Skip to main content
Normal View

Wednesday, 9 Oct 2013

Other Questions

Open Government Partnership

Questions (6)

Mick Wallace

Question:

6. Deputy Mick Wallace asked the Minister for Public Expenditure and Reform if the proposed new open government initiative will extend to increasing transparency and accountability in budgetary matters; and if he will make a statement on the matter. [42473/13]

View answer

Oral answers (15 contributions)

Following Government approval, I submitted a letter expressing Ireland’s intent to participate in the Open Government Partnership on 15 May last. Therefore, Ireland has joined other newly implementing countries that are developing national action plans. The development of Ireland’s first national action plan is well under way. The participation of civil society in the Open Government Partnership process is fundamental to the development of the action plan. Proposals and recommendations for inclusion in the action plan were discussed at three public meetings of a network of civil society and other interests which were held over the summer months, as well as through online contributions. The report of a consultation with civil society representatives and citizens across Ireland on the Open Government Partnership process was submitted to me on 1 October. The report, which proposes a number of recommendations, is available on my Department’s website.

A number of the recommendations contained in the group's report focus on transparency and accountability. The proposals reflect a strong desire among citizens and civil society in general to be provided with the information they need to understand how decisions are made, how public funds are spent and how individuals and institutions are held to account. One of the recommendations involves improving the budgetary data, transparency and timelines. It reflects, inter alia, the view that there should be more public discussion and analysis of budgetary proposals.

The recommendations made in the course of the OGP consultation process are consistent with the Government's commitments to bring about a major transformation of Ireland's budgetary system. As the Deputy will be aware, a number of initiatives are under way which increase budget transparency and accountability. The key elements of the budgetary reform agenda were outlined in the public service reform plan published in November 2011. These reforms are the annual stability programme update published in April each year, a modern, multi-annual framework that has been put in place, departmental Estimates being presented in a different and more accessible format, a performance budgeting initiative being implemented, expenditure ceilings, which were on an administrative basis, now being on a statutory footing through the Ministers and Secretaries (Amendment) Act 2013, and the Government increasing its ongoing scrutiny and evaluation of public expenditure, with all value for money studies now being published.

Additional information not given on the floor of the House

All of the foregoing reforms allow greater opportunities for Oireachtas Members, as representatives of the public, to play a more substantive role throughout the entire budgetary process, from initial allocation of funds through to holding Ministers and public service managers to account for the achievement, or non-achievement, of stated performance targets. Moreover, the Government is moving towards a whole-of-year budgetary timetable that allows for greater and more meaningful engagement by Oireachtas committees in contributing to Estimates discussions in advance of the allocations being finalised. In this regard, my Department has supported the Houses of the Oireachtas Service in piloting this new approach to briefing select committees. This framework of budgetary reform will facilitate further consideration of the proposals on budgetary transparency contained in the report of the consultation undertaken by civil society.

As part of the next phase of the Open Government Partnership process, I intend to bring a memorandum to Government shortly outlining the civil society group's report and submissions received. I expect, subject to Government approval, to establish a group comprising both public officials and civil society representatives who will give further consideration to all recommendations made, including on budgetary matters, and to prioritise in terms of what is realistic and achievable over the next two years for inclusion in the first action plan. Action plans cover a two year period and we will report on progress annually.

I think we would all agree that aspirations have still to become a reality. The self-appointed Economic Management Council has been widely criticised for falling beyond the reach of democratic oversight. Given the gravity of the decisions made concerning public expenditure and income, the budgetary process must be open to greater scrutiny. Surely, open government must include increased transparency and accountability, as discussed concerning the budget, if it is to be a meaningful initiative and not just a window dressing exercise, as it still appears to be. Will the increased transparency promised in the open government initiative mean that the Economic Management Council will be disbanded in favour of a meaningful engagement of Cabinet, Members of the Dáil and civil society when it comes to the budget? Will the Minister support proposals by civil society to include equality proofing of budgets and the publication of such analysis in the open government initiative to give greater access to information to citizens and legislators?

The basic contention of the Deputy's question is wrong. Clearly, the Economic Management Council is not self-appointed. It is a Cabinet sub-committee, appointed by Cabinet. The Cabinet is the democratically elected Government of Ireland.

