SELECT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate

Estimates for Public Services, 2004.

Vote 1 — President’s Establishment (Revised).

Vote 5 — Office of the Comptroller and Auditor General (Revised).

Vote 6 — Office of the Minister for Finance (Revised).

Vote 7 — Superannuation and Retired Allowances (Revised).

Vote 8 — Office of the Appeals Commissioner (Revised).

Vote 9 — Office of the Revenue Commissioners (Revised).

Vote 11 — State Laboratory (Revised).

Vote 12 — Secret Service (Revised).

Vote 15 — Valuation Office (Revised).

Vote 16 — Civil Service Commission (Revised).

Vote 17 — Office of the Ombudsman (Revised).

Vote 10 — Office of Public Works (Revised).

Chairman

No. 1 on the agenda is the consideration of the finance group of Revised Estimates. On 26 February the Dáil ordered that the following Revised Estimates for Public Services, 2004 be referred to this committee for consideration: Vote 1 — President's Establishment; Vote 5 — Office of the Comptroller and Auditor General; Vote 6 — Office of the Minister for Finance; Vote 7 — Superannuation and Retired Allowances; Vote 8 — Office of the Appeals Commissioner; Vote 9 — Office of the Revenue Commissioners; Vote 11 — State Laboratory; Vote 12 — Secret Service; Vote 15 — Valuation Office; Vote 16 — Civil Service Commission; and Vote 17 — Office of the Ombudsman. I remind committee members that there is no Estimate for the Houses of the Oireachtas because provision has been made separately under the Houses of the Oireachtas Commission Act 2003.

Before I call on the Minister of State to make his opening statement, I wish to state we discussed the Estimates for 2003 on 18 June 2003, halfway through the year when half of the money had already been spent and the other half had already been committed. The debate was, therefore, a waste of time and served no purpose. This year we are having the debate on 30 March which is somewhat better but, again, almost as useless——

Ms Burton

It sure is.

Chairman

The Abridged Estimates Volume for 2004 was published in November 2003 and followed by a two day Dáil debate. The original provision in the finance Estimates was for €1.266 billion. As a result of the changes now being made, the figure stands at €1.267 billion, a difference of less than one tenth of 1%. This debate should have taken place last November or, at the very latest, December. I know of no credible business organisation which would discuss its budget three or four months into the year.

The information being provided was substantially available in the autumn. Whether it is the procedures of the House or those of the Departments which do not allow a full debate on the Estimates when first published, it is a grave omission. The Revised Estimates can only be approved after the budget but as we have seen in previous years, the difference between the original and final Estimate is minuscule. It is no justification for holding off a debate for three, four or five months just because there might be a change of 1% in the overall figures.

We should have the debate on the Estimates for 2005 before the conclusion of this year. To do so part of the way through the year is a waste of parliamentary time and not to do our job but just to pretend to the public that we are. I ask the Minister of State to convey this message to the Minister and his officials to see if we can engage in a meaningful discussion on the Estimates before the calendar year begins, as every other organisation would do.

The Revised Estimates were referred to this committee some time ago and do not have to be returned to the Dáil until June. This is the first committee to discuss the Estimates relevant to it. Most other committees will not discuss the Estimates relevant to them until April or May, which is a complete waste of time in terms of Oireachtas committees exercising their functions and remit in making Departments accountable.

I wished to make this opening comment. To an extent, it takes from the value of the whole debate when it is held so late at a time when it can have no impact on the actual Estimate of expenditure. This debate should have taken place last autumn.

Mr. R. Bruton

I agree strongly with what the Chairman is saying. The tenor of the remarks in my opening statement reflects this. We are being asked to allocate to the Office of Public Works €300 million plus but there is not a single indicator in respect of over-runs or how projects are faring in achieving value for money. We are voting through lots of money for the Revenue Commissioners and other bodies without a single indicator in respect of activity levels, productivity or efficiency. There is no mention of outcomes, although we are aware that the Revenue Commissioners are achieving great results in many areas.

During the debate on the Finance Bill 2004 the Minister for Finance, even though he was looking for us to sanction the carry-over of spending from one year to another, refused to agree to an amendment in my name that would have provided us with significant information on capital projects costing more than €100 million. This would have allowed us to track them to see if value was being achieved. This is a charade and the Chairman is absolutely right to draw a line in the sand. We are going to waste four hours. We do not have the information we need to make intelligent comments on a lot of the issues raised and in respect of which, as the Chairman rightly says, money has already been committed. I remember when I first became a Member of this House in the 1980s that there was a decent book containing information on public expenditure that tried to indicate activity levels, outcomes and what programmes were designed to achieve. It was a companion to the Estimates.

