SELECT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE debate -
Wednesday, 8 Dec 2004

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

Vice-Chairman (Mr. Finneran)

I have received apologies from the Chairman of the committee, Deputy Fleming. I welcome the Minister of State, Deputy Parlon. I thank him and his officials for attending this meeting and assisting in consideration of these Supplementary Estimates. The briefing material has been circulated to members of the committee.

I propose that the committee consider the Supplementary Estimates for Votes 6 and 9 together and Vote 10 separately. In each case the Minister of State may make an opening statement for up to ten minutes and each party spokesperson will have five minutes for an initial contribution. The five-minute slots will be followed by ten minutes for further contributions. Is that agreed? Agreed.

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

I thank the committee for allowing me to present for its consideration two Supplementary Estimates, Vote 6, Office of the Minister for Finance, and Vote 9, Office of the Revenue Commissioners. Vote 6 seeks a gross Supplementary Estimate of €8.8 million to fund technical assistance and programme costs relating to the 2000-06 INTERREG IIIA programme with Northern Ireland. This will be offset by savings from subhead J1, Structural Funds technical assistance and other costs of €1 million; subhead J2, technical assistance costs of regional assemblies grant-in-aid, which is €500,000; subhead Q, Civil Service child care initiative, which is €1 million; and subhead S, decentralisation fund of €6,299,000, giving a net Supplementary Estimate of €1,000.

This programme is a joint community initiative programme with Northern Ireland. The provision for technical assistance covers the cost of implementation of the programme in the Border region, publicity, evaluation and general support for the programme. Programme costs relate to the measures funded by the INTERREG IIIA programme.

The additional €8.8 million is required to avoid a decommitment of EU funds from the programme. The EU Structural Funds are subject to the N+2 rule, which means that funding is lost to the programme if it is not spent two years after the original commitment is made. The additional funds are not required to meet a level of expenditure that is higher than budgeted but to meet a temporary cashflow shortfall which has arisen due to timing factors.

The second Supplementary Estimate for which approval is sought is the Office of the Revenue Commissioners, Vote 9, which seeks a gross Supplementary Estimate of €3 million to fund additional salary costs resulting from an arbitration report and the granting of incremental credit to staff for previous service in the public service. This will be partially offset by applying surplus appropriations-in-aid of €1.15 million, giving a net Supplementary Estimate of €1.85 million. The main reasons for the excess expenditure are as follows. The findings of an arbitration report provide that compensation for the loss of earnings be paid to those executive officers and higher executive officers whose earnings were reduced consequent on the implementation of the report of the review group on mobile task units, in October 1997. The estimated cost of this award, including the consequential knock-on effects of payments to staff officers and clerical officers, is €1.761 million.

General council report No. 1443 provides for the granting of incremental credit for previous service to officers at clerical officer and executive officer grade, and equivalent grades, represented by the Civil and Public Service Union and the Public Service Executive Union. The total amount payable within Revenue is estimated at €2.25 million. In total, an estimated €4,011,000 is required to cover payments due under these two items. However, given the complexities in certain cases and the time available, it is estimated that only €3 million will be paid in 2004. The balance payable and the ongoing costs have been dealt with in the context of the 2005 Estimates.

That completes my brief summary of the two Supplementary Estimates before the committee. I thank the committee members for their attention and I will do my best to answer questions that may arise.

Mr. Bruton

As regards the OPW, there has been a saving under the flood relief subhead which, to be parochial for a moment, is one of considerable interest to my constituency

Mr. Parlon

I will deal with the OPW Estimate at a later stage.

Mr. Bruton

I beg the Minister of State's pardon. He is just dealing with the Revenue Estimate?

Mr. Parlon

Votes 6 and 9 at present.

Mr. Bruton

Just before the new Minister for Finance, Deputy Cowen, took over, there was a decision by the previous Minister, Mr. McCreevy, to sanction a pay settlement in respect of the chief executive of Aer Rianta. I presume that money will be from the Aer Rianta line. I would be grateful if the Minister of State would clarify what the Minister's role was in sanctioning such a payment. I have seen no reference to it here. It is commonly known that the payment was opposed by the Secretary General of the Department of Transport. There was a belief in that Department that the terms of the severance payment did not make sense within the Government's stated policy. It seems that now, at the first opportunity on which we have a representative of the Department of Finance, we should obtain information on the method by which this was approved, why it was approved, what costings were used and what consultation occurred with the line Department responsible. There was a feeling that the Department of Transport was trying to pursue one line while the mat was pulled from under it by the Department of Finance's decision.

I also wish to raise the expenditure review initiative. Recently, I received an interesting report from the expenditure review group to the Minister for Finance. The group reported in October. It is disturbing that towards the end of a three-year programme of expenditure review, of 143 programme reviews the Minister was to have conducted in various Departments, only 20 have been completed so far. That is a completion rate of 14% after two complete years of the programme. It is also alarming to see that 45 reviews have been entirely abandoned. If we are trying in this process of examining Estimates to have sensible value-for-money debates on Supplementary and mainline Estimates, how does the Minister of State square the work of this committee in respect of these sums with the failure of his Department and the other line Departments to live up to the plan under the expenditure review initiative? This was supposed to review completely the spending programmes of all Departments within a three-year period, yet after two years less than 14% of those committed have been done. That was not a comprehensive coverage of the work envisaged.

I raise this matter because it reflects a disturbing theme concerning public expenditure. There does not seem to be a willingness by the Department of Finance to put in place systems to allocate money on the basis of expected performance and outcomes, rather than just dishing out money without due regard. This is a damning report on the performance of the Department of Finance's expenditure review, which is a core element in obtaining value for money.

Those are the main issues I wanted to raise under these two Votes. I will have other comments to make when we come to deal with the Office of Public Works.

Caoimhghín Ó Caoláin

Does the Minister of State wish to take all the questions together?

Vice-Chairman

Perhaps we will take two now, if that is agreeable to the meeting.

Mr. Bruton

I think we will have opening statements followed by questions. Is that not the format?

Vice-Chairman

There are opening statements and then there are questions.

Caoimhghín Ó Caoláin

Fair enough. I welcome the Minister of State and his colleagues. I wish to address Vote 6, which relates to the Office of the Minister for Finance, particularly INTERREG III, IIIA, IIIB and IIIC. I support the passage of this Supplementary Estimate which is welcome. However, I wish to raise some points regarding my experience. In recent months, people in the Border counties have brought particular difficulties to my attention. The primary fund for addressing cross-Border co-operation issues is the INTERREG III programme. Both Governments have given a clear commitment to use INTERREG III to promote what was described in the text at the time as "a framework for an integrated approach to common problems, which will create opportunities for genuine and practical benefits".

There are a number of interesting notations concerning the INTERREG programme, which is an independent fund, regarding the reality with which it has to contend, that is, Border issues. There are several that I have drawn down but, for the record, I will only quote from the INTERREG III programme 2000-06, operational programme analysis, pages 53 and 54, which states:

The economic weakness of the Border area is characteristic of rural areas outside the dynamic growth centres on the island. Moreover, the existence of the Border is an obstacle to the remediation of economic problems.