Will the Minister-----

I know the Deputy would like to rule by decree but it is a matter of democracy. I put the challenge back to the Deputy. It is always great to say: "You do something." I am asking the Deputy to do something. We put in place the capacity for committees to examine budgets. That is what happens in the rest of Europe. We published the review of expenditure so that all the policy options were available. I wrote to the chair of every line committee, in education, health, etc., to call in the Minister and go through all the expenditure options and have a real debate, and to call in civil society representatives if they wished. That is what Parliament should be doing. Will the Deputy give up the line of "someone else should do something" and take up the initiative himself?

The next time the Minister is preparing a budget, if he wants to have a chat with me about it, I will certainly take up the offer.

The Minister will take up the Deputy's offer.

I welcome the good work that was done in respect of the consultation with civic society during the summer months. In light of that, what does the Minister make of the open letter yesterday from eight civil society organisations - the National Women's Council of Ireland, FLAC, the Irish Council for Civil Liberties, the Children's Rights Alliance, Open, Gay and Lesbian Equality Network, Equality and Rights Alliance, and Amnesty - in respect of a decision taken by the Dáil Committee on Procedure and Privileges to shut down access to the audio-visual room for all party briefings? It flies in the face of any commitment to open Government and transparency, such as the Minister has articulated, to shut down what is essentially a space for civil society, interest groups and others to come to brief members. The decision by the committee was taken on foot of a briefing given by the ESB group of unions in respect of their pension fund and serious issues for Government and the public purse. I am very concerned about this and I would like to know what the Minister thinks.

Thankfully I had no responsibility for that, and the Deputy is trying to get me into trouble by asking me questions about the Committee on Procedure and Privileges, which has nothing to do with the Executive. It is the primary committee of the Oireachtas. I will leave the decisions of the Committee on Procedure and Privileges to that committee and I will not voice a view on it.

Deputy Wallace is pushing the boat out, but I will allow him.

I thank the Acting Chairman but I am entitled to another minute. Last week I pointed out that section 42(j) of the Freedom of Information Bill 2013 provides that the Bill does not apply to documents "given by a [freedom of information] body to a member of the Government or a Minister of State for use by him or her for the purposes of any proceedings in either House of the Oireachtas or any committee of either or both of such Houses or any subcommittee of such a committee". This section essentially states that the Government thinks lobbying, one of the most underhand activities in modern politics, should go unchecked, running counter to what the Government desires. The truth is that policymaking does not and should not take place in a vacuum. There is too much at stake and far too many people are affected by the Government's decisions. The Minister has brought in a new freedom of information Bill which, if truth were told, is about hiding how Government operates rather than revealing how it operates.

The Deputy is being silly. That is a silly remark. Every international body, not partisan people, that has looked at the freedom of information legislation thinks it is world class in terms of the presentation we have made. We can argue about the individual Parts of it but I ask the Deputy not to be silly about it.

In terms of-----

The Minister has the floor.

In terms of the lobbying legislation, the register of lobbyists Bill is separate legislation. We have had much public consultation about that Bill. I will bring it into the House early next year and we will have another debate about that.

Equality Proofing of Budgets

Questions (7, 11)

Seán Fleming

Question:

7. Deputy Sean Fleming asked the Minister for Public Expenditure and Reform his views on whether the budget adjustment should be levied in as progressive a manner as possible; and if he will make a statement on the matter. [42474/13]

View answer

Mick Wallace

Question:

11. Deputy Mick Wallace asked the Minister for Public Expenditure and Reform if he plans to equality proof cuts made by him in budget 2014; and if he will make a statement on the matter. [42472/13]

View answer

Oral answers (20 contributions)

I propose to take Questions Nos. 7 and 11 together.

With regard to next week’s budget, while the primary objective has been to reduce the deficit and return stability to the public finances, it has been vital to the Government to spread the burden of adjustments in as fair and as equitable a manner as possible while also seeking to minimise any negative impact on economic growth. Furthermore, it is the Government’s responsibility to ensure all available resources are spent carefully and that critical public services continue to be delivered.

In this context, the Government recognises that expenditure on social supports has an important impact on stabilising our domestic economy through supporting the overall demand for goods and services. Over recent years, we have maintained primary weekly rates of social welfare payments. This year we will spend €20.2 billion on social welfare. This means that all pensioners and all those under 66 years of age, such as people with disabilities or jobseekers, will have their weekly primary payments fully maintained, and that has been the case since this Government took office.

