepts behind it and that general improvements have been made. My Department has made a major commitment to ensuring the SMI is pushed forward at every available opportunity. I am sure other Departments share the clear focus of my Department.
Will the Minister talk us through subhead N, which deals with the change management fund? The Estimates allow for a substantial increase of over £3 million compared to the 2000 outturn. This subhead is described as the funding of initiatives arising from the SMI.
Assessment of the change management fund is provided for in the Vote of the Department of Finance. This is the third year of the fund, which it is envisaged will operate for five years, subject to an annual evaluation. The sum provided for in 2001 is £4.5 million. The secretary general of the SMI implementation group oversees the administration of the fund, which is due to co-finance the cost of implementing in individual Departments and offices initiatives arising from the SMI's programme of change, Delivering Better Government. The emphasis is on subventing current cost, including limited numbers of transient posts. Requests for other assistance are assessed on their merits and on a case-by-case basis. Funding is also used to finance the development of projects that could be pursued from the centre or cross-departmentally. Assistance to individual Departments and offices is generally up to 50% of the cost. A higher level of assistance may be given to smaller Departments and offices.
Major initiatives being supported in 2001 include the implementation of performance management development systems and a new management information framework, previously called the generic model for financial management. Due to these initiatives not being implemented to the extent originally foreseen in 2000, demands on the fund were less than anticipated. It is expected that such demand will be high this year and will principally relate to implementation of the initiatives in question.
I am not sure I understood that.
Without being flippant, since I was a student I have had difficulty with this kind of concept and words such as "management" that go with it.
Are we talking about additional staff costs? Does "the implementation of performance management" simply mean that bonuses are being paid?
No, a system is being developed. The payment of bonuses has not arisen. Training is a large element of this area. In recent months, officials in my office have gone to courses lasting half a day, a day or two days to help them understand what is expected of them in the performance management development system. My officials were a little shell-shocked to discover what is expected of them. The programmes have been developed well and will make major changes in the delivery of the PMD system.
This is basically an assessment.
It will lead to a detailed assessment. Like Deputy Jim Mitchell, many people wonder where they will get the time to do these detailed assessments. I emphasise that much effort has gone into this and it has been moving forward fairly rapidly. This is taking off. It will not just happen next year, it has already started.
I am glad to hear that because I had begun to take a jaundiced view of the SMI process. It costs a fair bit of money to train people in the FOI and that is more tangible and understandable to me. Are we talking about management grades being trained?
All grades from clerical officer up will be involved. It will be very strenuous and many were shell-shocked, though I am not sure if that is the right word, at what was expected of them. To report and change was very dramatic.
Will the Minister explain the £6 million payment to promoters of certain charitable lotteries.
This fund was set up three years ago. My predecessor had some role in it. The national lottery was established in 1987. The Government accepted that it might prove desirable, in the light of experience, to provide some support for private charitable lotteries, the income of which could be adversely affected by the operation of the national lottery. In practice it is difficult to assess the impact of the lottery on charitable fundraising or to separate its impact from other effects such as the decline in the popular appeal of some charitable causes. Some evidence suggests that the public contribution to charitable bodies generally has continued to grow since the introduction of the national lottery. Charities in the voluntary sector have been significant beneficiaries of lottery funding. However, the promoters of charitable lotteries have consistently maintained that they have lost income to the national lottery and it was felt that assisting these charities was justified.
The Government decided in 1997 to establish a fund of £5 million per annum for a period of three years and to have a review before the end of 1999. Following this review I decided to increase the fund to £6 million for a period of three years, with effect from 2000, and to review it again before the end of 2002. The scheme is a very focused initiative which is intended to address the circumstances of private charitable lotteries which are products in the marketplace in direct competition with the national lottery. It was not intended that this fund would be a vehicle for supporting charitable fundraising generally. This is not the intent of the scheme as such a measure would require funding greatly in excess of what has been provided.
Is the Minister referring to the Rehab lottery?
That is one of the charities on the list. There is a process which it goes through and an independent board makes the final decision. I divide out the money but I do not have any say, apart from technically.
Does it have criteria for assessing the loss?
Yes.
How much does Rehab get?
It gets over 50% of the £6 million. Off the top of my head, I think it is £3.3 million. We will get the figures for the Deputy.
Will the Minister give us a more detailed run-down of subhead N - the euro changeover board - and how the £14.5 million is to be spent.
There will be £762,000 in pay and £13.923 million in non-pay. The Estimate for non-pay provides in the main for a substantial public information programme in preparation for the introduction of euro cash on 1 January next. The Euro Changeover Board of Ireland has been operational for some time. It is in its third year and every household has got some leaflet from it, particularly in recent weeks. A substantial information campaign is going on and it will become greater as we come closer to 1 January.
In relation to the changeover board and its expenditure on information for the public, has the Minister given instructions regarding local media, in particular local newspapers? Very often Departments run well-funded advertisements in the national papers but the local papers miss out badly. Recent statistics show that for every 100 regional papers purchased, only 51 households buy a national paper. If we want penetration in terms of getting into households in a rural area we must advertise in the provincial papers. Provincial papers have set up a single body which one can place one's advertisement with and it will distribute it to the papers in its group. It deals with over 40 papers. If the Minister has not issued instructions in relation to that will he thereby ensure the provincial press carries these advertisements?
In 2002 the changeover in the currency will be very confusing for a while. One of my colleagues raised the matter of the January sales. One will get one's winter coat at half the price in January and on top of that one will be confused with the euro. Is there a case to be made for delaying the changeover or the sales?
That would do wonders for the Minister's standing with his colleagues were he to suggest it.
That has nothing to do with the Estimates.
I cannot do anything about delaying the introduction of the euro and I doubt the market will decide to delay the start of the sales.
I do not give specific instructions to the board. It is chaired by a principal officer from my Department, who has been there for some time, and it is made up of representatives from a wide variety of bodies. It is not in the Department of Finance, it has moved to a different place. National and local media will be very much involved in this and I will make sure the Deputy's wish to have more local involvement is conveyed.
I would not like to underestimate the change this will bring. I hope the chaos will be minimal but there will be hiccups. There was a conference in Dublin today attended by Mr. Duisenberg, the Tánaiste, the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, and me. I am under no illusions that this is a mammoth task. It is not like decimalisation. We are taking millions of coins out of circulation and putting millions of coins back. We are doing the same with notes. It is not something we have attempted before, nor have the other countries of the EU. Members should use the office of Oireachtas Deputy to emphasise to people that it is time to get on with it. Surveys show that more people are aware of it but it is still a monstrous operation. We take an extended holiday at Christmas, which the rest of Europe has not got into yet. There may be a directive on that and other countries may be made to take a long holiday like us. We also have the sales Deputy McGrath spoke about, which means it is a most unsuitable time for the changeover. We would not have picked that date but in the negotiations it was not possible to set a date to suit everybody. I do not underestimate the logistics of doing this but a lot of work and planning has gone into it. Banks are planning what to do, as are retailers and I hope we can minimise disruption.
Does the Estimate for the Central Bank come under the remit of the Department of Finance or is it separate? The biggest costs to do with the euro changeover are to do with it.
We do not have a subhead for the Central Bank.
Under which Estimate does it come?
The Central Bank is self-funding and I take a dividend, if that is the appropriate word, from it each year.
In other words it will carry the full costs from its own resources of issuing the new coins, taking in the old ones and paying the banks for the costs. This is only a fraction of the costs involved.