The INTERREG III programme should be a vehicle for redressing those difficulties, yet there are real matters of concern. As a representative of a Border constituency, I am concerned about a number of points which I would like the Minister of State to address. Of the 115 projects approved under INTERREG IIIA, only 34 have been approved in the six southern Border counties. That demonstrates a major imbalance concerning the numbers of projects approved in the six southern Border counties compared to the six Northern counties.

The approval process for INTERREG has been slow. Up to 15 October 2004, only 36% of the €66.2 million from INTERREG IIIA has been granted. I have concerns about the ticking clock in this respect. I would like the Minister of State to address these matters, as well as the fact that there is an undoubted bias. "Bias" is a word I would not ordinarily choose but I will use it only because it is convenient and comes to mind quickly in regard to larger commercial projects in the Border area as against the community and voluntary sector which has received significantly less assistance under INTERREG IIIA over the same period. I reflected before on the complicated application process which remains a matter of great concern and I would like to reflect on that again. The application process needs to be much more community-friendly and there must be far more input from local community groups and local elected representatives of all opinion because they have particular knowledge and expertise in regard to the needs of their representative areas of residence.

I emphasise again the importance of equal account being taken of the needs of Border communities on the southern side of the Border and the importance of helping to restore the natural social and cultural links which have been severed as a result of the imposition of the partition and, indeed, the years of conflict through which we all lived, which I have no hesitation in acknowledging. There is a tremendous need to address this. I wish to see greater proactivity in the promotion of INTERREG IIIA, easier access and emphasis on simplification of that access process. I have nothing to add in regard to Vote 9, I just wanted to address Vote 6.

Vice-Chairman

We are taking opening statements on Votes 6 and 9.

Caoimhghín Ó Caoláin

I realise that. I am sure the Chairman will ring the bell on me. I have probably used up all my time.

Vice-Chairman

I will not ring the bell on the Deputy unless he overdoes it altogether.

Ms Burton

On the Civil Service child care initiative under Vote 6, will the Minister of State outline why there was an underspend? In regard to INTERREG funds, my concern is about the long-term sustainability and structures of a number of the projects. I refer to the whole business of multi-annual funding and the fact that projects are often left in doubt. We have used this project-based approach for some time. Has the Department done any exercises in regard to the value for money of these projects? Some of them are very successful while others are not as successful. What overall evaluation does the Department carry out? I know there are procedures in regard to the partners involved and so on, and it would be interesting to get some information on that.

Going back to the child care initiative, the experience of many organisations, not necessarily the Civil Service but a number of others, has been that it has been very difficult to operate and that accessing funding has been very awkward. Does the Department have insights on how well these are going?

Mr. Parlon

Deputy Bruton inquired about the severance package for the chief executive of Aer Rianta. That is an issue for the Minister for Transport or for Aer Rianta, not for the Minister for Finance.

Mr. Bruton

It was widely reported in all the newspapers that the Minister for Finance approved this payment and that it was one with which, by all accounts, the Department of Transport was not happy. If the Minister of State is saying the Department of Finance had no hand, act or part, it is certainly news and seems to fly in the face of the general principles of public service employment terms where the Minister for Finance must approve the general terms before they can be applied.

Mr. Parlon

Whatever was reported in the newspapers may or may not reflect the real situation. The severance package came out of the budget of the Department of Transport, not out of that of the Department of Finance.

Mr. Bruton

This is a matter of policy controversy and of public interest as to whether the money should have been paid, whether the payment was in accordance with public policy and whether there was a dispute between the Department of Transport which appears to have been overridden by the Department of Finance in granting the payment requested by the board, apparently, in conflict with the Department. I do not think the Minister of State can wash his hands of it. He could say he has not been briefed on the matter and will come back to the committee. However, it is not acceptable for him to say it is not a matter for the Department of Finance. All the public records suggest the Department of Finance was at the heart of the decision and this committee should hear how the Department handled its responsibilities under law.

Mr. Parlon

As I understand it, this committee is dealing with the proposed Supplementary Estimates for the Department of Finance. Clearly, the issue Deputy Bruton raised is one for the Department of Transport.

Mr. Bruton

It is not.

Mr. Parlon

If or when it comes before the committee, it will be more relevant to it.

Mr. Bruton

That Department does not come before this committee. We are responsible for the Department of Finance.

Mr. Parlon

Obviously, it does not have a Supplementary Estimate. Whatever arrangements it made to deal with the retiring chief executive have been dealt with in the budget it had.

Mr. Bruton

That is not acceptable. The Minister of State is here representing the Minister for Finance who has made decisions in the recent past and this committee is entitled to understand the basis on which he made those decisions.

Vice-Chairman

This is a select committee. The Deputy's question may be more appropriate to a joint sitting of this committee.

Mr. Bruton

The question is appropriate to any Minister——

Vice-Chairman

We have specific business with which to deal. This is the select committee. I do not want to in any way put a stop to debate on matters.

Mr. Bruton

I would be happy if the Minister of State undertook to report to the committee on what exactly happened, on the decision made by the Department of Finance and on what basis it was made. However, the notion that a Minister can come in here and not address an issue central to his Department is not acceptable. He could say he has not been briefed.

Vice-Chairman

I think the opportunity could present itself but I understand that it is a matter for the joint committee, not for the select committee. We have specific business today and it is our duty to carry it out. The opportunity to deal with policy matters will arise and I am sure the Deputy will find an opportunity to raise them.

Mr. Bruton

This is a specific decision which has cost the taxpayer €800,000, directly or indirectly. It was made by the Department of Finance, yet the Minister of State has come in purporting to deal with his financial responsibilities to this committee but he is not willing to answer the question or to arrange for us to be briefed on it. That is unacceptable.

Vice-Chairman

It is not part of our business today but I am sure an opportunity will present itself to the Deputy at a joint committee at which policy matters are deal with.

Mr. Bruton

I request that the Minister of State prepare a note and submit it to the next committee meeting so that I can raise it and receive a response instead of raising it and waiting for a further period of time before I get a response.

Mr. Parlon

I will defer to the Acting Chairman's wisdom but it is irrelevant to this business. It is an issue for Aer Rianta and the Minister for Transport, and it should be taken up with him.

Vice-Chairman

The joint committee will meet next Wednesday. We should deal with the business in hand.

Mr. Bruton

I pulled back and asked for a response from the Minister for Finance, which would be available before our next meeting.

Vice-Chairman

We will leave it for the joint committee.

Mr. N. O’Keeffe

Is it mentioned in the Supplementary Estimate?

Mr. Bruton

No, but it should be.

Mr. Parlon

This is irrelevant in the context of the budget of the Department.

Vice-Chairman

It is a matter for the joint committee and the opportunity may present itself for the Deputy next Wednesday.

Mr. Bruton

I defer to the Acting Chairman's judgment but perhaps he will ask the Chairman to list it for consideration at the next meeting.

Vice-Chairman

I will bring it to the attention of the Chairman.

Mr. Parlon

I refer to Deputy Ó Caoláin's comments about INTERREG. INTERREG was set up to deal with the difficulties that arise for people living in the Border area. The Deputy articulated a number of those difficulties. There have been delays in processing applications and it is important to establish parity. However, every application went before the steering committee, of which 214 were approved, 27 deferred and 190 recommended for rejection. The total commitment across all measures was €145.333 million and 34% of applications required independent economic appraisals by external consultants to meet public expenditure requirements in the North.