We are supposed to be in the era of IT, when information is instantly available, yet we get page upon page of arid and useless information focusing on incremental and percentage changes from one year to the next. This focus on incremental change means that we never see the big picture. We waste billions of euro because of a failure to introduce serious reforms in the delivery of public services because we engage in this charade. This is not just the fault of the Department of Finance or the Minister. In every debate to which I have been a party there has been no effort to focus on what it is the Dáil is about in scrutinising Estimates. We should be in the job of seeing whether we are achieving value for money and getting to the problems that need to be attended to or whether there are indicators that we are making headway and getting somewhere.

This is a useless format. As each year passes I get more and more frustrated because it gets worse. It has become even more of a rubber-stamping exercise. This has become a totally Executive dominated system in which the Oireachtas does not have access to the information that would allow it to make an intelligent contribution to the debate. I hope the Opposition parties can adopt a firm resolution that if in power in the future, they will completely chuck out this farce and allow Members to participate in a real debate.

Ms Burton

This committee should focus on changes that would make the Estimates debate more relevant. For instance, if the information provided was amended to include the number of civil servants and Civil Service hours employed in regard to each of the activities, one could get the cost per civil servant or per hour, although this might be crude. I am sure some civil servants would complain that it was a little like school league tables and did not show everything. There are a number of simple measures in respect of which, if we had information on the number of hours worked in particular areas or under particular headings, it would be possible to carry out comparative examinations to get some sense of whether matters are getting better or worse or the position is more or less the same.

I was very surprised to find, for instance, when responsibility for public private partnerships had been transferred to the National Treasury Management Agency where presumably people were paid much better that there was still a public private partnership section within the Department of Finance. I would have thought once responsibility had been transferred the need to maintain a full section in the Department thereafter would at the very least diminish significantly. I am sure that one of the many assistant secretaries in the Department could cover the brief without having to keep a lot of staff on board.

We could also look at some of the techniques used in the private sector in accounting, particularly where companies have Stock Exchange quotations. Departments should give an early indication when something is going wrong, for instance, when a programme or project is running way over target. If they were private companies, they would have to send a message to the Stock Exchange or, where the situation was very bad, issue a profit warning. One regularly sees items in newspapers stating a project such as a tunnel will cost an extra €100 million. We have the spectre of several medical institutions, including Blanchardstown Hospital in my constituency where the relevant figure is €105 million, Ballymun Health Centre, Mullingar Hospital and Naas General Hospital, where capital facilities have been commissioned and much money has been spent but where the facilities will never open unless we are lucky enough to have an election in the offing. Perhaps they will all be miraculously opened by 11 June. Publicly quoted companies would not be allowed to carry on with this subterfuge. They would not be allowed to commit to capital expenditure and then not commission the facility. I will return to this matter.

General accounting procedures provide the ground rules, on which the Chairman is well positioned from his experience to advise. This would make the work of the committee more meaningful. An expanded role for the Office of the Comptroller and Auditor General would give the Comptroller and Auditor General a real job with regard to budgeting, as opposed to examining historic expenditure. We could then examine achievements where budgets had changed and the reasons the proposed budgets had not worked out.

These are changes in which I would be interested. It is up to the committee to produce a list of the ones it sees as feasible.

Chairman

I now call on the Minister of State to make his opening statement. I thank him and his officials for attending. We have had a slight digression on a general point which is a bugbear with most committees which engage in an Estimates debate several months into the relevant year. This committee will try to do something in that regard. We also ask the Department of Finance, the lead Department in producing the Estimates each year, to take on board its opinions.

Minister of State at the Department of Finance (Mr. Parlon)

The outturn figures for the previous year are important if a comparison is to be made but these are not available until some time the following year. I am sure the Department of Finance will comply fully. However, there are constraints in that if the debate was to be brought too far forward, there would be no comparative figures available.

I am pleased to appear before the committee to introduce the Estimates for 2004 for the finance group of Votes which now stands at 12. In 2003 the Houses of the Oireachtas were funded from a dedicated Vote. However, as members will be aware, with effect from 1 January this year these costs are paid directly from the Central Fund in accordance with the Houses of the Oireachtas Commission Act 2003. I will take the Vote for the Office of Public Works, Vote 10, later and have asked my secretary to circulate a copy of my opening remarks.

Excluding the provision for the Office of Public Works, the total for the finance group of Votes amounts to almost €739 million net. The three largest Votes are the Votes for the Office of the Revenue Commissioners which amounts to €328 million; superannuation and retired allowances which amounts to €229 million, and the Department of Finance which amounts to €127 million. Members of the committee have been provided by the Department with a background briefing on the Estimates which are presented today for its approval.