This is only a very small fraction of the costs.
It is really a publicity campaign.
It covers the Euro Changeover Board, all the advertising and so forth.
Will the Minister give us the bigger picture regarding the Central Bank.
The bigger picture will be in the reduced profits of the Central Bank. The recent estimate of the costs for the Exchequer over all these areas, Departments and Government agencies was in the order of £100 million. That will include the costs outlined, the Central Bank costs and costs across Departments and agencies in terms of time. Most of those costs will fall on the Central Bank. However the Central Bank will also make a profit because it issues the coins as well as taking back old ones. There will be a cost for the Central Bank, but the biggest costs will fall on some of the retail institutions and banks. I have seen some estimates from individual banks showing the millions in costs the changeover will entail due to modifications to ATM machines and computers, extra staff, extra security costs etc. The Central Bank costs will fall——
Would it be useful for this committee to get further information from the Central Bank, as it is handling this issue? That information would not be furnished to this committee.
The Governor of the Central Bank comes here fairly often, at least when he is requested to do so. His point would be that Deputies should concentrate on getting the message across. The changeover will take place on 1 January and the more publicity about it, the better. It will creep up on people, many of whom will say we did not do our work. It would do no harm to invite the Governor of the Central Bank here to get figures and give a focus——
We might do that after the summer recess.
I compliment the Euro Changeover Board on the terrific job it is doing. After our last meeting I received a selection of the various advertisements and they are first class. It is a pity the board did not handle the Referendum Commission's advertising too. It would have done a much better job.
The Minister, Deputy McCreevy, was happy with the way it was handled.
I do not think so. We are all dismayed at the result. I will not dwell on that subject because I do not want to be ruled out of order. The public will have to watch out for forgeries because the forgers are probably busy coming up with all sorts of notes.
Deputy Briscoe raises a very interesting point. The notes will be the same across 12 member states. The coins will be the same on the front, but the back of the Irish coin will have the harp, "Éire", the year and the stars. The notes will be common to the whole area so one can imagine the volume that will have to be produced. I have seen figures in which in the order of 15 billion or 16 billion notes of all kinds of denominations will be produced.
There will also be high currency denominations, including a €500 note, which will be worth about IR£390. There is enormous potential for forgery across Europe. For this reason, the central banks of Europe, guided by the ECB, have spent considerable time ensuring that forgeries cannot occur. I am sure criminals, equally, are applying their minds to this. That is why there is a high security operation. In the past, we only had to worry about forgeries of Irish notes, sterling or francs, but that is changing.
The important thing is for members of the public to get their first notes from banks because many shops will——
We are using the retail organisations to take in the Irish notes and coins and give out the euro notes and coins. Banks can also be used for this purpose. When one goes into a shop on 1 January to buy something, one will hand over payment in Irish currency and receive the change in euro. Of the ATM machines, 80% will be stocked with the appropriate notes on 1 January. Most social welfare is still paid in cash so the first cash payment will contain at least four €5 notes. Retailers, shopkeepers and supermarkets will effectively be the means by which this is done. The Central Bank will have to stock the retail banks which, in turn, must stock up the retailers prior to 1 January, before reversing the whole operation to take back all the old money. This is a gigantic operation and there will be hiccups on the day.
There are bound to be hiccups, but let us hope there are fewer than anticipated. Vending machines will also have to change.
They will have to change as well.
Any other questions.
Yes. I attended a meeting yesterday to discuss a different set of Estimates, namely, those of the Department of Social, Community and Family Affairs. A recurrent theme in the Estimates for the coming year has been consultancy fees - they also recur in the Minister's book. There seems to be a trend to use more outside consultants. If one accumulates the amount of money involved, it would be enormous.
A parliamentary question was put recently to all Departments asking the figure for consultancy fees. My figure for this year is small, amounting to just £1 million.
It is more than that. I have spotted £2.3 million.
The Deputy is right.
How much of this will be used for——
If I am not mistaken, we had a report from the Comptroller and Auditor General some years ago which examined the whole issue of consultancy fees. A report was produced by all Departments. The specific provisional increase under subhead A.7 is £1.349 million. There is nothing significant in this and I can give the Deputy the relevant details. It is spread across many areas.
Yes, but what matters?
The biggest figure is the £300,000 for the national lottery licence, for which we had to engage consultants. I see the point Deputy McGrath is making. All Departments and local authorities make use of consultants for various reasons. The obvious reason for bringing in consultants is the absence of internal expertise. Sometimes it is due to the lack of resources within various Departments and local authorities to assess special areas and sometimes it occurs when people are afraid to make decisions and choose instead to pass the matter on to someone else. That also applies to politicians who make decisions about making allocations, they set up a board to do it.
Civil servants do likewise with consultants.
I am afraid public servants are inclined to do likewise - that will definitely get me into further trouble.
Perhaps we could engage consultants to see if we need so many consultants.
The general point is that this practice seems to be increasing. The Minister is right about local authorities. When they decide to design a pig house, they bring in a firm of consultants even though they have large numbers of engineers employed in their own right. A case in point was the endless money paid to consultants to design the N4, on which the Minister and I frequently travel. When the heavy rain came last winter——
It flooded the whole lot.
Yes. I wrote to the NRA asking if it approached the consultants to say is was owed money because the job had not been not done correctly. It did not. All sorts of excuses were made.
My concern is that many of these consultancies are being used to promote Ministers and their Departments, but not the Minister for Finance.
He does not need it.
Perhaps the Minister is not as photogenic as others and does not need it. If one opens any recent publication, one will see an image of the Minister for Social, Community and Family Affairs. In the most recent photograph, he was surrounded by a group of children. The funding for this kind of activity is under the heading "consultancies".
Deputy McGrath can take it up with the relevant Department.
I did.
We will move on to the Office of the Revenue Commissioners.
As the Minister for Finance prepares his budgets, he will have more money to give back to the taxpayers if he curtails the use of consultancies by various Departments.
Has the Department of Finance many rented offices in Dublin, rather than having its own property? Has the Minister ascertained whether it is better to rent or purchase?
That will come under Vote 10.
Property is rented by the Office of Public Works. It makes decisions whether it should rent or buy. This year, we have bought out some leases.
The Minister has allocated £1.1 million to the benchmarking body this year, and nothing for next year. Does he expect the benchmarking body's review of salaries within the public service will be completed and that the teachers will be happy with what has emerged from benchmarking?
I wonder if the teachers will ever be satisfied. As a former teacher, Deputy McGrath will be aware of this. There was no funding in 2000. This year, £1.19 million was provided for the salaries of the secretariat and the fees to board members of the Public Service Benchmarking Body. It also provides for the cost of consultancies and expenditure incurred on official travel by board members and staff of the secretariat. I appreciate why the benchmarking body would have to engage consultants to have knowledge of the standard rates of pay in private industry.
The benchmarking body is to report by the 30 June 2002. According to the original terms of the PPF, it was not to be until the end of 2002, but the time frame was changed in the negotiations before the last budget. The schedule is very tight.
Is there no money for the benchmarking body next year?
This is the Estimate for 2001 so the Minister would not have it for next year.
All right.
There will be some in 2002, I am sure.
I agree with Deputy McGrath with regard to consultancies and the fact that many Departments and local authorities are afraid to make decisions. As the Minister said, they are afraid because of public outcries and the media focusing on small protest groups.