The general turnaround is between six and 12 months but, as of 7 December, the verified expenditure this year was €45.2 million, of which €37 million was recorded in the past two weeks and that is the main reason for the cash flow difficulty and our appearance before the committee to sanction the necessary €8.8 million. The N+2 rule is strict and it concentrates the mind. Perhaps if it was not in place, applicants might not have made such an effort to sanction €37 million in grants to community groups over the past few weeks. However, it has been concentrated at the end of the year and there is no time for the SEUPB to deal with it but it has given an absolute commitment that as soon as its funding is provided by the EU, which is expected in the first quarter of 2005, the Department will be reimbursed in full.

Caoimhghín Ó Caoláin

While I appreciate this additional money was needed because the scheme was under budget, there was a temporary cash shortfall. However, the key and salient points I have made require address by the Minister of State. He quoted a number of statistics to which I am not privy in terms of sourcing. Will he provide a copy?

Mr. Parlon

Absolutely.

Caoimhghín Ó Caoláin

It is more up to date than the statistics I cited from 15 October.

Mr. Parlon

Thankfully, none of the funding was lost, given that 75% of it is provided by the EU. If we had not introduced the Supplementary Estimate, funds would have been lost.

Caoimhghín Ó Caoláin

That is why I indicated my support because I do not want that to happen. While the information offered by the Minister of State is interesting, what is the current ratio between the six southern counties and the northern counties? Has the imbalance improved as a result of the recent flurry of activity?

Mr. Parlon

All the projects involve cross-Border initiatives. It has been a challenge to a number of the agencies to come up with projects that meet the criteria. The funding is provided on a 60:40 basis between the Republic and the North but I do not have to hand information regarding the allocation of funds. I will make it available to the Deputy if the Department has it. However, 60% of the investment is made by the North and 40% by the South. The Northern authorities pay 100% towards the scheme whereas we pay 25% and the SEUPB operates within the 7% float to keep the fund running. If the information is on hand in the Department, it will be made available to the Deputy.

Caoimhghín Ó Caoláin

The numbers of projects up to 15 October highlighted the scheme is not achieving the number of projects we would like to see in the southern Border counties. Is that because people have been dissuaded as a result of the complicated application process? Is there another explanation?

Mr. Parlon

While the EU has debated the simplification of the scheme lately, it is still a difficulty. Ireland is giving lessons to the new member states regarding how to comply. Compliance continues to be a difficulty and the N+2 rule is a factor with the strict criteria. The EU is strong on its checks and balances to ensure it is not being ripped off. It is a complicated scheme and there is a complicated network of support in terms of the funding of the secretariat and the executives on both sides of the Border to assist in compliance. However, I acknowledge the complexity of the rules at all times and the difficulties in compliance. It is a major headache, which the EU is trying to address but it is not happening in practice.

Both jurisdictions have a great deal of experience regarding how to comply and we have been successful. A total of 214 applications were made and there is enthusiasm for the scheme. The steering committee, which evaluates the proposals, is a North-South group and a substantial number were deemed ineligible because they did not meet the criteria. I accept it is a complicated scheme and a great deal of expertise is needed to comply. The EU will say that to ensure proper control on expenditure, such complexity is necessary.

Caoimhghín Ó Caoláin

I thank the Minister of State for his response and for this offer of additional information.

Mr. Parlon

Deputy Burton referred to the child care initiative and the underspend of €1 million. However that is not the case. Certain projects have not progressed as quickly as anticipated. Two crèches opened in Mount Street and Backweston. The OPW acquires the sites and puts in place the facilities. There is always a lead-in time in terms of getting facilities because the availability of premises can be a difficulty. Clearly people want child care facilities close to their place of work.

The other issue which has taken the focus off decentralisation is that some Departments have stalled expenditure on child care and focused on where the new decentralised offices will be situated.

Ms Burton

I noticed that in the ERI report which was circulated to us a couple of weeks ago, the Office of Public Works had backed off doing further ERI work because of decentralisation. I find this significant in that the ERI process was supposed to be fundamental to all Departments and agencies in terms of ensuring that matters were properly run and so on. The Minister of State is giving a verbal explanation for the child care issue and throws in that underspending and the child care initiative relates primarily to problems associated with decentralisation. He raised the issue, not me.

Vice-Chairman

Perhaps we can have a proper debate on the issue at a more appropriate time.

Ms Burton

There is also an underspend of approximately €6 million in respect of the decentralisation fund as part of the underspend on the Estimate. It is a relevant question to ask the Minister of State with responsibility for the OPW. What management mechanisms are in place to ensure the Minister of State meets the budget targets, because the child care situation is critical. Given that the underspend on the decentralisation fund is €6.3 million, does it mean that everything in the OPW is suspended until decentralisation mark II is sorted out? I was particularly disappointed to read in the ERI review that the OPW had basically suspended or abandoned involvement in the process. This is of concern to members of the committee in the context of the Estimate.

Mr. N. O’Keeffe

In the second page of the Vote, the initial €3 million required for salaries, wages and allowances is to meet expected costs. This amount is offset by €1.15 million in appropriations-in-aid mainly from fines, forfeitures and law costs. Will the Minister of State explain that?

Mr. Parlon

On Deputy Burton's question, when the former Minister, Mr. McCreevy, announced the decentralisation programme in budget 2004, he provided €20 million to meet upfront investment costs. The Flynn group was appointed to draw up recommendations and I will report on the Supplementary Estimate in respect of site purchases and so on. It was not necessary to spend the money in 2004, but it will come up in 2005. A sum of €70 million was made available for 2005 and €900 million will be available up to 2009. The Minister has made substantial provision for the full decentralisation package. The €6.3 million will come out of the €20 million for which provision was made last year. The money has not been used, but there is provision for site purchases and infrastructural investment in 2005 when the money will be spent.

Ms Burton

Will the Minister comment on why the OPW is suspending or abandoning its involvement in the ERI process?

Mr. Parlon

The OPW has not suspended or abandoned its involvement in the process.

Ms Burton

The statement is in the report.

Mr. Parlon

Together with a number of other Departments——

Ms Burton

The statement is in the report.

Mr. Bruton

It states that the OPW——

Mr. Parlon

Perhaps Deputy Bruton will quote it because Deputy Burton has a habit of misquoting issues.

Ms Burton

No, I do not. I pay the Minister of State the courtesy of reading the material he issues.

Mr. Bruton

The report states that the expenditure review central steering committee accepts that the OPW is not in a position to engage in the ERI in 2004 due to the demands of decentralisation. The expenditure review initiative is the three-year programme of expenditure review. The OPW is listed in the report on a number of occasions. It states that the Government supplies agency and furniture branch carried out a review which was not submitted to the steering committee. It also states that plans for the continuing development of Dublin Zoo were not submitted to the steering committee. It appears the four items that come under the subhead we are discussing, the PEACE programme, the INTERREG programme, other than Northern Ireland, the North-South INTERREG and the Structural Funds technical assistance, have been abandoned. All the promised expenditure reviews have been abandoned and they are to be part of a mid-term evaluation of INTERREG III.