Similarly, in the area of education, the Government has protected DEIS resources. In budget 2013, for example, we ensured there was no overall change to DEIS related staffing levels or DEIS funding. As part of the DEIS programme, over the course of this year some €93 million is being provided to 850 schools supporting 167,000 pupils. This funding is provided, in addition to the normal funding allocation, to address educational disadvantage by prioritising the educational needs of children and young people from disadvantaged communities, from preschool right through second level education.

All Ministers are responsible for assessing policy proposals in their areas, and considerations of equality form an important component of budgetary discussions by Government. When making Government decisions on budget matters, the Government is very much aware of issues such as gender equality, persons experiencing or at risk of poverty or social exclusion, and people with disabilities. These proposals are under careful consideration by Government in advance of finalising the 2014 Estimates and, on budget day, the Government will publish illustrative cases showing the effect of major changes in revenue and certain social welfare payments.

Furthermore, as the Deputy is aware, I introduced the new whole-of-year budgeting reform, which was announced in the Comprehensive Expenditure Report 2012-2014. This new process has been designed to enhance the role and the policy relevance of the Oireachtas in particular with regard to the role of committees in ex ante consideration of resource allocation priorities in each area. That is the point I made to Deputy Wallace. In future, I intend that this will provide a forum in which Oireachtas committees and Departments can assess and discuss the equality implications of any policy proposal in advance of the final Estimates being decided upon.

With regard to the progressive nature of the budget, I point out to the Deputies that the ESRI recently published analysis on the distributional impacts of budgets 2009 to 2013. Its analysis shows that the overall adjustment to date has been progressive in nature, with the lowest losses occurring in the lower income deciles and the highest losses in the top income deciles. In addition to this, it is important to point out that Ireland’s tax and benefits system has been shown by the OECD to be highly redistributive, with the tax system shown to be the most progressive of developed economies.

I was surprised that we were grouping some of the questions. While it is a regular procedure we are normally notified. I checked my e-mail to see whether I received a notification of this grouping schedule.

In respect of my earlier question about the ASTI dispute, I received an e-mail during the course of the discussion here from a teacher from a school in County Laois for which I booked a visit to the Dáil next month. The teacher apologised for not being able to participate due to the industrial action. The teacher is unable to accompany the students so the trip is cancelled. The teacher apologised for any inconvenience caused. I am not the person to whom the teacher needs to apologise, it is the pupils who are losing out. I would ask the Minister and his colleague, the Minister for Education and Skills, to do something about that. I have just outlined an example of an impact of this dispute on students. It is remarkable that it came at this time.

I am very concerned about the unprogressive nature of budgets in recent years. The Minister nicely glossed over the report relating to 2009 to 2013. Yes, it is correct because the budgets in 2009, 2010 and 2011 were progressive but the two budgets introduced by this Government were not progressive. The Minister has masked the overall progressive nature of the earlier budgets with the two introduced by the Government which were not progressive. The Government's two budgets do not stand up.

In respect of the first point about the ASTI, I am not sure-----

It is an aside.

The Deputy made the point so I will respond to it. I am not sure whether he is addressing his comments to the Government or the ASTI. I regret that the ASTI is taking action. It is regrettable that the students from Deputy Fleming's constituency cannot visit the House. The ASTI is the only union outside the Haddington Road agreement. I would ask it to reconsider and allow the Haddington Road agreement to impact beneficially on many of its younger members but that is something it will have to reflect on.

In respect of the progressivity of the budget, one cannot take a snapshot. If one has maximised the income take so that the marginal rate is now one of the highest, can one keep going? One can be more progressive each time but in relative terms, if one already has the most progressive income tax system, one cannot keep pushing it up to suit an additional snapshot. The Deputy is making a very fair point. We need a better and more accurate snapshot because many things that are looked at under the current switch system do not take account of capital gains adjustments and other factors which impact on the totality of the budget. One needs to look at the entire tax package, not the minor adjustment that is made at budget time, to see whether it is progressive as it sits with other taxation regimes. It is a simple song to sing but it is an inaccurate song to sing if one does not have accurate tools to measure the totality of the tax and welfare provisions in a society.

