Dáil Éireann Debate, Thursday - 6 May 2004
37 Mr. Murphy asked the Minister for Finance if he has proposals to make the Departments and Ministers promoting capital projects shoulder greater responsibility for their delivery on time and within budget. [12881/04]
View answer58 Mr. Durkan asked the Minister for Finance if he has proposals to eliminate cost overruns on State contracts or procurements; and if he will make a statement on the matter. [12938/04]
View answer72 Mr. Gogarty asked the Minister for Finance the changes likely within his Department following the report of the Committee of Public Accounts on funding for a National Equestrian Centre at Punchestown, County Kildare. [12958/04]
View answer108 Mr. Durkan asked the Minister for Finance the extent to which his Department approves or authorises project expenditure in other Departments or his own; if a particular sector or section within his Department has particular responsibilities in this area; and if he will make a statement on the matter. [13104/04]
View answer109 Mr. Durkan asked the Minister for Finance the procedures applicable in respect of Government approval of State funded projects; the personnel whose approval is sought within the respective Department for such projects; and other checks or balances involved; and if he will make a statement on the matter. [13105/04]
View answer111 Mr. Durkan asked the Minister for Finance the procedures that are currently in place to prevent cost overruns on State funded projects, contracts or procurements and the sanctions applicable for non-compliance; and if he will make a statement on the matter. [13107/04]
View answerI propose to take Questions Nos. 37, 58, 72, 108, 109 and 111 together.
Primary responsibility for the evaluation, planning and execution of capital projects rests with line Departments and the relevant implementing agencies. Accounting officers in the relevent Departments are accountable to the Public Accounts Committee for expenditure under their Votes on such capital projects.
The Department of Finance's role is to agree with Departments, subject to the direction of the Government, the policy framework for capital programmes and projects, to make global provision for the resources required and to put in place best practice guidelines for the appraisal and management of capital projects. Line Departments and their agencies are primarily responsible for managing their programmes and projects within budget and in compliance with the policy framework and with guidelines laid down by my Department. In general therefore, most Departments have delegated sanction to execute projects. My Department has a role in relation to the sanctioning of resources for individual projects not covered by the delegated sanction given to line Departments or not within approved programme budgets. Line Departments in turn, generally act as the sanctioning authority for projects promoted by public bodies under their aegis.
In my 2004 Budget, I announced a number of initiatives aimed at achieving better value for money from infrastructural investment, in particular, the introduction of rolling five year multi annual capital envelopes and significant proposed changes in the area of public sector contracts for construction and construction related services. These initiatives seek to address the issues of improved project management and to reduce the potential for project costs overruns etc.
The Department of Finance is currently in the process of entering into framework agreements with each Department to underpin the capital envelopes. The framework agreements will, among other things, put a system in place to require Departments to report to management regularly on their capital projects, to carry out spot checks of projects to ensure compliance with the Department of Finance capital appraisal guidelines, and to report the findings of such spot checks annually to the Department of Finance.
The Department of Finance's 1994 capital appraisal guidelines are being reviewed and updated to complement the new capital framework agreements and to reflect recent developments. Both the framework agreements and the revised capital appraisal guidelines will take account of the report of the PAC referred to in Parliamentary Question No. 72.
Cost overruns can occur for a number of reasons. In the procurement of public sector construction contracts, national guidelines on best practice are set out in the Department of Finance's guidelines, Public Procurement — 1994 edition — green Book. As indicated above, I announced in broad outline in budget 2004, significant proposed changes in the area of public sector construction contracts to help reduce the scale and scope of cost over runs on public sector construction contracts. These will be advanced following the recent agreement on the principles involved at Government.