This is part of a much wider issue, that the Department of Finance has effectively thrown in the towel on expenditure review. As I said in my opening comments, the OPW has delivered on just 20 of the 143 reviews on which it was to deliver. It is in the slow lane in terms of priority within the Department. It is not surprising that there are overruns and bad spending decisions when the Department of Finance, which is the core Department in the area, treats expenditure review in this cavalier way.

Ms Burton

I offer the Minister of State an opportunity to withdraw the comment he made that I stated something which is not in the ERI report. I paid the staff in the OPW and the Minister of State the compliment of reading the report. In the report the Minister of State said he was abandoning the ERI process because of decentralisation. He should not accuse me of getting my facts wrong when I am telling him what is stated in the report, which was sent to each Deputy in the House approximately two weeks ago.

Mr. Parlon

Perhaps Deputy Bruton will remind me whether the word "abandon" appears in the report.

Mr. Bruton

The title reads "Postponed, replaced, withdrawn, evaluated or part evaluated in a different context". Some matters have been abandoned by not proceeding.

Mr. Parlon

That is the Deputy's interpretation.

Mr. Bruton

I quoted it accurately.

Mr. Parlon

The Deputy said that we said we abandoned the programme.

Ms Burton

Perhaps the Minister of State did not have an opportunity to read the material for which his Department is responsible. As an Opposition Deputy, I can only go by what I am sent by the Government, and words mean what they appear to mean when they are written in a supposedly authoritative document. If the Minister of State is suggesting that the report is wrong, I will write to the authors of the report and say that the Minister of State took issue in committee with the statements attributed in the report——

Mr. Parlon

I take issue with the Deputy's comments that the OPW has abandoned the ERI——

Mr. Bruton

In fairness, Deputy Burton is not misinterpreting the report. Apparently several reviews were promised within the OPW, to be conducted between 2002 and 2004. We are more than two thirds of the way through the programme and the OPW has no entry under its name of any report completed, under way or otherwise. The explanation offered is that the ERC accepted the OPW is not in a position to engage during 2004 due to the demands of decentralisation. There appears to be no reference to 2002 and 2003.

Vice-Chairman

Members have wandered into Vote 10, which is the next item on the agenda.

Mr. Bruton

This applies throughout the Department of Finance. It applies also in OPW, for which the Minister of State is responsible.

Vice-Chairman

We will deal with the OPW under Vote 10, which is the next item on the agenda.

Mr. Bruton

The central question is why is the Department of Finance abandoning the expenditure review process.

Vice-Chairman

I do not think the word "abandon" is included. In fairness to the Minister of State, he says it will not proceed in 2004, which is different.

Mr. Bruton

Postponing, withdrawing, not proceeding.

Mr. Parlon

Because of decentralisation and many other works which we have had to take on, the OPW is extremely busy. People are worked off their feet.

Mr. Bruton

They are too busy to speak to this committee.

Mr. Parlon

The OPW appears before this committee. We are very conscious and watchful of the amount of comment and number of questions put to the office on every decentralisation project. Although we have not got around to complying with the ERI, Deputy Bruton could look at many other Departments and find we are not alone in terms of compliance there. Extra personnel are needed who are carrying out other very important duties.

Mr. Bruton

Is that the Progressive Democrats view, the Department of Finance view, or both?

Mr. Parlon

I am giving the OPW view.

Mr. Bruton

It seems bizarre for the Minister of State to say his office is too busy to see whether the money it is spending is being well spent. That is a mad approach to the spending of public money.

Mr. Parlon

If the OPW does not execute some of its duties it would be under extreme scrutiny. We have much work to do.

Ms Burton

May I go back——

Vice-Chairman

We agreed the agenda at the start of the meeting. I put it to the meeting that we take Votes 6 and 9 together, but we have wandered into Vote 10. We are breaking our own rules.

Ms Burton

I asked the Minister of State questions relating to processes, procedures and ease of access to some of the funds which have been underspent and which are mentioned in the Estimate, and he has not been able to provide a reasonably indicative answer to my questions. Instead, he has become tetchy because I asked questions which, as a member of the finance committee, are reasonable for me to ask. It is not unreasonable for me to ask these questions and to expect him to attempt to answer them. If he does not have the information I am willing to accept that he will supply it later. Like other Deputies, I frequently receive representations from various groups which find it very difficult to access the funding, which is now underspent.

Mr. Parlon

Deputy Burton asked me why there was an underspend in child care provision and I explained, to the best of my ability, that we have provided two facilities, that there is always a difficulty in identifying sites and so on, that there is always a lead-in time and that the decentralisation issue is an added factor. The Estimate for 2004 was €2.5 million and we have spent €1.9 million. The balance is left over. Some of the projects are in hand and are ongoing. Substantial money will be spent on them next year. Because some Departments are to be decentralised it would be wise to put investment in child care on hold until they are in their new locations.

Mr. N. O’Keeffe

Can we have a meeting to discuss this report at a later stage? We are all over the place.

Vice-Chairman:

We will conclude our discussion of Votes 6 and 9. The matter raised by Deputy O'Keeffe is on the agenda for the joint committee's meeting next Wednesday. I ask the select committee to conclude its discussion of Votes 6 and 9.

Mr. Parlon

The Deputy asked a question about revenue and the surplus appropriations-in-aid, the first relevant question I was asked today.

Mr. N. O’Keeffe

I thank the Minister of State.

Mr. Parlon

Deputy O'Keeffe asked about fines, forfeitures and law costs. Fines were for the release of seized goods, compromise penalties for diesel excise licence offenders, P35 penalties and penalties for failure to submit declarations of trade details over specified amounts. Law costs are approximately €500,000, mainly recouped following successful court actions, barristers' fees and legal searches. There were no forfeitures. That is where that money was saved.

Vice-Chairman

We conclude discussion of Votes 6 and 9. The meeting will suspend for two minutes to allow officials to take their places with the Minister of State.

The select committee suspended at 3.55 p.m. and resumed at 3.57 p.m.

Vote 10 — Office of Public Works (Supplementary).

Vice-Chairman

As I must speak in the Dáil shortly, I ask that Deputy Ned O'Keeffe take the Chair for 15 minutes.

Mr. Bruton

I propose that Deputy Ned O'Keeffe take the Chair on the understanding that Deputy O'Keeffe will be as liberal as you are, Acting Chairman, in allowing the committee to pursue the issues in hand.

Caoimhghín Ó Caoláin

I second Deputy Bruton's proposal.

Mr. N. O'Keeffe took the Chair.

Mr. Parlon

Before dealing with the details of the proposed Supplementary Estimate I will make some brief and general comments on current developments in the Office of Public Works. The year 2004 saw the transfer back to the Office of Public Works of responsibility for the maintenance and management of national monuments and historic properties, including responsibility for education and visitor services. This involved 760 properties, 932 permanent staff and a spend of approximately €37 million. Management of the office and I took on this additional responsibility with enthusiasm as we could clearly see how the care, preservation and presentation of our historic properties and national monuments fitted seamlessly with the existing range of OPW responsibilities and expertise.