I am surprised by the Minister's comment about this issue. I thought I was listening to a Fine Gael Minister saying that one cannot keep pushing up the tax rate. The Minister sounds like a convert. In respect of the Economic Management Council, has he been captured by Fine Gael? I worry about the Labour Party and the spending line Ministers, particularly in health, social protection and education. Those Ministers are relying on this Minister to keep the Fine Gael side at bay but when he comes in here to sing the Fine Gael song that one cannot keep pushing up tax rates, I worry about who is looking at the people who will see unnecessary cuts next week because of that Fine Gael attitude that seems to have infected the Minister.

Not only do I want to look after the people who are most vulnerable, which is what we have done very effectively, I also want to look after workers. We cannot keep screwing workers either if that is what Fianna Fáil policy is. We must give some recognition for work and allow people to have a decent take-home wage as opposed to a headline wage. That is a reality too so we must strike a balance. We have struck it reasonably well - protecting all core social welfare payments and DEIS schools, reversing the previous Government's disastrous decision to cut the minimum wage for the poorest workers in the country and taking the lowest cohort of wage earners out of the universal social charge. By any analysis, this Government made progressive decisions to undo the regressive decisions the previous Government made.

I call on Deputy Wallace. Is it Deputy McDonald? Ladies first. Deputy Wallace is allowing Deputy McDonald to go first.

That is very gallant of him. This echoes the sentiment of my earlier question. The Minister instanced the area of DEIS and said that the Government did not touch those posts for the most disadvantaged schools. However, this was only because it got caught out. The Minister for Education and Skills was heading like a steam train to remove teachers from the most disadvantaged schools in the State and what happened? Parents, teachers and public representatives kicked up an almighty stink about it and the Minister had to back off.

The Minister also spoke about how considerations of gender and risk of poverty are factored into the Government's thinking. However, independent research has reflected that those worst affected by the Government's budgets have been women, in particular women parenting alone. It is for that reason that I again make the point to the Minister that one cannot be random about this, look into one's own heart and come up with one's own conclusions. One needs an objective manner with which one measures these things. That is why equality budgeting and equality assessments, as referred to by Deputy Wallace, are so necessary. That is the only way one can truly talk about being equal, fair, equitable and all the language so beloved of the Minister.

I have three points to make in response to Deputy McDonald's comments. First, I agree with her entirely that we need an objective analysis and not a partisan analysis from either side of the House. Objectively, if one looks at the totality of our public spending and taxation regime, one will see that we have a very progressive one in place. Can one tweak it one way or the other, do a snapshot of that and pretend that is an accurate snapshot of the totality? No, one cannot, which is why I am saying we need better tools to do that. I know that Deputy McDonald will use whatever data she can to her own political advantage but that is not good in terms of society.

Deputy McDonald mentioned lone parents. There has been a change, which has been explained. We would like to see greater opportunity for women who have children alone to get back into the workplace and not be permanently dependent on welfare. That is the Scandinavian model that has been looked at independently by outside specialists in this area. They are the recommendations. It is the norm in the developed countries we look to like those in Scandinavia. The Deputy can have those debates with the Minister for Social Protection.

In respect of disadvantage, we have focused on disadvantage and disability significantly in our expenditure. That if why if one looks at disability and adds up what we spend as a Government on disability issues this year, one will see it is €6.2 billion. In the education area alone, our expenditure on disability is now coming close to what we spend on third-level education so we take the fact that every child deserves full participation very seriously. Could we do more if we had more resources? The answer is "Yes" and please God, when we fix our economy, we will have more resources.

I am surprised by some of the Minister's boasts about the progressive tax system. I read last week that-----

Bluntly, I am surprised by Deputy Wallace talking about tax.

I have paid more over my lifetime than the Minister has.

I have paid everything that was due.

I have paid over €15 million. I am not going to take lectures from the Minister who will get far more out of this system than I ever will.

Research by Grant Thornton shows that successive budgets have been regressive and have had a disproportionate impact on lower and middle income households. In a study released last week, Grant Thornton found that a family with one parent earning €40,000 experienced increases in taxes of 125% while a family with both parents earning €40,000 saw a 54% rise in taxes and a family with an income of €190,000 witnessed a 29% increase in its tax bill. Evidently, the burden of austerity is being shouldered by those who have less. That is hardly rocket science. In respect of Deputy Fleming's point, will ASTI members be made to suffer for their decision not to rubber-stamp the breaking of the Croke Park agreement?