Before dealing with the individual Votes, I wish to make a few brief general comments about the economic background to the Estimates, in particular, the measures taken by the Government to manage and control public expenditure. When the Minister for Finance presented the Estimates for 2004 last November, he said they were prepared on the basis of improving the capacity of the economy in order that it would be well positioned to benefit from the expected international upturn; maintaining and creating employment, and improving Ireland's competitive position. Key elements of this strategy are the creation of a low inflation environment; keeping public spending increases in line with resources; keeping debt levels low; and planning and delivering a coherent investment strategy. Over the past two years the Government has kept a tight rein on spending and reduced the gap between the growth in public spending and the growth in revenue. Such a policy of prudent management was necessary to protect the significant economic gains we have made in recent years.

In 2003 the Government introduced revised expenditure management arrangements. These included the submission by the Minister for Finance of monthly reports to Government on emerging trends in the public finances. In addition, the current four largest spending Departments, the Departments of Education and Science; Health and Children; Social and Family Affairs, and Justice, Equality and Law Reform, submit similar reports every two months. For the past two years the Minister for Finance has published monthly profiles of voted spending to facilitate public understanding of monthly trends. These measures helped to ensure spending came in on target in 2003. I reiterate the Government's determination that the 2004 allocations will be strictly adhered to.

The need for continued restraint and ongoing strict management of spending is obvious in ensuring value for money for the record amounts of public expenditure in 2004. Spending growth must remain at a reasonable level in the medium term. As the Minister has said, this means that future annual public spending increases will have to be kept very close to this year's level. The Revised Estimates for 2004 provide €41.2 billion for gross total spending on services. This represents 35% of the value of the economy and is a significant level of investment.

One of the key areas where value for money is crucial is capital investment. Under the new rolling five year multi-annual capital envelopes announced in budget 2004, the Government has committed to keeping capital investment, to address the country's infrastructural needs, at 5% of GNP over the period 2004-08, in which total investment under the capital envelopes will be €33.6 billion, of which nearly €5.6 billion in Exchequer capital will be provided in 2004.

In what is a significant development Departments will be allowed under this new arrangement to carry over unspent Exchequer capital of up to 10% of voted capital from one year to the next. The new capital envelopes will facilitate better planning and management of capital programmes by Departments and agencies and will be complemented by the introduction of revised capital appraisal guidelines later this year which will ensure better value for money is secured in the delivery of capital programmes and projects.

The envelopes will be underpinned by a multi-annual capital investment framework agreement between the Department of Finance and each Department. These agreements will, among other matters, set out the objectives of the capital investment and requirements with regard to reporting of financial and physical progress on major projects and all capital programmes. It is intended that future public capital programmes will include more information on major projects and programmes when the capital envelopes are fully operational. This will improve accountability and Dáil consideration of the Estimates.

Up until the international slowdown took hold, a thriving economic climate had been created and we recorded one of the best economic performances in the world. From 1997 to 2002 Irish GDP grew by an average of 9%, compared to an average of about 2.5% in the European Union. The fruits of this economic success were put to good use. The taxation system has been significantly reformed, public services have been improved while provision for the future has also been made with the establishment of the national pensions reserve fund. The public finances have been placed on a sound footing while the general government debt level has been more than halved from 73% of GDP in 1996 to 32% in 2003, the second lowest in the European Union. We will continue with this approach. For 2004 the debt-GDP ratio is forecast to remain at 32% at year end. In 2003 our sound management of the public finances resulted in the general government balance recording a surplus of 0.2% for the year. This year a general government deficit of 1.1% of GDP is expected, as we continue with the high levels of infrastructural investment of recent years.

The days of double digit economic growth are over and Ireland is moving towards a more sustainable level of annual growth of 4% to 5%. A pick-up in the international environment has been evident for some months and this will benefit Ireland. We expect GDP growth of 3.3% and GNP growth of 3% per cent this year. Even at these lower rates of growth, we are well above the European average. The European Commission expects EU area growth of an average 2% this year. Our economic record is one of which we can be proud. It far outshines that of our main European partners.

Our relatively high level of inflation has been a cause for concern. However, it has halved over the past year to 1.7% in February, its lowest level in four years. The gap between Irish inflation and the EU average is close to its lowest level since the beginning of monetary union. However, we must continue to focus on competitiveness if we are to copperfasten the economic progress we have made so far and enhance our capacity to benefit fully from the international upturn. That is the reason we must ensure wage developments remain moderate. Otherwise we will lose competitiveness and jobs.

The 2004 Revised Estimates for Public Services published on 26 February 2004 reflect changes in voted expenditure announced by the Minister for Finance in the budget together with some adjustments to voted expenditure which arose thereafter. Total net voted spending in 2004 will be €32.9 billion, an increase of 7% on the projected outturn for 2003. Total gross voted expenditure in 2004 will be €41.2 billion. Gross spending includes additional spending from the social insurance fund and the national training fund and gives a fuller picture of the level of Government investment in services and infrastructure.