The major flood relief scheme in Kilkenny was brought to practical completion in 2004. This is a splendid scheme and resulted in the city escaping the flooding experienced in the south east at the end of October. In September, the Government approved the report of the flood policy review group, which sets out recommendations and proposals for future responsibilities for flood prevention and management. Funding has been put in place for 2005 and subsequent years to provide for the orderly implementation of the principal recommendations of the review group.

The most challenging task facing the OPW in 2004 and for the coming years is the delivery of the physical elements of the Government's decentralisation programme, that is, the sites and accommodation required at the various locations. The OPW moved quickly in December 2003 to invite expressions of interest from those who wished to provide suitable good quality modern offices, either existing or under construction, or suitable sites with planning permission or in appropriate planning zones which would facilitate the construction of new office buildings. Following the requests for property proposals, the OPW received in excess of 700 proposed property solutions in relation to the decentralisation programme scheduled for the various locations around the country. Detailed evaluation of these proposals has been undertaken and the Office of Public Works has made significant progress in sourcing possible sites for the locations concerned. The evaluation process involves the following three-strand approach: an architectural assessment by OPW architects; a valuation process undertaken by the OPW and private sector valuers; and an assessment by reference to the business needs and staff requirements of each decentralised Department or agency. A number of property solutions have now been agreed in principle and a further 20 plus are at an advanced stage in the acquisition process. I can also confirm that the balances of these sites for the remaining locations in the programme are being proactively pursued by the OPW. A procurement process for 15 of the preceding projects in the first phase commenced with an advertisement in the EU Journal and in national newspapers on 6 December 2004. The remaining projects will follow in quick succession.

I am pleased the Minister for Finance has agreed an allocation of €70 million for the OPW decentralisation programme in 2005. This will enable the site acquisition programme to proceed at full speed while proposals for direct provision and joint venture approaches for the buildings are pursued. All this is ongoing while the OPW is progressing decentralisation of its headquarters and 333 posts to Trim by 2007.

I will now comment in some detail on the main spending proposals included in the Supplementary Estimate. The gross increase over the original Estimate for Vote 10 is €13.493 million, partially offset by savings on the Vote of €7.34 million giving a requirement for a Supplementary Estimate of €6.148 million. The largest and most urgent item is an additional €5 million for subhead H5, flood relief-humanitarian aid. As members will be aware, the Government decided on 2 November to implement a scheme of humanitarian aid for victims of the severe flooding which took place on 26, 27 and 28 October to be administered by the Irish Red Cross Society. Approximately 300 claims have been received to date by the society. These claims are currently being individually assessed by experts in the Red Cross and it will not be possible to make an informed estimate of the level of Government aid required until they are completed.

The Government and Irish Red Cross Society are anxious to make as many payments as possible before Christmas. For this reason, it is proposed to seek a Supplementary Estimate now rather than later. The €5 million being sought is our best estimate and it may prove to be more than will be required. However, any moneys not disbursed by the Red Cross before end of year will be surrendered to the Exchequer. The Government wishes to emphasise that this humanitarian aid scheme is to relieve hardship. It is not compensation for losses. Cases of death, serious injury, homelessness, damage to home or extreme hardship will qualify for assistance. However, the scheme is intended to provide only for losses arising from damage to people's homes and not for business losses. I take this opportunity to once again express sympathy on my own behalf and of that of Government to everybody affected by the flooding. I also thank the staff of the Irish Red Cross Society for their professionalism and speed in dealing with a very difficult situation.

I am seeking an additional €3.988 million for subhead D, the purchase of sites and buildings. The Office of Public Works keeps under constant consideration options for property and site acquisition. From time to time, opportunities arise at a strategic level where a particular property meets a long-term objective of the State. Examples include decentralisation sites and specific or local requirements such as sites for a Garda station. The OPW is currently considering options to purchase a small number of specific sites and properties before end 2004. As negotiations are at a commercially sensitive stage I am not at liberty to disclose details of the proposed purchases. However, I consider it prudent to seek an additional €3.988 million to meet possible demand.

I am also seeking an additional €2.435 million under subhead E, new works, alterations and additions. Expenditure on this subhead includes €16.6 million on the EU Presidency compared with an allocation of €6 million. This increase arose mainly because the original allocation was insufficient to meet the hugely increased schedule of EU meetings and events including the EU-US Summit which had not been provided for. There will also be an additional expenditure of €1 million charged to subhead E this year in respect of Expo 2005 which is due to take place in Tokyo next year.

On subhead 1.1, historic properties, an additional €2 million is required to meet the unavoidable cost of benchmarking, pay increases and the need to carry out minimum levels of general maintenance work and health and safety related works.

The main offsetting saving in the Vote is on subhead H2, flood relief projects where a saving of €5.5 million arose due to delays encountered during the year with the Clonmel contract and on a number of new schemes with commencement at a slower than anticipated rate than proposed in the report of the flood policy review group. However, I reassure members that the Government and my office are fully committed to carrying out a comprehensive programme of flood relief schemes throughout the country as a matter of priority in 2005 and future years.

I thank members for their attention. I commend the Supplementary Estimate to the committee and will be do my best to reply to questions raised.

Mr. Bruton

My opening statement will be brief. I reiterate that I do not accept the explanation offered by the Minister of State that the OPW is too busy to undertake expenditure reviews. It is wholly wrong that the OPW, which is part of the Department of Finance, would decide that due to pressure of work it will not seriously consider issues of value for money. That is disturbing.

I congratulate the OPW on the quality of work undertaken by it in the Tolka catchment. However, it is worrying to note that the OPW appears to have difficulty keeping up with its schedule. I suspect that those living in Clonmel will rue the fact that delays were encountered in the programme of flood relief. I am aware people there suffered recent repeat flooding. I would like the Minister of State to comment on the apparent problems in getting the flood policy review group recommendations off the ground. Perhaps he could provide me, in writing, with a report regarding upcoming works on the Tolka catchment, which very much affects my constituency.

Another disturbing issue, which deserves further explanation, is why the EU budget ran over by almost 200%. An allocation of €6 million was made yet €16 million was spent. The explanation given is that the over-spend relates to extra meetings. They must have been extraordinarily expensive meetings given a further €10 million was needed. Either the activity was hopelessly under-estimated or something has gone wrong with cost control. An earlier report this year criticised cost control in connection with the EU Presidency. Perhaps the Minister of State will comment on lessons learned in that regard. The figures presented are worrying evidence that perhaps not all the lessons have been learned.

I am puzzled to know why benchmarking awards will cost an overrun given benchmarking was well known of and committed for in other Estimates. Why, in respect of historic properties, will it cause an overrun? On decentralisation, the Minister of State reiterated the Estimate of €915 million. I understand that approximately €400 million of that will be recouped from the sale of property leaving considerable new investment being required by the State. Will the Minister of State set out the existing tenure arrangements in terms of whether there is leasehold or ownership of the units it is proposed to move? It appears that all proposals are to purchase rather than lease for the future. The committee needs a proper balance sheet in terms of what leases will be surrendered in the city and what it is hoped they will realise. While some of that information may be commercially sensitive, perhaps we might get information regarding the footages involved, the locations and the policy intentions in terms of acquisitions. The Minister of State could perhaps provide us with more clarity on ownership-purchase and design-build-operate.

