Tuesday, 1 October 2019

Questions (97)

Joan Burton


97. Deputy Joan Burton asked the Minister for Public Expenditure and Reform the level of construction inflation that has been experienced by his Department in each of the years 2016 to 2018 and to date in 2019 in respect of construction projects and other capital projects; the way in which he monitors construction inflation and the mechanisms he employs to establish this; and if he will make a statement on the matter. [39450/19]

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Written answers (Question to Public)

Due to the nature of its role, my Department had no State Infrastructure projects funded through its own Vote from 2016 to-date, so the issue of construction inflation on its projects does not arise. The main purpose of capital projects and associated investment undertaken by my Department is to support greater effectiveness and efficiency across the Civil and Public Service through investing in ICT.

In the wider Government context, my role, as Minister for Public Expenditure and Reform, is to oversee the effective implementation of the National Development Plan 2018-2027 and to maintain the national frameworks such as the Public Spending Code within which Departments operate to ensure appropriate accounting for, and value for money in, public expenditure.

To support the efficient implementation of the National Development Plan and Departments as they work to secure value for money at project level, a suite of key reforms have been introduced including:

- Establishment of a Construction Sector Group to ensure regular and open dialogue between Government and the construction sector;

- A Project Ireland 2040 Delivery Board of Secretaries General meets regularly to ensure effective leadership of the implementation process;

- The establishment of an Investment Projects and Programmes Office (IPPO) in my Department to co-ordinate reporting on the plan and to drive reforms included strengthened business case and project appraisal. As part of its function in driving reforms to strengthen business cases, the IPPO provides a technical quality review of business cases for major projects. Since its establishment, the IPPO has reviewed many project appraisals across a range of sectors including roads, rail, communications, energy, tourism and housing;

- The publication of a Capital Projects tracker to inform citizens about projects in their area and to give a greater overview to the construction sector.

As part of the ongoing reform of Ireland’s public investment management systems, the Department of Public Expenditure and Reform is updating the 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. The Office of Government Procurement is conducting a review of construction procurement which will align with the updated Public Spending Code.

The updated Public Spending Code will include the following reforms:

- Strengthened and harmonised capital appraisal guidance;

- Greater clarity on governance and roles and responsibilities;

- New mechanisms to improve the accuracy of cost estimates;

- Improved project life cycle to better reflect the realities of project delivery; and

- Increased transparency through publication of business cases and evaluation reports.

The revised central elements of the Public Spending Code relating to the appraisal and management of public capital projects will be published this Autumn. Further technical guidance building upon these central elements will follow later in 2019 and in 2020. In addition, my Department is developing a new governance and assurance process for major projects with an estimated cost of over €100 million.