Estimates for Public Services 2005.

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

On 29 November the Dáil ordered that a Supplementary Estimate for the following Vote be referred to the select committee for consideration: Vote 6 — Office of the Minister for Finance. I thank the Minister of State at the Department of Finance, Deputy Parlon, and his officials for attending and assisting us in our consideration of the Supplementary Estimate. I also thank the Minister of State for providing us with written briefing material which has been circulated to members. I call on the Minister of State to make his opening statement.

I thank the committee for allowing me to present for its consideration the Supplementary Estimate which arises from the Finance group of Votes, specifically Vote 6 — Office of the Minister for Finance, for which a token sum of €1,000 is being sought. This is to enable a sum of €1 million to be transferred to subhead N.2 — Northern Ireland INTERREG, in savings under other subheads to fund technical assistance programmes relating to the 2000 to 2006 EU INTERREG IIIA programme with Northern Ireland, 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 measures funded by the INTERREG IIIA programme. The additional €1 million is required to avoid a de-commitment of EU funds from the programme. As members may be aware, EU Structural Funds are subject to the N+2 rule. This 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 required to meet payment commitments entered into and must be paid before the end of the year to qualify for N+2 rule purposes.

I thank committee members for their attention. I will do my best to deal with any questions they may wish to ask.

I welcome the Minister of State at the Department of Finance, Deputy Parlon, and his officials.

As a Border Deputy representing the counties of Cavan and Monaghan, I record my appreciation of the important work done under the INTERREG I, II, III and IIIA programmes on a joint basis with the six north-eastern counties of the country. However, much remains to be done. Attempting to address the economic neglect of the Border counties over decades will require a significant commitment on the part of the two Governments. INTERREG IIIA projects must be viewed, like their predecessors, as additional measures, that is, not as mainstream commitments of the respective Governments. They must be viewed as additional to the Government's primary responsibilities as far as its obligations to the Southern Border counties are concerned. There is still a long way to go to address the deficit that has affected the economic life and prospects of people living in the Border counties for many decades, not only during the difficult times allied to the Troubles of the last 30 years.

While I have no difficulty in supporting the proposition the Minister of State has put before the committee today, will he be more specific? In his address he indicated that the provision was for technical assistance and covered the cost of implementation of the programme in the Border region in terms of publicity, evaluation and general support for the programme. Are these already approved projects or has there been a further tranche of approvals in respect of new or further projects at the end of the year? Is the Minister of State in a position to say anything in respect of the current programme as it enters its last year in 2006? It is important to record that members wish to see such EU support continuing beyond 2006. Together with all other strands of opinion, with my colleagues, I commit to do everything possible to help and support the achievement of that goal.

Will the Minister of State be more forthcoming in respect of the detail as to what the sum of €1 million will be directed towards? I recognise it is part of a formula to ensure moneys will not be recommitted by the European Union. I will finish by again welcoming the proposition and stating I will support it.

I am deputising for Deputy Cregan.

On the N+2 rule, most committee members favour the expenditure of moneys as quickly as possible. Schemes should be put in place in order that they can have an impact on local communities as quickly as possible. I have some experience in other Departments of situations where one was informed late in the year that funds were available and had to be spent. I never enjoyed hearing this because sometimes one requires additional time to do business properly and ensure good financial management. Hence, what flexibility does the Minister of State envisage in respect of the N+2 rule and the negotiations with the Commission on the future prospects for the scheme, notwithstanding the need to encourage groups to ensure steps are taken as quickly as possible? The Good Friday Agreement introduced new administrative procedures and developments and there is now a new situation in the Border counties and the adjoining Northern counties. Hence, I am anxious to establish whether there will be a greater degree of flexibility, particularly on schemes where, notwithstanding one's best efforts, one runs out of time.

I also welcome the Minister of State.

I have a brief question about this funding which has been available for two years. Why have we waited until the last fortnight of that two year period before drawing down this funding and why is there such urgency? Can we not plan our affairs better? While we had a two year timeframe in which to do business, we find ourselves entering the last two weeks of that two year period and having to put in place this emergency measure.

I thank the Deputies for their questions. First, I appreciate the point Deputy Ó Caoláin made about decades of neglect. Money was spent along the Border on duties of no benefit to people living either side of it. The funds associated with the INTERREG initiative are intended to be additional. I was personally involved in the negotiations at the recent EU budget meeting at which we fought hard for the PEACE II programme moneys. While it was not easy, we received positive support from the British and the moneys were approved. We will seek agreement on a PEACE III programme later. However, EU enlargement and our move towards becoming a net contributor will make our case more difficult. Nevertheless, we will negotiate a PEACE III programme, for which we will receive some moneys. I appreciate that such funds are additional.

On the specific question asked by the Deputy, all of the projects have been approved. Technical assistance accounts for a maximum of 2% of all of the moneys available. Hence, whether it be for publicity or technical assistance, it is a small element of the total budget. I appreciate that the Deputy welcomes the measure.

As for Deputy Smith's question, the N+2 rule is not flexible. We had enough difficulty negotiating our PEACE II programme moneys without stating we required a relaxation of the N+2 rule. While the deadline is absolute, I appreciate it may lead to some poor business decisions towards the end of a given period.

There was much discussion concerning the issue of simplification of administration. However, in terms of the complexity of compliance and drawing down funds, as well as the work required of my officials in order to comply, further spending is unquestionably quite onerous.

On Deputy Nolan's question of why this has taken place in the last few weeks, the Department monitored the programme closely and became aware that there was a cash flow difficulty. It tried to address the problem in co-operation with the special EU programmes body, SEUPB, but the scale of the shortfall only became apparent in the past month due to the size and timing of reimbursement claims from the Commission. Hence, we do not seek extra money. We seek a technical Supplementary Estimate to make the Dáil aware that we are providing for the INTERREG IIIA programme temporarily, out of savings made under two other subheads. I understand the details are contained in the information provided for members. We are bringing the matter to the notice of the Dáil, as we did last year in respect of a substantially greater sum. Last year funds were provided early in the new year. It is expected the same will happen this year.

I thank the Minister of State.