The general feeling is that it is only as the ivy root is being pulled that we are beginning to see the full costs. Perhaps the Minister of State will clarify on whose budget agency moves, which are down the line in terms of priorities, will fall? Will it be the OPW or is the envelope designed to be allocated to the agencies? What is happening in this area? The committee needs a more detailed breakdown in terms of the envelope to understand the decisions made in regard to the property end of decentralisation.

Ms Burton

I compliment the staff in the OPW for the excellent work done by them on a number of the properties and, in particular, the historic properties which are popular with the public and are utilised by Irish people and visitors. Will the Minister of State give us an analysis of the cost overruns with regard to the flooding in Kilkenny? The costs for the scheme rose significantly. The OPW was lucky in Clonmel because there had not been agreement among the people living there on the details of the scheme. Given the predictions of a disimprovement in global weather conditions, did the OPW have a management risk analysis carried out with regard to flooding? Unfortunately, it appears flooding will be a regular occurrence. The Kilkenny experience seems to have been that costs rose significantly during the life of the project.

I support what Deputy Bruton said about the overspend on the EU Presidency. There was a detailed critique in the report of the procurement side in the management of certain events associated with Dublin Castle. There was a promise to reform a number of the procedures in tendering for certain services at events held in Dublin Castle. The reporting accountants pointed out that the number of events had spiralled in such an incredibly unplanned way that it had been almost impossible for management and staff of the OPW to keep control. I understand there were approximately 50 additional events. My impression on reading the list was that many of them had been prize events in Ministers' constituencies in the run-up to the local and European elections. They were photo opportunities or shoots. I do not know if they did much for the Government parties in that respect but they certainly cost the taxpayer a significant extra amount. Some of the major events were well planned and successful. However, many secondary events were of no great benefit to anybody. To return to what I said about the expenditure review initiative, ERI, and the apparent abandonment of that process by the OPW on foot of decentralisation and its demands, has any review been carried out of EU Presidency events or the new events planned at a late stage? Were we, because of their late planning, paying top dollar for them to be organised at such short notice?

Like Deputy Bruton, I am interested in any additional information the Minister of State can give on the Tolka.

On the issue of decentralisation, specifically point No. 2 on the second page on the valuation process undertaken by both the OPW and private sector valuers, what is the mechanism used? I recall that Farmleigh in my constituency was advertised as being on the market for approximately €16 million but by the time an adviser to the Taoiseach had taken over the process the acquisition cost, if I recall correctly, had risen to approximately €25 million. As so many advisers and PR people working for various Departments are in the news these days, will the Minister of State elaborate on and explain the valuation process undertaken by the OPW and private sector valuers? It must be hard to do this but how will the Department stop valuers upping the value of sites likely to be selected for decentralisation? What processes are in place to ensure value for money? What is the role of private sector valuers?

Subhead D deals with the purchase of sites and buildings. In expanding areas, particularly around Dublin, the OPW handles the acquisition of sites for Garda stations and schools. The Minister of State is aware that this is a vexed and difficult issue for communities. In Dublin West many thousands of houses are built every year. Normally, a development plan includes a school site and the OPW is given the task of acquiring it on behalf of the Department of Education and Science. These acquisitions usually occur seven to ten years after the houses have been built and occupied. Has any review been carried out of the acquisition of such sites? This is an issue which affects both the Department of Education and Science and the OPW.

Acting Chairman (Mr. N. O’Keeffe)

I have been very liberal. Deputy Bruton will start worrying.

Ms Burton

That is it. I have finished.

Caoimhghín Ó Caoláin

The Deputy is liberal and the Taoiseach is a socialist.

Acting Chairman

I am a nationalist but not a socialist.

Caoimhghín Ó Caoláin

I will be brief. Subhead D deals with the purchase of sites and buildings, for which a sum of €3.988 million is sought. The Minister of State did not differentiate between ordinary and normal acquisition and acquisition relating to the proposed relocation of Departments and Government agencies under the decentralisation programme. It is imperative that we monitor the roll-out cost on an ongoing basis. Will the Minister of State indicate what expenditure has already been incurred on site acquisition and property development in the phase of decentralisation undertaken, as against normal site acquisition by the OPW for Garda stations etc.? Will he undertake to provide us with the ongoing roll-out costs of relocation in the coming months and years?

On the issue of funding for flood relief projects, I support what other speakers have said about the work done in Kilkenny and Tipperary. In particular, the work of the Red Cross merits a compliment. The experience in Dublin is that the city council took responsibility for securing contractors. What happened in other areas? Despite the denials, I do not doubt the clear evidence that insurance companies are not providing cover for properties in areas where there is a high risk of flooding. This committee should ask representatives of the insurance industry to come before it because this is a very serious matter. They are in denial but the reality is that the insurance companies are turning away business. There has been an excessive increase in premiums to make the project unaffordable. This is a matter which the committee should examine. It is placing people living in domestic residences and those involved in business in an impossible position.

Acting Chairman

The Deputy will get me into trouble on my first day. That is a matter for consideration by the joint committee at which I will support him if he raises it.

Caoimhghín Ó Caoláin

I look forward to receiving the Acting Chairman's support.

Acting Chairman

It is a relevant issue.

Caoimhghín Ó Caoláin

It is——

Acting Chairman

I would be obliged if the Deputy would keep to the document.

Caoimhghín Ó Caoláin

I am talking about flood relief. There is little relief for those who cannot obtain insurance cover. Rather than repeat what has been said, I will finish on this point. Will the Minister of State tell me it is the role and function of another Department? I have no doubt that a great number of people living in local authority housing do not have insurance cover for their personal effects. It is incumbent on local authorities, at the direction of central government, to flag to local authority tenants that they should consider taking out such insurance. The insurance cover available under local authority schemes only covers property, not contents. People have suffered both personally and financially as a result of flooding. The only way the matter can be addressed is through information dissemination. I encourage local authorities to undertake this project and look forward to hearing the Minister of State's comments.

Acting Chairman

I ask the Minister of State to give answers rather than make a speech, please.

Mr. Parlon

On the issue of the Irish Presidency and the allocation of €6 million which ended up at approximately €16 million, the allocation was based on the advice received at the time that there would only be seven EU ministerial meetings. In fact, 36 were held. Deputy Burton was scathing as to the need for these meetings. It may have passed her notice, however, that EU enlargement took place during the Irish Presidency and the accession celebrations were held here on May Day when we accommodated 25 Ministers and their delegations. The agreement on the EU constitution was also ratified, something the previous Presidency had failed to achieve. This involved significant work behind the scenes and the extra ministerial meetings were a significant cost factor. The EU-US Summit in Dromoland Castle was held at a sensitive and crucial time in world politics. It was an exceptionally busy EU Presidency period.

Mr. Bruton

The usual procedure was to sign off on each one and the acceptance of cost overruns.

Mr. Parlon

The OPW was obliged to follow EU tendering procedures.

Mr. Bruton

Who signed off and made a decision on the number of meetings to be held?

Mr. Parlon

The Government — individual Ministers — signed off in terms of hosting——

Mr. Bruton

Did it go to Cabinet?