A number of questions have been asked and I will answer the last one first. I would ask ASTI members to come under the umbrella of the rest of the public service. That is all. In respect of the notion of rubber-stamping, it was a democratic vote. Members were asked to vote and they made their own democratic decision to exclude themselves. It was not a case of rubber-stamping anything. In Deputy Wallace's view of the world, if they agree, it is a rubber-stamp while if they disagree, it is a democratic decision.

In respect of whether we have a progressive or regressive income tax system, my judgment is predicated on the independent analysis of the OECD. I will send Deputy Wallace the tables.

We will move on to Question No. 8.

My question is linked to Question No. 11.

We have exceeded the time allowed for these questions. I have already been generous.

Sale of State Assets

Questions (8)

Timmy Dooley

Question:

8. Deputy Timmy Dooley asked the Minister for Public Expenditure and Reform if he will subject the sale of any State assets to a post-sale value for money review; and if he will make a statement on the matter. [42484/13]

View answer

Oral answers (5 contributions)

The issue of a post-sale value for money review was raised on the Committee Stage debate on the Gas Regulation Bill, which is being sponsored by my colleague, the Minister for Communications Energy and Natural Resources. On foot of the debate, I understand that the Minister has proposed a Report Stage amendment to the Bill to provide for a report on the operation of the legislation to be laid before the Houses of the Oireachtas within a year, which will address the disposal of Bord Gáis Energy, including steps taken to ensure the State receives fair value from the transaction and other matters.

I thank the Minister for that welcome information. I am pleased that the Minister, Deputy Rabbitte, has agreed to introduce an amendment on Report Stage of the Gas Regulation Bill 2013 to provide for a report to be laid before the Oireachtas in 12 months time. That is an excellent practice and I hope the Minister, Deputy Howlin, will be able to do something similar with the national lottery. He might tell us how the funds will be protected and what will happen during this and subsequent years. Perhaps the Minister, Deputy Rabbitte, might do the same in respect of the ESB's power plants in order that people can look back one year later and learn lessons for the future.

The reform package published by the Government includes a measure that asks for all legislation to be reviewed after a period. I have my own views in that regard. All legislation should be reviewed but the exact period will depend on the type of legislation concerned. Some matters lend themselves to a review after one year, but others would not be fully embedded in that period. That is a matter for debate. I stated on Committee Stage of the National Lottery Bill 2012 that I would update Members on the ring-fencing of money for the national children's hospital. Thankfully, we have had a successful bid of €405 million. The first tranche of that money will be paid in December when the licence is signed and the new licence will become effective 12 months hence. The second moiety of payment, which will be in the order of €200 million, will be ring-fenced for the national children's hospital, and I expect it to be drawn down during the course of 2015.

That is very welcome. It was set out in the memorandum of understanding that 50% of the proceeds of the sale of State assets would be spent on reducing debt. Given that the troika has almost gone, does that still hold or will the Minister be able to use the balance from the sale of State assets in future years for domestic job creation? Everybody in Ireland would support the use of these funds for job creation and stemming the flow of emigration. The sale of assets in the financial arena, such as Bank of Ireland, can be used to repay the national debt.

In regard to the money we borrowed to invest in Bank of Ireland, when our investment is realised, it will be used to reduce the debt. I reached agreement with the troika that we could use 50% of the money accrued from the sale of State assets for direct job creation efforts and the balance as a back stop. I was conscious that Greece and other countries were using unspent Structural Funds as a back stop for public private partnerships, but we did not have any unspent Structural Funds. We have to see what moneys come on stream. I commend my officials on their role in completing the sale process for the national lottery licence. We will see what accrues to the State from the sale of Bord Gáis Éireann, which will come on stream by the end of the year. We should review not only the value for money but also how we spend the money.

EU-IMF Programme of Support Negotiations

Questions (9)

Joe McHugh

Question:

9. Deputy Joe McHugh asked the Minister for Public Expenditure and Reform if he will provide an update on his engagements with the troika; and if he will make a statement on the matter. [42301/13]

View answer

Oral answers (3 contributions)

As the Deputy will be aware Ireland is in the final year of the EU-IMF programme of financial support. We successfully concluded the 11th review mission of our EU-IMF programme, and data released in the Exchequer statement on 2 October indicate that the Exchequer primary deficit target was met for the 12th consecutive quarter. In line with each of the previous quarterly reviews, Ireland has met all quantitative fiscal targets and our continued strong programme implementation has been recognised by the troika. Verification of the relevant quarterly targets forms a key part of the mission, and the Government has repeatedly stated that meeting these conditions on time and on target is the best way to ensure we emerge successfully from this programme, which is our primary focus. It is important to build confidence in the State’s ability to manage its debt and deficit to enable us to return with confidence to the financial markets for funding in as timely a manner as possible. This is one of the principal objectives of the programme.