Will someone in the Minister's Department examine the charges or set a charge above which one cannot spend on consultancy fees?
There are rules set down by the Department of Finance as to how these should apply. I remember a report from about five or six years ago, by the Comptroller and Auditor General, I think, on the costs across Departments. There are thresholds established by the Department which determine the levels at which decisions must be made.
I do not blame civil servants and Ministers for sometimes hiring a consultancy firm to obtain an outside opinion. It provides cover. On some important issues, consultants are definitely required. It would not be possible for the benchmarking body, for example, to know the going rate of pay across a wide range of industries unless it paid specialists to find out.
We will now consider Vote 9 pertaining to the Office of the Revenue Commissioners.
Are we finished with Vote 7?
We will deal with it after discussing the Revenue Commissioners. We will consider all the other Votes then.
I see consultancy again under subhead A7. The Estimate amounts to £4.9 million.
Of that, £1.6 million is for Revenue on-line services, ROS, £1 million is for integrated taxation processing, ITP, £400,000 for the introduction of tax credits in the calendar year, and £1.2 million for a number of smaller IT consultancy projects, of which I have a list. The Revenue on-line services cost most.
There is an extra £2 million under subhead A.4 relating to postal and telecommunications services.
The increased postal costs in 2001 are mainly due to the euro changeover, the calendar tax year, tax credits and tax relief at source. Excluding these once-off provisions, the post provision figure is approximately £6.4 million. The reduction in telecommunications services is partly due to decreases in service charges. There was also a substantial reduction in 2000 because of the introduction of a virtual private network. This reduction will be ongoing.
Subhead A.10 pertains to law charges, fees and rewards, including the collection of fees for revenue, sheriffs etc. Is the cost under that subhead the net cost? I understand that when a sheriff makes a visit to somebody, he gets a fee from that person. If he comes to me looking for money and he brings two or three lorries, I pay him handsomely for bringing them whether or not he takes anything away. He is also paid by the Department of Finance.
Does the figure pertain to the net cost? I understand the sheriff gets a percentage of what he collects on top of the fee one has to pay him.
It is the full cost.
Is the Minister saying that it will cost £3.69 million to pay those people?
It provides for the engagement of external solicitors and sheriffs to enforce the collection of outstanding taxes. It also covers legal expenses incurred by or on behalf of the Revenue Solicitor's office and rewards in relation to the detection of evasion. I am sure the latter does not comprise a great amount. This was questioned before so I am sure people have information on it.
The main reason for the increase is the additional cost incurred in introducing an extended system of solicitor enforcement. The new system, includes the engagement of six new firms of external solicitors as well as ensuring that the costs of solicitor enforcement are borne by the faulting taxpayers rather than the Exchequer.
Has the Minister any idea how much was collected by those people?
In 2000, 16,199 certificates were issued and a total of £54 million was collected directly by the sheriffs. It is estimated that amounts similar to the amount paid directly to the sheriffs would have been paid directly to Revenue as a result of sheriff enforcement. One could say the sheriff system contributed to £108 million pounds.
I suspect that figure has been reducing in recent years. Deputy Dukes was the Minister for Finance when the sheriff system was introduced. Deputy Ahern and myself remember the system, other Deputies might to too young to remember it. A book should be written about the system prior to that; it was great fun. I will not go into it now, but I gave chapter and verse when I was in Opposition. Seldom did anyone have to pay.
The Revenue sheriff system was then introduced and it has contributed enormously to the current system of collection. Matters are now more or less instantly referred to the Revenue sheriff. The system was introduced in 1985 or 1986 and there has been a dramatic improvement. The intention is that the work of the Revenue sheriff system should decrease. I know from experience that because information is being submitted so quickly to the Revenue sheriffs it encourages everybody to comply with their obligations.
Specifically on the point of the sheriff, I note a lot of extra expenditure is being provided for postal and telecommunication services. It is important that the communications between the sheriff's offices and the Revenue Commissioners are improved. It is regularly found that notices are sent to the sheriff, the taxpayer has made the payment and when the sheriff visits the taxpayer he finds his information is a month or more old. The taxpayer may have made a direct payment and the sheriff does not seem to be aware of it. I have seen a number of cases like that in the past year.
The communication between the Revenue and the sheriff's offices around the country is very poor. The sheriff can have the money but when one rings the tax office it can take a long time to get the information. Revenue services, from the consumer's point of view, have improved enormously in all areas, but there is a black spot when it comes to dealing with the sheriff's offices.
I will pass that on to the Revenue Commissioners who will take note of it.
We now move on to Votes 1, 4, 7, 8, 11, 12, 15, 16 and 17.
I would like some information on Ordnance Survey Ireland in Vote 4. Approximately how many staff are employed by Ordnance Survey Ireland? I note there is a large increase in expenditure for temporary staff. Are there proposals to make it a separate State body? Is that incorporated here or will it happen next year? The staff are complaining that they are not being properly consulted in this matter.
The Ordnance Survey Ireland Bill, 2001, passed all Stages in the Seanad some months ago. We might be able to take the Second Stage in the Dáil before the summer recess. The Bill sets up the ordnance survey as a State sponsored organisation.
There are 300 staff in Ordnance Survey Ireland.
I will save what I have to say for the Second Stage debate.
I spend a lot of time meeting them.
Are there any other questions on the Estimates before us?
The Minister of State, Deputy Cullen, is now going to take my place as I have to prepare for a dinner in honour of the president and governing council of the European Central Bank. The Minister of State will of course deal with the Office of Public Works aspects of the Estimates.
The Minister should have brought the ECB president here, he might have learned something.
He is a very decent man.
Does the Minister wish to make any further comments before he leaves?
I thank the members for their attendance and for raising such interesting questions.
The Minister should continue to lower income tax and not mind what Deputy "Thatcher" Mitchell wants.
It is broadening the tax bands the Minister wants, it has much more effect on take-home pay.
Vote 10 - Office of Public Works
We now move on to Vote 10 for the Office of Public Works which the Minister of State at the Department of Finance, Deputy Cullen, will take.
I am pleased to be here today to introduce the Estimate for the Office of Public Works for the year 2001. Before dealing with the main heads of expenditure in the Estimate, I want to refer to current developments in my office.
As I have stated in the past, my objective for the Office of Public Works is that it should adopt a commercially-minded approach to its operations, enhance customer service, provide a clearer focus on value for money and identify possible new areas of business activity. I am pleased to report that Office of Public Works continues to make excellent progress in these areas. An example of the quality and service-led ethos I wish to develop can be seen in the successful completion of the Leinster House 2000 project. I think most Deputies will agree that we now have a Parliament building of which we can be proud with state-of-the-art facilities for Oireachtas Members and administrative staff alike. In a recent survey of Members and their staff commissioned by my office, there was a high level of satisfaction expressed with both the new accommodation and the level of service provided by Office of Public Works while the work was in progress.
This, of course, is not the end of the story as my office is committed to the further upgrading of the Leinster House complex over the next two years. Work on the restaurant extension and the press reception area is due for completion in 2001. Work on the redevelopment of Leinster Lawn as a fully planted public garden and the landscaping of the Kildare Street courtyard is due to commence later in the year. This work will involve the creation of a new carpark for Members' cars under Leinster Lawn. Work is also due to commence before the end of the year on the refurbishment of Kildare House which, Deputies will be glad to hear, will include a fully equipped gymnasium and a crèche.