Mr. Parlon

Every ministerial meeting was hosted by a Minister.

Mr. Bruton

Who approved the costings?

Mr. Parlon

It was signed off by the Government. It would be a shame if we allowed the globally acclaimed success of our Presidency to be diminished by suggestions that Ministers were organising ministerial meetings in their constituencies in the run-up to the local elections.

A question was asked about Farmleigh. This happened a long time ago. All Deputies will be aware that guide prices have been a bone of contention in the case of both private and public property. When the OPW disposes of property, the guide price is generally exceeded. There was keen competition among many interested parties for a property such as Farmleigh in respect of which the Deputy mentioned a guide price of €15 million or €16 million. The price which was eventually negotiated covered the extra 15 acres of land which seems to have passed most people's notice. Farmleigh is a fabulous State asset and its value has increased. It is regarded by experts as a very good investment by the State. It was of great benefit in hosting many EU meetings and is currently used as a busy, upmarket conference centre in which public events are held, especially during the Christmas season which prove to be very popular.

The flooding in Kilkenny was discussed at the Committee of Public Accounts. Archaeology was one of the reasons for the overrun. A flood relief scheme was being carried out in one of the most ancient cities in the country and archaeological works were a major cost. They caused delays for the contractor which added to the costs. A discovery of PCBs was made in the bed of the river as a result of a clean-up operation that had taken place place many years before. There was concern about their carcinogenic properties. Compensation payments to individuals affected by the works also added to the costs. I have noted that when one visits a flood site when everyone is in dire straits, everybody wants the works carried out immediately but when the machines move in on the site, they create noise and cause disruption and people have a different perception. The OPW was, therefore, required to make substantial compensation payments. However, when the weather was extreme last October and many places experienced flooding, there was no flooding in Kilkenny. Therefore, the scheme has been a success. The cost-benefit analysis shows that it works out at 2.5 times the actual cost which was substantial — in excess of €40 million.

A question was asked about the provision of buildings for decentralisation. Following a trawl it seems very few are available. We will, therefore, adopt the design and build approach. Four major projects will be undertaken on a design-build-finance basis — in other words, a full PPP — in Portlaoise, Drogheda, Mullingar and Carlow. Two projects in Longford and Sligo are being built in the traditional OPW way. The design work has been done and the OPW owns the site in Sligo. The remainder will be put out to tender on a design and build format. Last Monday the OPW published advertisements seeking expressions of interest from developers and contractors. The agencies involved will provide their own buildings for which the OPW will act as project manager.

Deputy Finneran took the Chair.

Ms Burton

I asked the Minister of State specifically about point 2 on page 2. That was my reference to Farmleigh. I am aware of its history but my question was related to the valuation process undertaken by both the OPW and private sector valuers.

Mr. Parlon

The Deputy also asked about sites, including a site for a school. Generally, a site would be identified by either OPW officials seeking such a site or by members of the school's board of management. OPW valuers value a site after which an independent valuation is sought. We then approach the vendor. Whenever the OPW shows an interest on behalf of the State, owners generally assume they will be able to get a substantial premium over and above the private valuation. Our valuations are very similar to what we receive from a private independent valuer. Negotiations then begin, depending on how urgently the Department of Education and Science needs a site. If the site can be acquired and the Department of Education and Science agrees it is the best one, we will proceed. The same arrangement will apply to decentralisation. In so far as we can identify local authority or State-owned sites, we will go for them. If we must deal with the private sector, invariably there will be a premium over the independent valuation.

Ms Burton

Is it possible to get information on sites for schools already reserved by the local authority? In our experience the time-lag between the building of houses and the acquisition of sites is extraordinarily long.

Mr. Parlon

That has obviously been a planning deficit. I believe the planners are much more careful now. They now insist that a developer make provision for a site for a school.

Ms Burton

I am aware of that but I am talking about the OPW acquiring reserved sites which have been fully provided for in the planning process. Is it possible to get some information on this matter?

Mr. Parlon

Obviously, we work hand in hand with the Department of Education and Science which advises us of its requirements for sites in a particular area conscious of the growth in population etc. In built up areas it is very expensive to acquire sites for schools, in particular, as they obviously need substantial space. I am aware of efforts we are making in a number of areas to acquire school sites and it is proving very expensive. We act as agent for the Department of Education and Science. If it advises us——

Mr. Bruton

I am aware of a site which the local authority is stumbling over itself to sell to the Department of Education and Science but it will not budge.

Mr. Parlon

Is the Deputy referring to a future need for a school?

Mr. Bruton

There is a need. The school is operating in a football club.

Mr. Parlon

If the Department of Education and Science advises us to acquire the site immediately, we will get it.

Mr. Bruton

It is not the Minister of State's problem.

Mr. Parlon

It would be ideal if we could strategically buy sites for schools in advance. Thankfully, the Minister announced over the weekend a substantial amount of money to be invested in new primary school buildings. Such is the demand that the OPW's priority now is to acquire sites to meet immediate needs rather than into the future.

Caoimhghín Ó Caoláin

Will the Minister of State address the questions I posed to him?

Mr. Parlon

I believe I have covered some of them, including those about the sites for decentralisation. The Deputy spoke about the Red Cross——

Caoimhghín Ó Caoláin

The Minister of State has not replied. Perhaps the Vice-Chairman will see to it that other supplementary questions wait until responses have been given to members' initial points. I was anxious to get away and have waited for some time. The Minister of State cannot even remember the points I have made which makes a total nonsense of the exercise.

Mr. Parlon

I have recorded them.

Caoimhghín Ó Caoláin

With respect, I am no more anxious to stay here all day than the Minister of State.

Mr. Parlon

I have no problem seeing out my time until 5 p.m. if necessary.

Caoimhghín Ó Caoláin

Perhaps the Minister of State will be good enough to respond.

Mr. Parlon

I mentioned the 20 plus sites——

Caoimhghín Ó Caoláin

I am asking about the differentiation between sites normally procured and those acquired under the decentralisation programme. If the Minister of State has the information to hand, he should indicate it; if not, he should provide us on an ongoing basis with the roll-out cost of relocation under the decentralisation programme.

While I take the Acting Chairman's caution that we should have a joint committee approach, I would be interested to hear the response of the Minister of State on the insurance industry's reaction to the flooding which occurred. I am interested in its refusal to provide cover and local authorities advising tenants.

Mr. Parlon

In response to the Deputy's question about sites, we are talking about two. We are talking about a Garda station site and another under negotiation with a vendor. I cannot give any guarantee that the negotiations will result in a deal. However, if they do, we will certainly need the estimated sum of €3.988 million. I went through the list of the other 21 plus sites referred to for Deputy Bruton. Provision is made in this year's budget for an allocation of €75 million to purchase them. I can go through them in detail. Nine have been bought in principle; the deal is done and the price agreed. We only need to finalise the legal aspects. In the case of the others, we are finalising deals. Certainly, the pressure is on. We hold a weekly meeting with our property advisers to expedite the purchase of these sites. Clearly, we want to get the best value for the State. In most cases two parties are vying for the sale of a site. Today's Estimate applies to three particular areas, two sites for decentralisation and one for a Garda station. There is a substantial site under negotiation.