I have regular interaction with the troika and have discussed all the elements of the programme including fiscal developments, the macroeconomic outlook, progress on commitments regarding restructuring the financial sector and structural reform. Following each review mission, and arising from detailed and lengthy discussions with the troika team, revised versions of the programme documents, including the memorandum of understanding on specific economic policy conditionality, are prepared by my Department and the Department of Finance along with the Central Bank in conjunction with the external partners. These programme documents are made publicly available on my Department’s website.

I thank the Minister for his response and acknowledge the work and interaction that has taken place in the past several hours between his Department, the Department of Finance and the troika. It is important to highlight the challenges that lie ahead of us in regard to exiting the bailout. When we become masters of our own destiny, we will face different challenges. I wish the Minister well in that work.

John Maynard Keynes's philosophy in 1929 was that governments should spend their way out of depression. He was originally a civil servant and I am sure he has fans in the Department of Public Expenditure and Reform who would argue that we should examine our capital programme in a positive and proactive way. There are shovel-ready projects in my constituency, such as the Cockhill bridge outside Buncrana and the link bridge in Letterkenny. Depending on progress and on a positive outcome for the A5 route, there will be opportunities for infrastructure projects in Lifford and Strabane and the Letterkenny link road. I acknowledge these projects cannot all be completed in one year, but the combination of the Minister's good work and the projects that are lined up could provide a positive outcome over a period of time.

I thank Deputy McHugh for his compliments to my staff and to those of the Department of Finance for the detailed discussions in which they engaged not only over the past few hours but also last weekend. We sometimes take for granted the work of civil servants but they work incredible hours in the interest of the State. We are now focusing on the next phase. We will exit the programme by the end of this year and we have to structure our exit. That has been central to our most recent discussions and will be the key element of discussions with the next troika mission. We want to ensure an orderly and trouble free exit from the package while continuing to fund our public services.

I am gratified by the Deputy's enthusiasm for spending. I know he will trenchantly argue his position within his party confines. I am a big advocate of ensuring we have the maximum possible expenditure on all the projects he has instanced and the many more I could add to the list.

Pension Provisions

Questions (10)

Seán Kyne

Question:

10. Deputy Seán Kyne asked the Minister for Public Expenditure and Reform with regard to the Haddington Road agreement, if the reduction in the pension related deduction, currently at 5% of the salary portion €15,000 to €19,999 and due to be reduced to 2.5%, has been implemented; and if not, if he will indicate the timeframe for the introduction of this measure. [42509/13]

View answer

Oral answers (3 contributions)

As legislated for in the Financial Emergency Measures in the Public Interest Act 2013, and as noted in the Haddington Road agreement, the rate of pension related deduction on the €15,000 to €20,000 band of pay received in a year will fall from 5% to 2.5% on 1 January 2014. This rate cut will be worth €125 annually in gross terms to most public servants, with those taxed at the standard rate enjoying the greater gain in terms of take-home pay boost.

I thank the Minister for that clarification. I have been contacted by individuals who believed that this measure would be in effect from 1 July. I will revert to them on the matter. I also acknowledge the Minister's work on the Haddington Road agreement, which signifies the solidarity of public sector workers in restoring our public finances.

I thank the Deputy.

Question No. 11 answered with Question No. 7.

National Procurement Service Savings

Questions (12)

John McGuinness

Question:

12. Deputy John McGuinness asked the Minister for Public Expenditure and Reform the savings that will be achieved from procurement efficiencies in 2013 and 2014; and if he will make a statement on the matter. [42497/13]

View answer

Oral answers (9 contributions)

Reform of public procurement is one of the main projects of key strategic importance in the Government's public service reform plan. Procurement of supplies and services accounts for approximately €9 billion of current spending by the State per annum. This represents a significant portion of overall spending and, therefore, it is essential that the public service achieve maximum value for money and operational efficiency in its approach to public procurement.