The Government is committed to spending such public resources as can be made available to provide for the welfare of our people and improve the productive capacity of the economy. Within the overall spending increase of €2.9 billion, or 7%, provided in the Revised Estimates Volume, the bulk of this was provided for the Department of Social and Family Affairs, an increase of €843 million or 8% over 2003. The provision for the Department of Health and Children increased by €777 million or 8%, while funding for the Department of Education and Science increased by €725 million or 12% over 2003.

In summary, some €2.3 billion or 82% of the total increase was allocated to the key spending areas that provide for social protection and inclusion. This shows our commitment to provide resources for key areas. In improving the productive capacity of the economy, 5% of GNP is being allocated for infrastructural development while there is record investment in the area of science and technology.

The Estimate for the Department of Finance for 2004 amounts to €127 million, a net increase of €36.8 million over the 2003 outturn. Within this Estimate, the following are the major programme expenditures for 2004: €16 million is provided to meet expenditure on EU co-funded programmes, including subhead N1 — peace programme, subhead N2 — North-South INTERREG, subhead O — Ireland-Wales and Transnational INTERREG, subhead JI — Structural Funds technical assistance and other costs, subhead J2 — technical assistance costs of regional assemblies. In addition to these co-funded programmes, €1.3 million is provided in subhead N3 for the Special EU Programmes Body.

Just under €9 million is provided to support the transition of the public service to an information society. This includes a sum of €7.33 million under subhead P in respect of information society expenditure. This subhead provides a central mechanism to support Civil Service wide e-government requirements and respond to opportunities under the Government's new action plan for the information society, New Connections, approved in March 2003. Subhead P represents 17% of overall information society funding of €42.2 million allocated across 12 departmental Votes for major projects, primarily in the areas of e-government and e-business. A further €1.59 million is provided under subhead R — procurement management reform — to provide funding for a range of public procurement management reform projects and initiatives, including electronic procurement at national and local level which will modernise the public procurement environment and deliver better value for money.

A sum of €12.3 million is being provided under subhead E — Ordnance Survey Ireland — in the form of grant-in-aid. The OSI was established as a body corporate under the Ordnance Survey Ireland Act 2001 with effect from 4 March 2002.

A sum of €7.6 million is included in subhead L for payments to the promoters of certain charitable lotteries which are national lottery funded. The scheme is a focused initiative intended to address the circumstances of those private charitable lotteries which have products in the marketplace in direct competition with the national lottery.

Following the announcement in the 2004 budget regarding the new decentralisation programme which allows for the relocation of 10,300 public servants from Dublin to 53 provincial locations, a capital provision of €20 million which can be used to meet any up-front investment costs associated with the new programme is provided for in subhead S.

Vote 9 relates to the Office of the Revenue Commissioners. The net Estimate, at €327.7 million, is up €25 million or 8% on the 2003 outturn. The bulk of the Estimate, €264.3 million, is for pay and allowances for some 6,465 staff.

Outside of salaries, the main increase in absolute and percentage terms is under subhead A7 — consultancy services. This increase is required to facilitate a major computerisation project which will replace the core PAYE system by October 2005 with an improved system which, among many other matters, will provide on-line facilities for PAYE taxpayers. I should emphasise that the expenditure in this area is not on consultants of the "advise and recommend" variety but on hiring high quality computer experts to assist Revenue staff in building the new system.

The Estimate also provides continued support for the Revenue on-line service commonly known as ROS. Since it commenced in September 2000 with three simple forms and a small number of customers, the service has rapidly expanded to cover most business tax returns. Last year more than 40% of all tax returns for the self-employed were filed electronically. Up to the end of 2003, over €12 billion in tax revenues had been paid through ROS. Currently, more than 80% of vehicle registrations are processed on-line. Members of the committee may also be interested to know that ROS recently won a prestigious top award which recognised it as a leading innovator in digital media.

I have concluded my opening statement. I thank the committee for its attention and commend the Estimates to it. I will try to supply any further information or clarification that members may request.

Mr. R. Bruton

Waste of money is endemic in the Government's approach to financial management. We saw it in the up and down, see-saw ride of public spending before and after the general election. In the approach to the general election, within a period of 24 months, it increased its spending by 48%, an astonishing level of profligacy in public spending, all aimed at coaxing people to vote for it. That was done at a time when the tax base, which one would have imagined was the basis for delivering this, was shrinking. There was a huge commitment to public spending and a shrinkage of tax owing to measures such as the introduction of SSIAs.

After the general election the money had been spent, no value had been achieved and the Government faced a dilemma. What was it to do? It did two things. First, it left all the bureaucracy intact and pushed ahead with benchmarking. It did all of these things but screwed the little guy, the person who would be dependent on public services, who needed home help, who expected to receive a disability allowance, who was participating in community employment to try to get back into the workforce. These are the people who were sacrificed and who went to the wall.