Caoimhghín Ó Caoláin

What is the answer to my question about the insurance industry?

Mr. Parlon

As regards the insurance industry, that is a sentiment on which I agree entirely with the Deputy. At the time of our flood report review we called in the Irish Insurance Federation. It had some concerns about areas where the State had not made an investment, including the area adjacent to the Tolka about which I believe Deputy Bruton asked specifically and on which most of the successful work done involved direct labour by the OPW. Some of the other works have been contracted out by Dublin City Council, for example, the building of the wall at Ringsend and some piling. The work on the Tolka has been very cost effective and otherwise.

There is no excuse for the insurance industry's approach to areas along the Tolka where an investment has been made. I take exception to the attitude of insurance companies, all of which we have seen announce substantial profits. People take out insurance to insure against risk. Those living on hilltops which may never experience flooding may have flood cover. I support the Deputy's suggestion that this committee should consider the issue and put pressure on insurance companies to ensure that within reason everybody is accorded a quotation.

Mr. N. O’Keeffe

Did many businesses make claims to the Red Cross after the flooding? Considering the vast flooding which occurred in November, 300 claims through the Red Cross seems very few. Were many of these business as opposed to domestic claims?

A sum of €1 million is being charged to subhead E this year in respect of Expo 2005 which is due to take place in Tokyo. Expo is an out-of-date concept. Is the Department getting value for money? Does it have any figures for the event? Has it been evaluated? Was it held in Hanover on the last occasion?

Can the Minister of State provide an up-to-date report on the flood remediation works which will take place in Mallow and Fermoy? The flooding on the River Blackwater is a cause of grave concern to many.

What is the current state of plans to decentralise Departments and State agencies to County Cork? All of my questions are relevant.

Mr. Parlon

If the Deputy were in the Chair, he might not think so.

Mr. N. O’Keeffe

I was worried about being in the Chair because I thought I would lose out on being able to contribute.

Mr. Parlon

I will speak about the claims made by businesses. The Government has made it clear that it is concerned with humanitarian aid. I can supply a list of the criteria. They do not cover the losses of businesses. A solution to the problem was suggested by one of the Deputy's colleagues in a submission made to the Minister for Finance. I visited some businesses in Clonmel which had suffered substantial losses and other such cases referred to me. I cannot indicate whether the applications will be successful.

Mr. N. O’Keeffe

Is the Deputy in question a colleague of mine?

Mr. Parlon

The Deputy will be glad to know that the Deputy in question is a colleague of his from south Tipperary. It was mentioned that I had attended a meeting of Clonmel Town Council yesterday. At the meeting I spoke to representatives of the Red Cross which is examining over 300 applications. When my colleagues from the flood relief unit and I had discussions with members of South Tipperary County Council and all the engineers, we outlined the emergency work to be done. We are making funds available to Clonmel Town Council to fund some of the works immediately.

Mr. N. O’Keeffe

I am concerned about north Cork.

Mr. Parlon

Our comments were well received. The public exhibition of the scheme will involve a little extra work because of additional information we have gathered on flow rates and the difficulties which arose from the most recent flood in Clonmel.

Mr. N. O’Keeffe

That is not relevant to me. I am talking about the River Blackwater.

Mr. Parlon

The problems in Clonmel were raised. The Deputy also raised the issue of Expo.

Mr. N. O’Keeffe

I want to discuss the floods in north Cork.

Mr. Parlon

The Deputy should not have asked about Expo if he does not want me to speak about it. The Government and the Department of the Taoiseach decided to participate. As the agent in that case, the Department of Finance has been asked to assist in the compilation of the Irish exhibition in Tokyo. The Government has deemed that its investment in Expo will be worthwhile.

Mr. N. O’Keeffe

Where was it held last time?

Mr. Parlon

In Hanover.

Mr. N. O’Keeffe

As someone who was there, I can confirm that it does not provide value for money. I reported back to a committee on the matter. I was a Minister of State at the time, until they got rid of me.

Mr. Parlon

The Department of Finance is agent for the Government in this case. If we decide not to participate, we will be saying we are not interested in inward investment from the country hosting Expo, whether Germany or Japan. Political considerations need to be taken into account.

Mr. N. O’Keeffe

We should examine our participation on a value for money basis. It does not represent value for money. Many big countries have decided not to participate any more.

Mr. Parlon

I do not know how the cost-benefit analysis worked out. I am sure IDA Ireland and the Department of the Taoiseach made the decision for a reason. Perhaps the Deputy can take the matter up with those bodies. The Department of Finance has been asked to provide facilities in this case.

Mr. N. O’Keeffe

I am depending on the Minister of State.

Mr. Parlon

Okay.The Deputy spoke about the flooding which had occurred in Mallow. The preliminary design feasibility study was completed in October 2003, the draft environmental impact study was completed in March 2004 and a public information day was held on 29 March 2004. The plans for phase one of the project are being exhibited by the local authority and the works are due to commence in March 2005.

Mr. N. O’Keeffe

What about Fermoy?

Mr. Parlon

The preliminary design feasibility study was completed in October 2003 and a public information day was held on 27 April 2004. We are aiming for exhibition in the spring of 2005.

Mr. N. O’Keeffe

When will works commence?

Mr. Parlon

That will depend on the issues raised at exhibition stage. If substantial issues are not raised, we should be in a position to begin work towards the end of——

Mr. N. O’Keeffe

What is the estimated cost of both projects?

Mr. Parlon

As I do not want to talk off the top of my head, I will get back to the Deputy with the information on the works in Fermoy and Mallow. I guarantee him that the costs are substantial in both cases.

Mr. N. O’Keeffe

I invited the Minister of State to come to Fermoy to meet the people of the area. He might find that there is a different view on the ground.

Mr. Parlon

Perhaps I will try to visit the area in January when the Dáil is not sitting.

Mr. N. O’Keeffe

I also asked about the decentralisation of public jobs to the southern region.

Ms Burton

The national bus company, Bus Éireann, is to be decentralised to Mitchelstown.

Mr. Parlon

A deputation from Waterford Chamber of Commerce will visit me at 5.30 p.m. this evening. Representatives of the organisation will ask me what is delaying the decentralisation of jobs to that city.

Mr. N. O’Keeffe

It has been suggested that Fáilte Ireland will not be decentralised to Mallow. There is a doubt about the transfer of Bus Éireann to Mitchelstown for other reasons. Can the Minister of State update me in that regard in order that I can inform my constituents?

Mr. Parlon

The report recently produced by the Flynn group on the number of priority or first-time movers was predicated on sufficient numbers having applied to move and property solutions being available. The Flynn group and the Government are satisfied that sufficient numbers are available in the 20 cases which have been approved. I expect applications will continue to be received through the central applications facility in the other cases. The Flynn group will review the matter early in the new year. I suggest that the Deputy take up the issue with the relevant agencies, as I will. I am determined to carry out the full decentralisation plan, as announced by the former Minister, Mr. McCreevy.

Mr. N. O’Keeffe

Will the Minister of State investigate the matter and get back to me?

Mr. Parlon

I will.

Vice-Chairman (Mr. Finneran)

That completes our consideration of the Supplementary Estimates.