In this regard, an external review of the central procurement function was commissioned by my Department last year. The report of the review, which was published on the Department's website last year, found that significant savings could be achieved through the implementation of a transformational change to the central procurement model. In order to realise these benefits, the National Procurement Service has put in place a number of national arrangements designed to secure better value for money from leveraging the public service's buying power in respect of a range of goods and services that are commonly purchased across the public service. These national arrangements have benefits that include cash savings, administrative savings from reduced duplication of tendering, greater purchasing expertise, improved consistency and enhanced service levels.

Earlier this year, I announced the appointment of a chief procurement officer to lead a key element of the Government's public service reform agenda. The new approach to public procurement will involve integrating procurement policy, strategy and sourcing in one office, namely, the Office of Government Procurement; strengthening spend analytics and management; a much greater aggregation of purchasing across the public service to achieve better value for money; examining the specifications set out for goods and services; evaluating demand levels to assess how demand and volume can be reduced; and strengthening supplier and category management.

I table this question because I am generally supportive of the concept of the national procurement office located in the Minister's Department. Last Thursday, the Committee of Public Accounts met his officials.

The Minister mentioned that procurement was valued at approximately €9 billion per annum. Added to capital expenditure, the figure is €12 billion or €13 billion. In Ireland, approximately 90% of Government procurement contracts end up with Irish companies.

The European average is 97% or 98%. The Minister should undertake measures within the EU guidelines to increase our rate to 95% in the next year or so, yet with the same prices. This would result in an extra €600 million or €700 million for the domestic economy. It is a tragedy that €1.3 billion of Government procurement goes to companies outside the country when that rate is not the norm across the EU. Will the Minister ensure that Ireland falls in line with the EU norm? It would lead to more spending in the domestic economy.

I compliment the Minister's office. I hope that it is making good progress. Will the Minister's Department take over the procurement of drugs and medicines from the Department of Health, which has shown its incapability in this regard? Remove that function from the Department of Health. Perhaps the Minister's office could do a better job and achieve some savings.

I thank the Deputy for his complimentary observations about the new office of Government procurement. He has met Mr. Paul Quinn, who attended the committee last week. His value is obvious.

A number of the new appointments that I have made in my Department are on a contract basis and the people in question have specific skill sets. This is a good model for public sector recruitment.

I will bear in mind the Deputy's comments on our common objective of maximising procurement within the State and determine whether there are mechanisms. I will speak with Mr. Quinn about this matter.

The issue of procurement in general is one on which we must have a view and must debate at Cabinet and committee levels. We must get the best possible value for all goods and services that the State and all of its agencies procure.

Most Irish companies agree that some tender documents are constructed in such a way that Irish businesses cannot win them, as they are so large. The Minister stated that there could be scope, but he should consider the overall impact. While a line Department might save €1 million on a contract, the loss of employment locally must be included in the broader perspective. The gains in one Department should not directly result in losses in local businesses.

I will allow Deputy McDonald to contribute before the Minister replies.

I support Deputy Sean Fleming. In fairness to the Government, it has rightly prioritised this issue. However, we must not only consider the value for money aspect, but also the local employment element. I am sure that the Minister and his colleagues are aware of the significant alarm in the stationery sector. There is a belief among long-established domestic companies that jobs will be lost. We must examine mechanisms for unbundling contracts so that we can have a win-win situation, a reduction in costs and better efficiencies while growing jobs within the sector.

I thank the Deputies opposite for their observations. Sometimes, there is a dichotomy between maximising the benefit to the State and ensuring that we do not impact negatively on local jobs. We are considering how the small to medium-sized enterprise, SME, sector can tender for jobs. We have run training programmes for SMEs and discussed bundling for them. Mr. Quinn, the State's new procurement officer, will be able to give the Deputies chapter and verse on this matter.

I will make a final remark to Deputy Sean Fleming, as I am conscious that I am in the presence of the Minister for Jobs, Enterprise and Innovation. This morning, I opened a conference of a range of construction companies in the State. There is a feeling that the situation in that sector is beginning to move again. One of the fears presented to me was that, due to the downscaling of construction companies, we do not have large companies to tender for some of the larger contracts. At least one situation was instanced to me in which a tender was lost to a non-national company. This is an issue about which we must be careful. We must ensure that we have sufficient scale to win all public contracts, but also international contracts, by equipping domestic suppliers to tender for same.

Written Answers follow Adjournment.
Top
Share