The second thing the Government did was to adopt a strategy of introducing stealth taxes. Any charge that could be increased was increased. This spanned every walk of life from motor tax to bin charges. To ensure councillors would have no say authority regarding bin charges was given to the manager in order to side-step democratic accountability. The Government went after anything that moved. Ordinary income tax payers who expected indexation of their tax allowances found it denied to them year after year.

This is endemic in the Government's approach to budgeting. Ministers arrive to this imaginary event of budget day and all it does is truncate any decent scrutiny. The Chairman has put his finger on the problem. What we are going through today is a farce. We will be sanctioning large blocks of capital spending with no report on the efficiency with which public sector projects are being delivered. No routine information is being provided for the committee on which to make any judgment as to whether we should go on, reverse or stall on any of these projects. It is all to be accepted on faith because there is some cause we might be serving.

On current spending, there is not a single activity lever. There is no mention of efficiency, or productivity, which I would have thought was very close to the heart of the Minister of State. I was sure he would like to have seen something about how well we were doing in various areas. We have heard that Departments have been breaking their backs under the SMI, producing performance indicators and so on, but we have seen no evidence of this.

We are expected to vote through this useless material on year to year incremental changes. It damages the way in which we consider public spending that this annual charade continues where we focus exclusively on minor incremental changes and never look at whether the system is delivering what we want it to achieve. We are being asked to perpetuate this charade today. We seem to be in a situation where, once spending is increased, the only way to make adjustments when money is tighter is to hit the little guy. There was a furious effort to spend over a period of 24 months and while discretionary spending is cut, the bureaucracy remains intact.

The Government had a great opportunity in the case of benchmarking. The benchmarking group told it that it should pay €1.2 billion, of which 75% should be conditional on acceptance of a new reform agenda. It did not produce any. No trade union or representative was pushed beyond the established positions in any of this so-called activity work and performance verification. No new ground was broken in any area of public spending to deliver greater efficiency and better performance. It was a paper pushing exercise in which numerous activity plans were generated to justify the payment. No agenda of reform drove change. No one who visits a hospital or any front line public service will see evidence of better delivery.

Everyone in the House recognises that decentralisation represents a major change in how we do business. Today we have our first opportunity to assess the financial implications and the Minister of State has not gone beyond the loosely estimated sum of €20 million. There has been no effort to assess the property implications of this move. I tabled a parliamentary question to ascertain the accommodation arrangements of the existing services it is proposed to move but the Minister of State has not yet replied. It is absurd that this decision was made without even knowing the accommodation arrangements for those whom we propose to move. The Minister of State has confirmed that no risk assessment has been made of the impact of decentralisation on the effectiveness of any of the organisations concerned. The Equality Authority states 80% of its staff are not moving. How then can we continue to have an Equality Authority?

The private sector regards people as accounting for 80% of the market valuation of a private company producing widgets. Public servants represent a far higher proportion, yet we are willing to move people. This will entail the demolition of some of the organisations concerned without any assessment of the risks or implications and without consultation with staff. That is not the way to make decisions in a modern democracy.

People expect that we will opt for decentralisation on the basis of a strategic plan, over which the Government will stand and in respect of which it will state it has considered the impact on organisations, the property implications and staff needs and taken measures to protect against them but nothing of that kind was done. Instead, Phil Flynn is wheeled in to work the oracle and find a way of implementing a programme which the Government has not thought through. It makes a farce of representative democracy that decisions are taken in this way without debate in this House.

Social partnership has made a significant contribution, yet we had to have a debate in the Oireachtas about Sustaining Progress. There is no belief in the Government that winning social change involves citizens, those who elected the Government and Parliament. We should be a direct party to these matters. The Government signed up to the agreements with all of their policy, tax and spending implications without bothering to come to the Oireachtas to receive an endorsement, or even to present them, let alone give the Oireachtas the opportunity to change some of the elements. We are sliding down a slope which gives the Executive far too much authority because we have no proper systems for scrutiny in this or any other committee. It is time we started to demand better.

The health service drives me scatty. We are told that the Government increased spending by 120% and employment by 30,000, yet it produces the Hanly report saying it forgot that junior hospital doctors could no longer work 72 hours a week. They now work only 48 hours a week. In effect, in man years, we will lose 2,500 staff from the health service. Therefore, we must shrink services. The Government had a large amount of money to drive reform but did not use it. Instead it is shrinking services to stay within a parameter anticipated and flagged in the mid-1990s. There is growing frustration and people are right to think the Oireachtas is out of touch because we do not know what is happening in many spending programmes, yet we rubber stamp them.