I also pay tribute to the staff of the architectural service of the Office of Public Works who were recently awarded the Royal Institute of Architects of Ireland triennial medal for restoration for their faithful restoration of the Turner Curvilinear range of glasshouses at the National Botanic Gardens. This is Ireland's premier award for a restoration of exceptional merit and is the third such award won by the architectural service of my office. Following on from the ISO 9002 awarded to the projects division of Office of Public Works last year, this is further confirmation that the standards, practices and procedures in my office are not just on a par, but in many cases better, than those in the private sector. I am particularly proud of this achievement and I commend the staff concerned.
I also take this opportunity to compliment the Office of Public Works staff who were involved across the country in the efforts to minimise the threat posed by foot and mouth disease. The provision of matting and disinfectant was done swiftly and efficiently by the building maintenance services. The huge scale of their effort was evident at the entrance to every State building and office. An action plan was put in place in co-operation with the Department of Agriculture, Food and Rural Development and when a case was confirmed in the Cooley Peninsula, Office of Public Works engineering and architectural staff provided 24 hour assistance and the machinery necessary to dispose of the animal carcases. It is very reassuring to know that, when a national crisis like this occurs, we can rely on our public servants to respond positively and effectively.
In relation to new areas of activity, I am pleased to report that the Government has seen fit to use the project management expertise of the Office of Public Works on a number of very worthy projects overseas which have been included in the Office of Public Works Vote this year for the first time. The Irish College, Paris, was originally founded in 1578 and has been at its present location in the Rue des Irlandaise since 1769. During its long history, the college has provided education to the Irish which was denied them at home and has served as a refuge for the exiled Irish during the Penal Age. The Government has provided £7 million for the refurbishment and conservation of the college, of which about £5 million will be spent in 2001. I am pleased that the money now being made available will ensure the college's future has a vital component in the Irish academic and cultural association with France which began over 400 years ago.
Similarly, the contribution of £200,000 to support the maintenance and refurbishment of the Irish College in Rome recognises the importance of that college in the social and political history of the Irish State. There is also provision in the Estimate this year for £300,000 for the commencement of design work on a refurbishment project for the Irish College in Louvain.
I am also in discussion with the Franciscan Order in relation to developing St. Isidore's College in Rome with a view to achieving greater utilisation of its facilities.
I am delighted to welcome the approval by First Minister Trimble of the joint proposals of the Office of Public Works and the Construction Service, Northern Ireland, in relation to the upgrading and maintaining of the Island of Ireland Peace Park in Messine, Belgium.
I wish to turn to the rest of the Vote and to go through the other main areas of expenditure.
The total amount being sought for the Vote is £269,494,000. A sum of £226 million is sought for the office's accommodation programme. At £127.24 million, subhead E - New Works, Alterations and Additions - is the largest element of the accommodation programme. The major areas of expenditure this year are £15 million for asylum seekers, £14 million for office rationalisation and refurbishment, £12 million on the Garda building programme, £11.7 million on a new decentralised office in Dundalk for the Revenue Commissioners and the Department of Social, Community and Family Affairs - which completes the existing round of decentralisation as initiated almost two decades ago, £11 million on the Farmleigh Estate buildings, £10 million on the National Museum and £9.1 million on the Social, Community and Family Affairs programme.
This year, the Estimate for my office includes a provision of £35.2 million for the asylum seekers accommodation programme made of £15 million in subhead E and £20 million in subhead D. I propose to briefly describe the current position in relation to this programme. My office acts as an agent for the Department of Justice, Equality and Law Reform in the sourcing of accommodation solutions for asylum seekers. Last year, the focus was on acquiring hotels and hostels suitable for use as asylum seeker accommodation. Priority was given also to the completion of mobile home sites at three locations - Kildare, Athlone and Tralee. These sites have a combined capacity of about 1,000 asylum seekers when fully commissioned.
This year, one of my office's main priorities will be on sourcing greenfield sites suitable for the development of system built accommodation centres. Towards this end, a programme of identifying and evaluating potential sites for such centres is well under way. It is hoped that this process will yield up to ten sites which can be developed within the next two years as accommodation centres. Accordingly, I am proposing that £20 million be provided in subhead D to cover the purchase of the necessary sites and properties. In addition, I have included a provision of £15 million in subhead E to cover the cost of site development and the erection of systems built accommodation to house asylum seekers. This accommodation will be temporary in nature and will be capable of being demounted and relocated. Furthermore it is of a high quality steel modular construction and is capable of being erected within a relatively short timeframe. The centres are being designed to a high standard and will provide quality accommodation, full catering and recreational facilities in a mix of family units and dormitory style arrangements.
Three projects of this type are in progress. A centre at Knockalisheen, County Clare, which will accommodate up to 400 asylum seekers is due for completion shortly. A second centre at Cork Airport will accommodate 450 people when work is completed early next year. Work on systems built accommodation for up to 400 people is also due to start on a site at Balseskin, north County Dublin.
My office continues to provide a range of technical, administrative and professional support and advice to the Department of Justice, Equality and Law Reform in respect of these projects and the asylum seeker accommodation programme as a whole.
It is estimated that £12 million will be spent in 2001 on Garda stations. Work on the following Garda stations will be completed this year - Bray, Ballyfermot, Castlecomer, Clondalkin, Dunshaughlin, Rathmines, Stradone, Tullamore and Waterville. Work will continue during 2001 on Garda stations at Cobh, Clifden, Kilrush,Kilmacthomas and Tourmakeady.
Some £49.795 million is sought in rent and rates. Office of Public Works manages 11 million square feet of office accommodation, of which about 23% is leased. Property rents have risen significantly in recent years in response to market conditions. This is reflected in the fact that Office of Public Works's rent reviews on Dublin properties are currently increasing by 20% on average per annum. Nevertheless, in 2000 the average Office of Public Works rental in Dublin was still under £20 per square foot which compares favourably with the current market rent of between £30 and £40 per square foot. I would expect that the Office of Public Works will be in a position to further reduce its leased accommodation in Dublin when the forthcoming decentralisation programme gets under way. I expect the Government will shortly be finalising proposals regarding the planned decentralisation of public servants out of Dublin and I, as Minister with responsibility for the Office of Public Works, look forward to playing a central role in ensuring the success of this programme. I am sure this is a matter which will be engaging us for the next few years.
A provision of £28 million is sought for the purchase of sites and buildings. As stated earlier, £20 million is required to provide accommodation for asylum seekers. The balance of £8 million is to cater for the Office of Public Works's accommodation programme, particularly in relation to the Garda programme and the office purchase programme. The decrease in the provision vis-à-vis 2000 when my office spent £97 million on purchases, is accounted for by the fact that Office of Public Works bought two particularly large office blocks in Dublin city centre last year, namely, 72-76 St. Stephen’s Green for £28.75 million and 6-7 Hanover Street for £20.85 million.
These buildings were purchased as part of Office of Public Works's policy to purchase strategic properties and to acquire the freehold in properties held under long and onerous leases. Specific target properties are being identified on an ongoing basis. The purchase of such properties makes good economic sense. Take for example 72-76 St. Stephen's Green, the headquarters of the Department of Justice, Equality and Law Reform and a strategic building in the heart of Dublin city centre. This building was costing £1.15 million per annum to rent and was badly in need of major refurbishment which had been costed at £13 million. My office was naturally reluctant to embark upon such a costly refurbishment on a property the State did not own. However, now that we own the building, this refurbishment can proceed and is due to commence next year. I should point out that the constantly changing situation in relation to the provision of accommodation in an extremely volatile market has created a difficulty in estimating expenditure for these subheads. The proposed provisions reflect the anticipated demand for services in these areas and are, of necessity, based on estimated requirements.
