Thursday, 28 Apr 2022

Written Answers Nos. 181-202

Tax Code

Questions (181)

Neale Richmond

Question:

181. Deputy Neale Richmond asked the Minister for Finance if he will remove the VAT on automated external defibrillators, replacement pads and batteries; and if he will make a statement on the matter. [21637/22]

Written answers

Minister for Finance

Officials in my Department are currently reviewing the options now available to Ireland in setting VAT rates. This will include consideration of the new options available to Member States  as a result of the recently updated EU VAT rules when setting VAT rates as well as the new limitations introduced on how reduced rates may be applied.

Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations. In this context, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2023.

Insurance Industry

Questions (182)

Pearse Doherty

Question:

182. Deputy Pearse Doherty asked the Minister for Finance if the Office to Promote Competition in the Insurance Market has since its establishment considered the difficulty in accessing home and property insurance for buildings with thatched roofs; if the office has engaged with brokers or providers in other jurisdictions in relation to same; if the office has engaged with the heritage division of the Department of Housing, Local Government and Heritage given the cultural, historical and touristic value of thatched roofs in the Irish landscape; and if he will make a statement on the matter. [21638/22]

Written answers

Minister for Finance

While, under EU law, neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, I can assure the Deputy that this Government is committed to improving the cost and availability of insurance for all consumers, businesses and community groups. This includes niche sectors such as buildings with thatched roofs. 

The whole-of-Government approach being taken through the Action Plan for Insurance Reform sets out 66 actions which aim to improve both the cost and availability of this key financial service, particularly for businesses. The Second Implementation Report, which was published on 1 March 2022, shows that 80 per cent of these actions are being delivered.

Similarly, since its establishment the Office to Promote Competition in the Insurance Market has held over 70 meetings with key stakeholders, including insurance providers, professional organisations and civic society groups, to understand gaps in the Irish insurance market. As part of the effort to increase competition, the Office is working closely with the IDA to broaden the supply of insurance in the market, including in areas which have been identified as ‘pinch-points’, such as that highlighted by the Deputy. The IDA has commenced a multi-phased engagement process with targeted underwriters and will seek to leverage the developments of the Government insurance reform agenda to date. 

Specifically, I have previously raised the issue of thatched roof properties with both Insurance Ireland and Brokers Ireland in meetings with them. Brokers Ireland has informed me that it has a dedicated information service for people having insurance issue with their thatch roof properties and has established a special email address to deal with these queries, which is [e-mail]  

Finally, I would like to take this opportunity to assure the Deputy that securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government and that I will continue to work towards this objective with my colleagues. 

Insurance Industry

Questions (183)

Niamh Smyth

Question:

183. Deputy Niamh Smyth asked the Minister for Finance if matters raised in correspondence by a person (details supplied) will be reviewed; the steps his Department is taking to address this issue; and if he will make a statement on the matter. [21639/22]

Written answers

Minister for Finance

I note that the details supplied relate to the cost of Employers’ Liability insurance for an SME, and the Government’s insurance reform agenda. As the Deputy will appreciate, I am unable to comment on individual cases. Moreover, neither I nor the Central Bank of Ireland can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive).

That said, I would note that the second Implementation Report of the Action Plan for Insurance Reform, published in March this year, showed that insurance reform is progressing well, with some 80% of actions in the Plan now being delivered, and the remaining initiated. It is my hope that the cumulative impact of these reforms will be to improve both the cost and availability of insurance for businesses, particularly SMEs, as well as consumers and other groups.

We are now committed to working with colleagues across Government to deliver the outstanding actions, with a view to improving the affordability of cover in all sectors, including liability insurance for businesses.

I would note that according to the first National Claims Information Database (NCID) Report on Employers’ Liability, Public Liability and Commercial Property insurance, published last year, many businesses are accessing affordable insurance. The Report shows that in 2019, the average premium for package policies was €2,269, and 93% of all policies had a premium of less than €5,000.

Nonetheless, I do accept that premiums for some businesses and organisations may still be rising. This may be due to particular issues in those sectors, which our Action Plan is addressing. The insurance reform agenda is still ongoing and it may take some time for the benefits of the reforms to feed through to reduced premiums and greater availability of insurance for businesses and other groups.

Banking Sector

Questions (184)

Gerald Nash

Question:

184. Deputy Ged Nash asked the Minister for Finance his views on the opinion of the Governor of the Central Bank that the retail banks are not ready to cope with the additional workload that will result from the exit of banks (details supplied) from the Irish banking sector; his views on whether it was a mistake for the two banks in question to proceed having full knowledge of same; and if he will make a statement on the matter. [21647/22]

Written answers

Minister for Finance

While it is regrettable that Ulster Bank and KBC have decided to exit the Irish market, as Minister for Finance, I have no role in the operational matters of any bank in the State. Decisions in this regard are the sole responsibility of the board and management of the banks, which must be run on an independent and commercial basis.

The withdrawal of KBC and Ulster Bank is a challenge facing consumers and SMEs as they need to switch their current and other accounts to new providers. It is important that the Irish banking sector rises to this challenge.