I endorse the Chairman's call and hope next year he will agree not to convene this meeting unless he has a more meaningful quality of debate to offer in the way in which, and the time at which, information is presented.

Chairman

I was making the point that the substantive part of the Book of Estimates was published in November. I accept the Minister of State's point that the final outturn for the year is not available but 99% of the figures are included in the original Book of Estimates, or 98% as happened last year. We should have the debate in advance of expenditure being incurred, even if there is some tidying up when the year-end figures are available. That is a different issue but the substantive debate should take place in advance of expenditure being incurred as would happen in any organisation.

Mr. R. Bruton

The debate should take place on the basis of proper information. This is a farce, as the Chairman can see. One is prompted to ask the reason the President's travel budget has been reduced by 30%. What relevance does this have to anything? We should be asking what we are delivering in terms of service. Is productivity improving in key areas? Are we achieving outcomes that warrant shifting blocks of money to other areas where we are getting better results? There is no information in the Minister of State's document that could even hint at those choices.

Ms Burton

Friday will see the publication of the Exchequer returns for the first quarter. It is not possible to extrapolate from the figures for the first two months but on Friday we will have the figures for three months. In terms of the Estimates and the budget arithmetic we already know some important things. In certain areas the Government continues to try to claw back spending from the slush fund spending prior to the 2002 general election. Although we do not have all the details, tax revenues in certain areas continue to soar while ominously PAYE receipts have flattened, probably because of the continuing haemorrhage of jobs in manufacturing, the fact that the Government is no longer the recruiter it was in the run-up to the general election and is committed to shedding up to 5,000 jobs. There is an extraordinary sum coming from people who hitherto evaded tax.

Several decisions were taken in the context of the budget. We are now one sixth of the way through the year and by the end of the week will know the quarterly returns. We should have a budgetary management process such that where mistakes are made, or where something that seemed impossible or inappropriate in November or December now seems possible, the Government is big enough to admit that the forecasting was wrong and make corrective changes, where possible.

I want to highlight three significant areas where I believe the Government got it wrong and where it is appropriate and necessary to make a change. The first relates to the 16 social welfare cuts made in the December budget, most of which were highly technical. However, in recent weeks the chickens have come home to roost as Members from all parties find widows on their doorstep. These will be followed this week and next by lollipop ladies whose entitlement to social welfare benefit has also been cut back by the savage cuts made by the Minister for Social and Family Affairs, Deputy Coughlan.

At the Progressive Democrats' party conference at the weekend the Tánaiste publicly dissociated herself from the savage cutbacks made on widows' payments and intimated that the matter of providing the €5 million necessary to correct this savage assault on widows who are contributors to the social welfare system would be addressed. They are contributors and do not look for hand-outs. They receive a pension on the basis of their own or their husband's contributions and disability payments on the basis of their own contributions post-widowhood. The Tánaiste effectively told us that the Progressive Democrats — probably because the election was concentrating their minds — were dissociating themselves from the stroke pulled by the Minister for Finance, Deputy McCreevy, on the hapless Minister for Social and Family Affairs.

If the Tánaiste is correct in saying widows are to be restored to their original position, why is there not a clear statement to this effect in the overall public spending envelope? It was not part of the Minister of State's statement. It is not good enough for him to say the details of the Estimates deal with the President's Establishment, the Department of Finance and the OPW etc. because in his general presentation to the committee he is at pains to point out in his overview that there is now a monthly reporting system.

The Tánaiste has apologised in a backhanded way to widows. However, where do the Minister of State, a Progressive Democrats Minister of State in the Department of Finance, and his Fianna Fáil colleague indicate that they have found a mechanism to address the concerns of widows?

The Tánaiste referred to hardship cases and having worked in the area of social welfare. I know the secret language involved. I am sure Deputies Finneran and Fleming also understand what hardship means when related to social welfare. If what the Tánaiste said at the Progressive Democrats' party conference means that widows are to be fobbed off with a visit to their local community welfare officer to see if he or she will be enabled to make up on the grounds of a hardship review what the widow has lost by virtue of her contributory rights being assaulted by the Government, the Minister of State should take a hike because the members of this committee know that in a visit to a community welfare officer, on a hardship basis, one cannot gain a contributory entitlement. If that is what the Progressive Democrats have in mind, following their weekend think-in, as recompense for widows, they can stuff it. It is a disgrace if that is all the combined intelligence and hot air at the Progressive Democrats' party conference could come up with.

This week as the school Easter holiday period begins, lollipop ladies will lose their right to temporary social welfare payments when they will be let go by the councils which employ them. As a result of the social welfare cuts, they will be debarred from claiming social welfare payments on the basis that they are not available for full-time work. I have already had two women whose husbands are in receipt of disability payments contact me on the matter. When their wives are let go from their positions as lollipop ladies over the holiday period, they will not receive a full payment because they are deemed to be in employment and cannot be calculated as a dependant. The hardship that will be imposed on families where one parent works part time as a lollipop lady and the other is in receipt of a disability payment will be considerable.