The other major programme on the Vote is drainage and engineering works for which £21.1 million is sought. This programme comprises arterial drainage maintenance and the various flood relief schemes. A sum of £9.915 million is being sought for the arterial drainage maintenance programme. Following the publication of the PricewaterhouseCoopers report into the programme, the Office of Public Works is implementing its recommendations which broadly speaking are to continue with arterial drainage maintenance and to prepare a programme of work to deal with the Office of Public Works' responsibility for bridges, embankments and drainage districts.
Deputies will be aware that the Office of Public Works is carrying out an ongoing programme of flood relief schemes in various parts of the country which are subject to periodic temporary flooding. The Office of Public Works from time to time also co-operates with and provides support to local authorities in the preparation of flood alleviation proposals by the councils within their jurisdictional areas. The flood relief programme will require £9.5 million in 2001. I wish to outline the position with regard to local flood relief schemes. Schemes due for completion in 2001 include Dunmanway, County Cork, Freemount, County Cork, Drumcollogher, County Limerick, Belhavel, County Leitrim and Scotch Quay, Waterford. Site works have commenced at Carrick-on-Suir, County Tipperary, and are due to commence during 2001 at Kilkenny city and Hazelhatch, County Kildare. The Carlow town scheme has already reached public exhibition stage and the following schemes will go on public display during 2001 - Clonmel, County Tipperary, John's River, Waterford city and Cregclare in south Galway. A report into the study of flooding in the town of Ennis, County Clare, was co-funded by the Office of Public Works and Clare County Council. The engineering aspects of the report are now completed and the cost-benefit report is awaited.
In relation to a number of towns and areas which were particularly badly affected by the flooding last November, my officials and I have been actively engaged in discussions with the relevant local authorities and interested parties. In the cases of Fermoy and Mallow, County Cork, and Enniscorthy, County Wexford, consultants are expected to be commissioned before the end of the year with a view to developing flood alleviation proposals for these towns. My office is also providing support and assistance to the relevant local authorities in the cases of the Avoca River at Arklow, County Wickow, the Tolka River at Dunboyne, County Meath, and Drumcondra, County Dublin, and the Griffeen River at Lucan, County Dublin.
In my capacity as chairman of the interdepartmental committee to monitor the effects of bad weather, I reconvened the committee in January 2001 when I met with representatives from all the relevant Departments and agencies. Arising from the committee's recommendations, I instructed my officials to undertake a number of initiatives that will contribute to addressing the flooding problem countywide. The principal initiative is a major flood hazard mapping project that will identify the location and extent of flood prone areas, the first phase of which has now commenced.
Deputies will also recall that the Government acted very quickly to deal with the problems suffered by people whose houses and premises were flooded last November and put in place a scheme of humanitarian assistance to be administered by the Irish Red Cross Society. There were over 400 applications from 17 counties across all four provinces, although predominantly from the southern, south-eastern and eastern regions. The Red Cross was very efficient in completing its detailed assessment of the applicants and a total of £2.75 million was paid out in humanitarian aid by the end of February 2001. I am glad the Government was in a position to respond quickly to assist the unfortunate victims of this flooding and hope that the humanitarian assistance provided will help to restore their lives to normality. The Irish Red Cross Society has now submitted its report and I intend to place a copy in the Oireachtas Library.
Finally, in relation to Vote 10, I would mention that the administration costs of the Office of Public Works are expected to amount to £22.491 million in 2001, which represents 8.35% of the total Vote. I wish to conclude by thanking members of the Select Committee for their attention. I shall be pleased to hear the views of the Select Committee and will do my best to answer any questions that may arise.
Do you wish to make a statement on behalf of your party, Deputy McGrath?
I do not know if I can make a statement on behalf of my party but I will ask a few questions. It is a good process to go over the Estimates in this way. Perhaps more money, time and resources should be spent to enable us to scrutinise what is happening. It is an annual crib that not enough resources are made available to the Opposition to undertake a thorough investigation of the expenditure involved. That situation may not change but it is my opening point.
I can assure the Deputy he will be happy with this Vote.
I thank the Minister. I welcome the Minister's statement where he said his "objective for the Office of Public Works is that it should adopt a commercially minded approach to its operations, enhance customer service, provide a clearer focus on value for money and identify possible new areas of business activity". I would welcome a commercially minded approach to the Office of Public Works's operations and I hope the Minister will take that route. I have had much contact with the Office of Public Works over various matters and I have to say that its staff are always courteous. Nonetheless, I find that it takes a long time to obtain decisions. Maybe that is the nature of the way in which the Office of Public Works operates; I do not know. I am thinking particularly of the Minister's desire for a commercially minded approach by the Office of Public Works and his treatment of Garda stations around the country. Quite a number of old Garda stations were established at the foundation of the State or possibly were old RIC stations. Many such buildings have become uninhabitable, although in the past a Garda sergeant may have lived on the premises. I have to declare an interest because my father was a member of the Garda Síochána and we were brought up quite near a Garda station with which I am very familiar. Many such buildings have, however, passed their sell-by date and in some cases they are being replaced by temporary buildings with a green man. In many cases I suspect that they are occupying quite valuable space in small villages and towns. I know of a particular case where a Garda station is standing on a substantial area of ground in the centre of a village. A local developer spotted it and made proposals to the Department saying he would be prepared to do a deal - building houses and a modern Garda station to meet the Department's requirements. The developer did not indicate a charge but I am sure that a charge could arise. From the time that initial proposal was made to the Office of Public Works - it has been going for two years - no final decision has been reached. It is frustrating from the developer's point of view that the matter is dragging on. He is wondering whether he will get the land. It is very frustrating also for the local tidy towns group because an eyesore is still there in a prominent position. The building is not being maintained, it has broken windows and the grass is overgrown.
Maybe this would be a way for the Minister to offload part of his commitment to build new Garda stations. He may be able to upgrade stations across the country by adopting a policy of advertising for the required proposals. He may have to develop a blueprint for what is required in a modern local Garda station. I do not know what are the current requirements of the Garda authorities concerning small stations.
When the Minister is designing such a blueprint, he should not do what was done in the case of the regional colleges in 1979. Then dreadful buildings were reproduced. The outline design should be such that the facia can be completed later to blend in with the natural surroundings of a particular village. Many Garda stations could be greatly improved at no real cost to the State.
In that context, I wish to ask the Minister about the rental and leasing of departmental property. I note in the Estimate that the Minister is planning to spend £50 million in leasing in the coming year. That is a lot of money. He mentioned that the cost of rents is rising by 20% per annum. About 23% of the property used by the Minister's Department is leased. Has the Minister undertaken an in-depth study whether to lease or buy property? Fifty million pounds is a lot of money and one could purchase a lot of property for that sum. If that was accumulated over the years it would amount to an awful lot. To what extent is the Minister studying this matter? I note he said he was examining the decentralisation that may occur. That brings me to the very popular subject of decentralisation. I see the Minister is going to spend a lot of money in Dundalk. How was it decided that the Department of Social, Community and Family Affairs should move to Dundalk? I am not sure what the reasoning was.
