Tuesday, 1 October 2019

Questions (66)

Barry Cowen


66. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform when the public spending code will be updated; the specific changes to the public spending code that are being envisaged; and if he will make a statement on the matter. [39880/19]

View answer

Oral answers (7 contributions) (Question to Public)

I ask the Minister to respond.

As part of the ongoing reform of the public investment management systems, we are updating our public spending code. The purpose of this update is to strengthen the existing guidance to better align with the realities of project delivery and with a particular focus on improved appraisal, cost estimation and management. Clearly, our experiences with the national children's hospital earlier in the year have informed and influenced the work.

In terms of what is under way, we are looking at a number of different areas. The first of these is how we can better appraise big capital projects far earlier in their life cycle and before decisions are made on them. The second focus is on achieving greater clarity on who decides what and when. We also need to be clearer on what cost estimates are and to be able to compare them with the business case for the projects. More realistic expectations regarding how a project can be delivered are needed for big projects and we need to be more transparent regarding the publication of business cases and evaluation reports. The work on these issues is almost complete and I anticipate publication of the conclusion of all this work in the coming weeks.

I thank the Minister for his response. This came to a head earlier this year when a contract was awarded by the HSE in Limerick to a company with a fractured history in the delivery of a capital programme. The Taoiseach stated at the time the children's hospital issue was being debated in the House that previous performance in the delivery of capital projects would have to be given weight in the procurement process. We had hoped and expected the update to be forthcoming much quicker but that has not been the case. I acknowledge the Minister's comment that much work has been done and the conclusions of this work will be before the House soon. It is imperative that this happens as soon as practically possible. People want to see that lessons have been learned from the children's hospital debacle and that it is not repeated. This requires correcting the appropriate legislation or procurement policy to ensure the same thing does not happen again. While I do not like mentioning names in the House, I will do so if I have to. After the children's hospital debacle, the HSE awarded a contract to a company which had a poor record in delivering another project. However, its record could not be taken into consideration as part of the process.

I am aware of the issue to which Deputy Cowen refers and it is one that we are evaluating. The challenge we have is that if a company submits a tender for a particular project, unless there are exceptional extenuating circumstances, we must evaluate that tender for the project. The Deputy has been understandably careful in referring to this issue. Some companies that experience difficulties with individual projects subsequently demonstrate that they are capable of delivering other large and demanding projects on time and on budget. I am considering the issue of how we weigh up the performance of a company in its entirety versus its ability to deliver a particular project. At this point in the process, it appears to me that we must continue to give weight to the value of tenders submitted against the project itself, as opposed to allowing the process to be influenced by other broader considerations. We are weighing up that issue.

If a player who played poorly in the semi-final says he can improve his performance in the final, I still have to make a decision not to pick him when picking the team for the final. The public has seen the performance of the procurement process and the evaluation, preparation and recommendations of a contract for the children's hospital, and these have left much to be desired. People expect that lessons will be learned and new structures and mechanisms put in place to ensure this does not happen again but, lo and behold, it appears it has happened again. Let that be the last time. Hopefully, the spending code will be before us sooner rather than later in order that we can address it.

To use the Deputy's analogy, if the same player had a bad outing in the semi-final but played well in the quarter final and did very well in the group stage, how should we assess all of his performances? This is the calculus that we have. I understand the point the Deputy is making. If things do not go well in a project but the company in question had delivered many other projects very well, how should we weigh everything up? This is the challenge. In the case of a company of scale where the Deputy might point to things that went wrong, one could also point to many other projects which went well and were brought in on budget and on time. As I said, I am aware of the issue to which the Deputy refers. We are weighing up whether we can recognise this issue in changes we might make to the public spending code. However, if we do so, we must look at a player's overall performance as opposed to his performance in a single game.

Now that the Members are using sporting parlance, I hope the 11 changes will make a difference this week.