Another issue not dealt with in the Estimates relates to capital investment. There is much talk about the development of rolling five-year multi-annual capital envelopes. What good are they if there is no commitment to a multi-annual revenue envelope to allow the facility to be commissioned? I will give three examples to the Minister of State.

Earlier this year Naas hospital, a project which cost many tens of millions of euro, could not be opened. Ballymun Health Centre is a large beautiful building which was constructed and commissioned but cannot be opened because the revenue envelope is not available. Blanchardstown hospital cost €104 million but only one small ward is open. It has a state-of-the-art accident and emergency department which is closed with a Third World accident and emergency unit comprised of prefabs, with tiny rooms for doctors and nurses, at the other side of the door which is locked. The doctors and nurses have to work in conditions I have not seen since my time in Africa.

As a result of the Minister's failure to ensure joined up economic thinking where he has a capital as well as a revenue envelope, we find such disasters throughout the country. Our infrastructure is of such an incredibly appalling standard that it will hold back future progress and make the country less competitive than those countries competing with us. Although the Government is making capital investments, we have nothing to show for it. On the capital investment front, over the weekend there were leaked stories, presumably by the Minister for Transport, Deputy Brennan, and those involved in constructing the Dublin Port tunnel, that spending was running €100 million behind the figure we had heard a couple of months previously.

I concur with Deputy Bruton that, to some extent, this debate is an exercise in futility. Instead of claiming praise for the way it is managing public expenditure, the Government should hang its head in shame.

Dr. Twomey

I want to comment on two matters. Periodically we raise the issue of this committee's role. We are one of a number of groups in the Houses, including the Committee of Public Accounts, which scrutinise the sum of €31 billion spent by the Government. This committee is better served than others in that some of its members have finance related qualifications which give them an understanding of how the system works. However, for someone such as myself who has no formal qualifications, it would make the committee more efficient if we had technical advisers available to us on a formal basis.

We spend much time criticising our own workings and interaction with the Government. Outside the Houses, certainly in the financial sector, there is much criticism of members of the finance committee and of how we do our work, some of which is justified. However, I am not in the business of knocking us as politicians as I see how we work within the Houses. I have said on numerous occasions that the Hanly report is the viewpoint of a very limited number of people from a very limited number of institutions who have managed to override all common sense and force their views not only on the Government but also on the medical profession.

I get a feeling of déjà vu when I see what is happening regarding benchmarking and decentralisation and even reform of the Oireachtas. Here again, we have a viewpoint put forward by a small group and the only purpose of discussion and the consultative process seems to be to give legitimacy to their viewpoint. There is a sense of this happening in regard to the Estimates and much of what this committee does. It seems we are a group of toothless tigers who are here merely to rubber-stamp Government policy. Some excellent work is done but to make ourselves more credible we should have more technical assistance with what is being put before us. Some of this is straightforward but some is very complicated.

It is important to comment to some degree on the figures before us and seek more explanation from the Department of Finance. For instance, the Revenue Commissioners have an 8% increase in their budget. That must be very surprising to some of those who sent in information on bank accounts outside this jurisdiction. If Revenue has an increase of only 8%, it will hardly get around to going through an extra 15,000 accounts. It will certainly not have an opportunity to follow up on people who remain outside the system and have decided not to declare.

This brings us back to what the purpose of these figures is and how much credibility they have. This week alone €60 million was found for the School of Music in Cork and €400 million for a massive investment in the Mater Hospital. These are figures we have not come across in this committee in the past 12 months, which have never even been hinted at. The Government has complete responsibility for the finances of the State and may come up with these figures. We have a health strategy which was supposed to receive an extra €1 billion a year. These figures go nowhere; they go around in circles. Some of the figures here could complement the farcical behaviour engaged in here.

On a lighter note, the figures that relate to office premises expenses in the Office of the Comptroller and Auditor General and the Office of the Revenue Commissioners have dropped by a significant percentage but they have increased in the Department of Finance. How are these figures calculated? Why do fuel and light cost less in the Revenue Commissioners and more in the Department of Finance? Another quite large figure, the superannuation Vote, has increased from €27 million to €43 million.

We should get very detailed responses when there is a large variation in the figures, whether up or down. If there are changes in the figures from year to year, increases of, say, 60% or 70% or a reduction of 30%, notes should be provided explaining the reason there has been such a massive change in spending relative to the previous year. This would make more sense than what we are doing — voting on figures when we do not have a clue where the money has come from or where it has gone. In some cases it does not matter because it is a difference of perhaps €10,000 or €12,000. However, in others it runs to millions, from €500,000 to €2.5 million.