The Deputy should not get mixed up. That is the end of a previous programme. It is only a part of it. It happened in the Deputy's time in Government and he may be trying to gain credit for it himself. It is a coincidence that the Minister lives there. That is the end of the last programme and has nothing to do with the current one.
All right.
Dundalk has been due such a development for at least 15 years. We have all been in Government during that time and eventually we got there. That is it.
So the Minister, Deputy Dermot Ahern, will not actually open it? DeputyMcGahon will open it.
I would not say that he will not open it. I did not say the Deputy delivered it, I said he was part of the process.
I will have to remind Deputy McGahon about that when I am talking to him.
You are doing very well, Deputy McGrath.
Thank you for the commendation, Chairman. I will certainly put that on my CV when the need arises.
To what extend is the Minister involved in decentralisation? In what way are decisions on decentralisation made? Does it concern population, the availability of land or the availability of offices? I know somebody prominent in my area who is preparing offices for decentralisation. No doubt the Minister of State has received the brochure on it.
I receive many brochures.
I would say he received this one a number of times.
On flood relief, year after year there are flood problems. Like other Deputies I am called to meetings when people's homes are flooded. I attend such meetings on a regular basis around Athlone, due to the proximity of the River Shannon flood basin slightly south of Athlone.
The Minister of State says his staff are mapping those areas. To what extent is he preparing possible remedial action works or measures which will relieve many of them? In south Galway a few years ago there was a flooding problem which hit the headlines. The Office of Public Works held a view that work would cost £7 million or £8 million and it could not be done. A local person came up with an idea by which the necessary work could be done much more cheaply. It involved the construction of a drain, for the want of a better word, from there to the sea at a cost of £150,000.
It does not work.
It works and serves the purpose. There has not been any flooding in the area since.
I visited the area.
According to the local people, it has worked. One would wonder what has happened in that regard.
In his opening remarks the Minister of State, Deputy Cullen, stated that the Office of Public Works is looking for new areas of business activity. What is the office targeting? Which areas of business activity does the office have in mind? Does he have any details on that?
Since the Deputy finished on the issue of flooding, I will ask one brief question on that issue. I noticed that the Minister of State said in the case of Fermoy and Mallow, and Enniscorthy, which is not of particular interest to me, that consultants are expected to be commissioned before the end of the year with a view of developing flood alleviation proposals for these towns. I understood plans had been formulated already. Is it that those plans are unsuitable and other plans must be made?
To answer the last question first, we set up steering committees and these have been very successful. What I have done here is confirm the appointment of consultants. A great deal of preliminary discussion and work has been done but it takes time to get through. However, we are ahead of schedule. I will come back to this in the context of what Deputy McGrath said.
Thank you, Chairman. I was only seeking confirmation.
The next stage, for the benefitof those in Mallow and Fermoy, is to appointconsultants to design the scheme. There is anadvertisement in the newspapers in Fermoy today.
Deputy McGrath made a number of points. I thank him for his kind words about the office. He asked what we meant by being commercially minded. From my experience meeting my counterparts I can say we are one of the foremost commercially minded Departments in Europe. The most public example of that is obviously the achievement of ISO9002 status by our project management services. This is the high accreditation which private sector industry throughout the world tries to achieve. We are one of the few organisations in Ireland to have achieved such accreditation. We are the first civil service Department in Europe to achieve it.
Furthermore, as the committee will be aware my Department is now divided into very specific business units. We hope to achieve ISO9000 accreditation in the architectural section and right throughout the system in engineering and other areas. All the business units are individually working towards ISO9000 accreditation.
This accreditation is important because it is not an end in itself. One must maintain the standards and one is reviewed constantly. Not so long ago the project management services were subjected to a review which was very successful. That is indicative of the sort of attitude and ethos I want to see at the Office of Public Works.
The Deputy made the point that at times it seems to take a long time to get a response in the sense of definitive action. I am glad he did because I am anxious to respond to the point. The core role of Office of Public Works is in the provision of infrastructural projects in the widest sense such as property, engineering and flood relief, which is what he highlighted. Often it takes time to get from the beginning of a project such as a flooding scheme to the point where one is on site and concluding the physical phase. The reason it takes time in the case of flood relief is that we might have to go through the four seasons of the year not once but twice to be absolutely sure that the proposed scheme will work.
On the property side, I was waiting for the Deputy to get to the specifics. I think he was referring to Garda stations. The Deputy will probably be aware that the decision on the Garda programme does not rest with Office of Public Works. The decisions are taken on a tripartite basis, between the Garda, the Department of Justice, Equality and Law Reform and the Office of Public Works, but the priority programme is not devised by the Office of Public Works. It is the Garda and the Department of Justice, Equality and Law Reform who decide which Garda stations are a priority.
The good news, however, is that irrespective of those procedures my Department has been looking at the point made by the Deputy. There is a great deal of property available throughout the country and there are many ongoing refurbishment works. We have just completed a study in this area and soon we will be in a position to move on that list with the agreement of the Department of Justice, Equality and Law Reform.
The Deputy's other point was about joint ventures. We already conduct joint venture projects. I am aware of properties where we have been able to conclude swaps, joint ventures or use a different property. Garda stations are an example of where the commercial ethos of the Office of Public Works is evident. While we do the work and take full responsibility for it, the lists come from the Department of Justice, Equality and Law Reform and are not created internally at the Office of Public Works. That is a difficulty I encounter in dealing with Deputies when they ask the reason for the delay on a property.
The other difficulty in the area is the process of negotiation with potential sellers which can often take an enormous amount of time. We must advertise for sites and review all of the proposals submitted. We must negotiate on a given site and then talk to the Garda to see if it is suitable to its needs. We must talk to the local authorities about the services. This is a long process. Often the delay is not in my office but with sellers who become greedy when they think the State is involved and others who join in the process.
We deliver the programme, by and large, but there is no way of circumventing the process when one is dealing with large sums of money on behalf of the State, trying to deal with various different bodies, trying to keep the local community on side and explain to them what is happening, and trying to deal with the Garda and the other Departments involved. There are a range of issues in that regard which tend to complicate the process in the normal course of events. It just takes time to deliver the end result. Some projects progress quickly and some do not. Over the past four years one or two projects spring to mind which we have tried to resolve and it has proved impossible to do so.
The Government is taking an in-depth look at the decentralisation programme. There is a Cabinet sub-committee involved in it. My Department is anxious for decisions to be taken and we have provided an input. We obviously want to see the shape of the decentralised programme. The Minister for Finance has made announcements and confirmed them in reply to parliamentary questions in the Dáil. I hope that process will come to fruition in the not too distant future and that we will begin to see a new decentralisation programme being put in place throughout the country.
Will it be announced at election time?
This was first announced by the Minister two budgets ago. There has been a great deal of negotiation with the social partners, who are directly involved in this. The trade unions in the various Departments are keenly interested in this process. They have been involved in the discussion process. All Departments have had to examine the options available for decentralisation to see if they fit and to see with which areas they may be married. There is no point decentralising 500 jobs to a village of 1,000 people. The infrastructure would not be able to cope. That is an extreme exaggeration——
Cahirciveen.
No, they must be able to manage what can be realistically expected and delivered when decentralisation takes place. I am optimistic that will happen and my office looks forward to playing a central role in the delivery of decentralisation throughout the country.
I already outlined in my opening remarks that a substantial flood relief programme is in place with many completions and start-ups this year. I expect the programme to continue for years but they are flood defences. Where schemes have been installed, they have been successful. The Deputy mentioned south Galway, which is a small scheme. I am not a hydrologist or engineer, but we may be able to do some small things there.
Many Deputies have made representations to me about land that floods whereas it is wetland that dries out in the summer. There is a fundamental difference between the two. That should be borne in mind. It sounds a funny way to put it but there is much truth in it. We have delivered a successful flood programme throughout the country.
On offices and accommodation, I am pleased to say that we are extremely expert in the marketplace in terms of acquiring, refurbishing and restoring properties. That is widely acknowledged. It is important we maintain a balance. We have reduced the level of rented or leased accommodation to about 23%.
Is that the £15 million?
Yes, that is about right. We need to keep a lease portfolio on the books for flexibility reasons. I do not see it going much beyond 80% owned and 20% leased. My opinion, that of the office and wise counsel is that it is about the best balance for the State. While rental costs in Dublin have increased to £20 to £30 per square foot, on average we pay about £20, which is of great credit to staff and the way they can keep our figures within that range. The average figure is rising given what is happening in the market.
We are waiting to see what happens with the decentralisation programme. We are also looking to the greater Dublin area. The world has changed and, with the way the State is going and with improvements in the public transport system in future, more options will be created in the utilisation of property in the capital city. I am pleased because we have improved substantially the leased to owned ratio in recent years. It is one of the things I wanted to do. Now that the funding is available, it is time for the State to buy back property. Some of the design-build-finance projects we rolled out a few years ago have been bought back at substantial savings to the State. I am pleased with that programme and how it is working.
I compliment the Minister of State on his detailed presentation. I have questions on two specific areas. Some £20 million is being provided this year under subhead D primarily for asylum seeker accommodation. As we are half-way through the year, how much of that has been expended and what is the rate of progress? Will £20 million be more than enough or insufficient for the full year?
Earlier this year the Minister of State's office placed advertisements in the newspapers seeking sites in Portlaoise town for a new divisional headquarters for the Garda Síochána in Laois-Offaly. I welcome that. Is there a provision in this year's Estimates for that or is it expected to be next year before site acquisition stage is reached? What are the plans for the existing divisional headquarters? The advertisements have appeared in the newspapers seeking submissions from property owners or developers about sites. What is the timescale and sequence in dealing with such a project?
I made the point that, when dealing with property purchase, flood relief schemes and so on, we are at a disadvantage in that we cannot know with absolute certainty at the beginning of the year. What we do is provide within each budget what I consider sufficient amounts of money to get moving on various projects. I confirm that the money exists to purchase the site in Portlaoise.
We are in the heat of the kitchen in the most commercially difficult market of all, namely, the property market, and we are extremely successful at it. I assure the committee that we are always able to act quickly where the State deems it necessary to do so in terms of property. As Commissioner Benton said to me, where any property is sold, bought or leased, a full economic appraisal is conducted on a case by case basis to ensure we are at the cutting edge. We have used the services of the National Treasury Management Association and others to advise us. We use the best advice available in the marketplace.
We have spent about half the money allocated for asylum seekers. I do not know whether we will spend it all. It is the ballpark money provided.
I welcome the Minister of State and his officials. I formerly had Deputy McGrath's position and I have an interest in this area. I agree with the Minister of State about office accommodation and the meeting rooms have been substantially improved and are state-of-the-art. I do not understand why air conditioning was not installed. Is it planned to install it?
This was the decision of Members of the Houses. It was not my decision. The first decision made by the steering committee comprising representatives of all political parties was that there would not be air conditioning.
That is most unfortunate because they are very uncomfortable, especially those which face the sun. People must bring in fans and they find it very difficult to stay in their offices in warm weather. The Minister of State should examine the offices because they are hostile and not conducive to working long hours. People are suffocating in some of the rooms and that is why so many people are to be seen walking around outside. Air conditioning will have to be installed. The atmosphere in this room is different from that in the new rooms. The lack of air conditioning spoils what is a very good facility.
I will answer that point specifically because the Deputy is right. We are aware of it and it was one of the points which came through in the survey. I did not need a survey and neither did my officials to know there are problems. We will have to deal with it. The heating and air ventilation is not as satisfactory as we expected. I assure the Deputy it is a priority once the Dáil rises to figure out how best we can deal with it.
We opted for natural ventilation. Clearly the type of glass we used has not delivered what we thought it would. What the Deputy said is true. I am aware people have installed fans. I have been over to see the offices, as have my staff. The problem must be and will be addressed. I take the Deputy's point that it would be a shame to spoil what is a superb facility by the working conditions not being right. It has always been my priority in terms of laying out and fitting out the offices and their ambience to give the best quality available to Deputies, and we have done that. I accept the criticism and we are dealing with it.
The architects in the Office of Public Works deserve to be complimented on the way they integrated this building with Leinster House. In the process they did not damage in any way the integrity of the original building or the surrounding buildings, including the College of Art and the National Library. The integration of the building with the complex of buildings in the vicinity of Leinster House took some ingenuity. The use of sculptures in the House, which were meant for another era, is also useful and reminds us of our athletic days.
I very much appreciate Deputy Deenihan's approach, which has often been critical but constructively so and positive when necessary. The building is quite outstanding and the many parliamentarians and architects who have come here from other countries have been fulsome in their praise. I hope there will be some good news and perhaps a major award for the offices, which will give a public dimension to what the Deputy has said. There are difficulties, as often arise in commissioning a new building, but hopefully we will resolve those in the very near future. I mentioned earlier that the face of Leinster House needs to change. The survey of Deputies and Senators, which had a huge response and more than one would have expected, showed that overall they were pleased with the building. Car parking and other developments will transform Leinster House. We hope to resolve the question of facilities management. This is a huge complex which we do not manage. We are blamed for many things, but Leinster House can no longer be managed in its historical sense. I am not being critical of——
We will return to this after the vote in the Dáil.
Sitting suspended at 8.35 p.m. and resumed at 8.55 p.m.
We will resume on Vote 10 - Office of Public Works.
On the accommodation question, will facilities be available for public functions or functions related to the Dáil? The galleries outside the door here would be very appropriate for, say, art exhibitions or book launches. Are there any arrangements in this regard from a management point of view because the location would be a very useful facility for art exhibitions, book launches and so on?
I am pleased the gymnasium is progressing. Perhaps the Minister of State will bring us up to date on what is happening. Has planning permission been received for the work of adapting the building and will it be open when we come back in October when I am sure many of us will be trying to get fit for the general election? As we will be trying to keep in shape between October and May, I hope the gymnasium will be open in October.
I have often raised the issue of the Listowel social welfare office, particularly access to the different floors, and I am pleased that work on the building has commenced. Will the Minister of State confirm that wheelchair users and people with other disabilities will be able to gain easy access and circulate freely throughout the building?
I recently raised in the Dáil the issue of Castleisland Garda station in County Kerry. The station was subjected to an arson attack some time ago which probably solved the problem to some extent. As a result the gardaí were accommodated in Portacabins for some time and they are now in rented accommodation. What is the up to date position in regard to acquiring a site for the new Garda station? The 16 gardaí in the station are responsible for the town of Castleisland, which has a population of more than 2,000, and a large hinterland, including Kerry airport. There is a lot of traffic in the area, including many tourists during the summer season.