The Minister of State did try to explain in his statement where some of this extra spending was going. However, I do not believe even he can talk us through all these increases. The information should be given to us well beforehand. Technical advisers to the committee would also have a role in explaining exactly where the money is. With such clarification we could at least act like a finance committee. I sometimes feel like coming in here and rattling on for five or ten minutes about the health service or something else because, regardless of whether we spend time in our offices reading through what we get in the post for the finance committee and trying to make sense of it, it does not seem to make any difference to the debate when we come here.

If we really want to debate this matter, we should first discuss our own role in a very serious way. We sometimes hear discussions about reform of the Oireachtas which seem well-meaning and sincere but they never come to anything. We should consider our role and what we are supposed to do here. Then we should ask for a better explanation of what we are being asked to discuss. Otherwise we are, as I said, a bunch of toothless tigers discussing nothing of relevance to our role or what we are supposed to do. It is from that point of view that I make my contribution to this debate.

Chairman

Regarding the Vote for the Office of the Minister for Finance, we indicated in the timetable that it was the largest. There are particular questions on Vote 6 — Office of the Minister for Finance. We will deal with that Vote 6, then the Vote for the Office of the Revenue Commissioners and finally the remaining Votes.

Mr. R. Bruton

Why is it that the Office of the Minister for Finance is the one area where we are seeing a staffing increase, from 559 to 574? This contrasts with what is happening in most of the other agencies under the jurisdiction of the Minister where staff numbers are frozen or in some cases reduced. In the Civil Service Commission there is a significant reduction. The numbers in the Revenue Commissioners are pretty much frozen, as they are in the Office of the Ombudsman. I wonder what is going on.

The Minister of State offered an explanation for the 312% increase in the cost of consultancy services. Have Ministers thought of setting up an alternative to high reliance on external consultancy services? I see that the British review of public expenditure has come up with the idea of having an internal management resource common to all Departments. Rather than high reliance on external consultancy services, a group of professionals would move between Departments as different requirements arose in order that there would be more internal learning and expertise built up within the service. Would the Minister of State favour such an approach?

I note that the charity contribution has been frozen in value. Does this reflect that the national lottery has run into financial restrictions and is no longer seeing growth in its revenue base that the Minister has decided to freeze the contribution made to charities which have been damaged by its presence?

Ms Burton

I note that the percentage increase for the Office of the Minister for Finance is 41%. The figure for the secret service is 96% but I do not know what that is for. The increase of 41% for the Office of the Minister for Finance seems out of line, although I am aware some of it relates to the Presidency. I would like an overall comment on what is happening.

I see a number of headings throughout the Estimate for consultancy services. Subhead A7 has been increased by 79%, from €700,000 to €1.2 million for certain consultancy services, an increase of €500,000. I exclude the increases associated with the Presidency because it is a one-off event but there is another significant increase under subhead B of €2 million. Why is it so high, particularly when so many work in the Department of Finance? Can some of the assistant secretaries and principal officers not do this work? Are we wise to rely so much on consultancy services? Are some of the senior officials in the Department, above administrative officer level, chasing paper? Has anyone looked to see whether the working methods of the Department could be made more efficient in order that departmental staff could do some of this work?

The cost of Structural Funds technical assistance has risen by almost €1 million, mainly due to consultancy fees. On a quick perusal of the information the Minister who always talks about not using consultants seems to have increased the amount his Department pays to consultants by between €3.5 million and €5 million.

There is a plethora of committees listed. For example, under subhead H1, the review body on higher remuneration in the public service costs €20,000 a year. Why must it carry such a standing cost? The public service benchmarking body costs €1 million, which will please Deputy Bruton who is so enthusiastic about benchmarking. That is a great deal of money. How much are the members of this august body——

Mr. R. Bruton

The figure is €1,000 but it is closed down. They must have been invited to dinner to celebrate.

Ms Burton

I apologise. There is a general cost of €120,000 for committees and commissions, connected to the termination committees which deal with the Stock Exchange and investment intermediary advisers. There are many such committees, including a new one, the credit union advisory committee which comprises seven people who get travelling expenses. It would be interesting to know how appointments are made because extra consultancy fees contribute to the cumulative high cost of the public service. In the Department of Finance consultancy fees are very significant. What value, if any, are we receiving from these consultancies? This is very questionable.

The Department is a large employer, yet in key areas it must look outside. Many of its employees want to move to the NTMA where they may be better paid but there seems to be a great deal of unnecessary expenditure. Were the Department to cut down on consultancies, it could avoid attacking widows with social welfare cutbacks. Would the Minister of State be amenable to this?

SELECT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate - Tuesday, 30 Mar 2004

Estimates for Public Services, 2004.

SELECT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate -
Tuesday, 30 Mar 2004