On embankments which were formerly under the supervision of the Land Commission, there are a number of embankments along the Kerry coast which are particularly vulnerable because of marine conditions. An embankment at Carraig Island, Ballylongford, has been totally breached. At times half the island is under water. Last year I asked the Minister of State to look at this area. The Office of Public Works should be given responsibility for the maintenance of the many embankments which were formerly under the supervision of the Land Commission. At present various parts of our coastline are being breached because of the lack of maintenance over many years by the Land Commission. Perhaps the Minister of State will refer to that issue, including whether any report was drawn up on Carraig Island, Ballylongford, County Kerry.
Previous speakers referred to decentralisation. I tabled a Dáil question this week seeking confirmation on the number of public servants who had applied for transfer to Kerry. Given that the number was over 1,000, Kerry is a very popular destination for decentralisation. People would not have to be given bonuses to move to Kerry; in fact, the opposite may be the case.
For the summer period.
Obviously Kerry is a very popular destination. Some 150 civil servants were anxious to move to Listowel.
You are doing all right; they are moving to Cahirciveen.
Given that there will be a new social welfare office in Listowel it will be even more attractive.
Some very fine work has been carried out on the Tralee ship canal. It was partially open last Christmas when a former high ranking politician sailed up the canal with Santa Claus. It was rumoured this was the official opening of the canal. The Minister of State might confirm his intention to perform the official opening himself some time in the future. Will the Minister of State give an update on the progress of the Tralee ship canal? I understand there is a problem with the gates. When will work finish on the canal and when will it open? The work on the canal has cleaned up the area considerably. It is part of the Lee valley development project, a fine project which deserves to be mentioned here. Much long forgotten old stone work has been exposed and looks very impressive.
I am delighted that so much money is being spent on the Irish colleges in Louvain, Rome and Paris. If the archives of the colleges are not already available, I suggest that money be provided for work on the colleges' records and to make them available for study. A number of students from Kerry went to the Irish college in Paris. The college has an association with Daniel O'Connell, for example. There was regular traffic from south Kerry to Paris and a number of Kerry people studied there. It would be interesting to see those names made available. Will the Minister of State inquire as to the existence of the colleges' archives and whether they are accessible? Money should be made available for this work, if that has not been done already.
The Minister of State's officials will not be surprised when I raise the question of the drainage of the Cashen River. An extensive report was carried out by Dr. O'Kane of UCC. I saw the preliminary model of his proposal, which was very innovative and creative. He planned, not only to alleviate the flooding on the Cashen river but also to create a tourism product. Dr. O'Kane proposed to create an artificial lake on the river. He said the light at the location was unique and resembled the polders in Holland. The area, which is inhabited by rare migratory birds, has been neglected for a long time. Has money been provided for this project? The Minister of State has been supportive of this project. His predecessor as Minister of State, the late Deputy Coveney, initiated the project with funding of £70,000.
I thank Deputy Deenihan for raising these issues. Yes, is the answer to the question about gallery space in Leinster House. It was designed to create a substantial public space for Deputies and Senators and for holding exhibitions. This has been done in Westminster and in the Reichstag. There may be an Irish exhibition in Parliament House in Australia in the near future. I would like to see the space used. Its use depends on the management of the precincts of Leinster House.
Everything is in place to proceed with the gymnasium. A range of works is scheduled to begin in Kildare House but it will not be possible to have the gymnasium opened in October. It will be ready by April next. The project is in its first phase. We had hoped to begin this work sooner but this was not possible because committee room G2 was required for use.
Many Members of the current Dáil may not be able to use the gymnasium.
I am sure Deputy Deenihan will be back.
If not I may get a few votes for the Seanad. They may need an instructor in that House.
It has been agreed that work will begin in November and finish in April.
Deputy Deenihan has raised the question of the Listowel social welfare office on a number of occasions. He is aware that a new building is being put in place. The social welfare offices will be entirely at ground floor level and there will be full disabled access to the building. That will resolve a problem for a number of people who have been using the old building which was not satisfactory. It will be open in October.
Castleisland is not on the priority list but I will raise the matter with the Department of Justice, Equality and Law Reform and the Garda authorities.
We have looked at the issue of embankments, on previous occasions although we have been preoccupied with the flooding problems of the past six months. There is much merit in the point made by Deputy Deenihan regarding the totality of the embankments which existed under the Land Commission. There are 322 miles of embankments, giving protection to approximately 46,000 acres of land. It is my intention that the Office of Public Works should take responsibility for this matter. I will not be able to make immediate progress on the entirety of this problem, nor would it be wise to do so but I will initiate an ongoing programme to deal with embankments. It would not be advisable for the Office of Public Works to take responsibility for all of the embankments at once and not be able to begin work for a considerable time. I have spoken to our chief engineer, Mr. Tony Smith, about this issue on many occasions. He is here this evening and is well aware of the matter. He has proposals in hand to deal with it in the manner suggested by the Deputy.
I spoke about decentralisation earlier. I am sure Kerry is a lovely place, as are Waterford, Galway and many other places throughout the country.
Are there rare birds down there?
Very rare.
We have Jackie Healy-Rea.
The quality of the applications has been very high. The Government will come to a conclusion on the issue very shortly. That decision will depend on the quality of the applications and the standard of delivery of services. I have seen the submissions from Tralee and Listowel and I am aware of the advantages offered by both towns.
I thank Deputy Deenihan for his comments about the Tralee ship canal. The dredging works on the canal and basin, together with a swing bridge at Blennerville have been completed. Works on the restoration of the lock gates is in progress and tenders will be invited shortly for the civil engineering and hydraulic works which will complete the project. All works are expected to be completed by September or October of this year. On completion of the works, responsibility for the canal will transfer to Tralee Urban District Council. It was a worthwhile and imaginative project and will bring further benefit to the great kingdom county of Kerry.
With regard to the Irish colleges in Paris, Rome and Louvain, the Deputy is correct about archives which are important. I acted on Paris because of the state of its library, where ancient manuscripts might have been destroyed by excessive dampness. Archives and libraries are to the forefront of our concerns and we seek to have them restored, with the agreement of their owners, and made available to scholars and others. It is a coincidence that the Paris Irish college was founded by a Waterford man. I am also interested in St. Isodore's in Rome which was founded by another Waterford man.
They were attended mostly by Kerry people.
A fair point. It is good for the State to have a cultural and educational presence on the Continent to carry on the great work of Irish people in the past.
The National University of Ireland, Cork, presented different options to deal with the flooding on the Cashen. The recommended solution involves installing pumps to drain 15 areas, called polders. This solution will be tested by installing a pump in one of these and monitoring the results. Once a site is selected for the pump in this polder, negotiations with the landowner will begin. A power source for the pump is being sought from the ESB and planning approval from Kerry County Council. Arrangements are being finalised with the university to conduct a baseline study of the selected polder. It must be monitored for at least a year prior to the pump's installation. A computer model will put on the Internet so that the county council and public can view it, which goes further than the Deputy requested. This is a difficult problem but we are reaching a solution.
I thank the Minister and his officials for his response because this is not an ordinary drainage scheme but one requiring ingenuity, scientific knowledge and research. He and his officials did an excellent job.
I thank the Deputies for their co-operation with the Estimate and my officials for their work in preparing it. I appreciate the positive comments on the Office's work.
On behalf of the committee, I thank the Minister, Deputy McCreevy, and the Minister of State, Deputy Cullen, and their officials for attending today. I also thank the members for the manner in which they conducted the discussion.