Both the Central Bank and I expect all retail banks to have plans in place to manage the impact of the broader changes and consolidation in the retail banking sector in Ireland. It is the responsibility of the individual banks to ensure that they are putting their customer first, ensuring fair treatment of customers and that customers understand what the changes mean for them.

This week the Central Bank wrote to the CEOs of the five main retail banks to set out its expectations on some key items related to the account migration process. The purpose of these letters is to reinforce and, to any extent necessary, clarify the application of the expectations set out in the Central Bank's previous letter of June 2021 and to invite the CEOs to a roundtable meeting, hosted by Director General, Financial Conduct, Derville Rowland on the following five key issues/risks:

- Notice periods

- Application of the switching process

- New providers making commercial decisions in a manner that facilitates a customer making and executing a switch

- Direct debit originators and/or other service providers

- Vulnerable customers

All customers that currently have an account with KBC Bank and Ulster Bank will be notified by their respective bank, with sufficient notice, to switch their accounts and how the banks will assist them to do this.

However, customers do not have to wait for their banks to contact them and could decide at an earlier stage to move to alternative providers, in advance of any notice period. Where customers are considering switching in advance of the notice period, they should make contact with their current provider before closing their account to ensure they understand any product benefits that may be related to their existing current account.   

In terms of the preparedness of the remaining banks, the Banking and Payments Federation of Ireland (BPFI) has advised that the industry is resourcing up significantly and that over 100,000 accounts have been opened at the three remaining retail banks so far this year. The Department of Finance is engaging with the BPFI on an ongoing basis to ensure that the industry is responding to the challenge appropriately. 

Officials are also meeting representatives from other financial service providers that offer current accounts to discuss how they can support customers opening new accounts because of the withdrawal of both Ulster Bank and KBC. 

Tax Credits

Questions (185, 186)

Holly Cairns

Question:

185. Deputy Holly Cairns asked the Minister for Finance the criteria that are used in assessing the incapacitated child tax credit regarding the requirement in cases in which there is a reasonable expectation that the child will be unable to maintain themselves when over 18 years of age; the forms of evidence that are acceptable in such cases; and if he will make a statement on the matter. [21649/22]

Holly Cairns

Question:

186. Deputy Holly Cairns asked the Minister for Finance his views on broadening the criteria for the incapacitated child tax credit to include children who may have temporary or partial incapacitations. [21650/22]

Written answers

Minister for Finance

I propose to take Questions Nos. 185 and 186 together.

The Incapacitated Child Tax Credit (ICTC) is provided for in section 465 of the Taxes Consolidation Act 1997 (TCA 1997) and is available to any individual who proves that he or she has living, at any time during a year of assessment, a child who:

- if under the age of 18, is permanently incapacitated by reason of mental or physical infirmity to such an extent that there is a reasonable expectation that the child would be incapacitated from maintaining him or herself if they were over the age of 18; or

- if over the age of 18, is permanently incapacitated by reason of mental or physical infirmity from maintaining him or herself and had become so incapacitated either before attaining the age of 21 or whilst in full-time instruction at any university, college school or other educational establishment.

The credit may also be available where an individual has custody of and maintains at his or her own expense any child who fulfils the above criteria.

If the child is under 18, the incapacity must be such that the child would be unlikely to be able to maintain him or herself when they reach the age of 18 even with the benefit of any treatment, device, medication or therapy. For the purposes of this credit, “maintaining” means the ability to support oneself by earning a living from working.

Whether or not an individual is entitled to claim the ICTC, and the nature of the supporting documentation required to prove that entitlement, will be determined having due regard to the facts and circumstances of each individual case, and the nature of the individual child’s incapacity.

In practice, Revenue will generally accept certification from a doctor as to whether:

- there is a reasonable expectation that a child will be incapacitated from maintaining himself or herself in the future; and

- a particular incapacity can be improved by the use of any treatment, device, medication or therapy,

where such certification fully addresses the key elements required in order to prove eligibility for the credit.

In certain cases, having due regard to the specific nature of the incapacity, it is considered reasonable to expect that a clinical diagnosis would have been made by a consultant.

The ICTC is valued at €3,300 and a separate credit is available in respect of each child who is permanently incapacitated. If an individual has more than one child who is permanently incapacitated, he or she may therefore claim a credit for each such child. However, only one credit may be claimed in respect of an individual child. Therefore, if a permanently incapacitated child is maintained by more than one person, the tax credit is divided between those persons who maintain the child.

Further information in relation the ICTC can be found on Revenue’s website or in Tax and Duty Manual Part 15-01-05, both of which may be found at the links below:

- Revenue website: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/children/incapacitated-child-credit/index.aspx

- Tax and Duty Manual Part 15-01-05: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-05.pdf.

Regarding broadening the criteria for the ICTC to include circumstances where a child has a temporary or a partial incapacity, in practice such extensions to the criteria would be extremely difficult to administer.  In particular, determining what constitutes temporary or partial incapacity would introduce a significant degree of subjectivity into the conditions for the tax credit. Due to this, I have no plans to amend the credit in the near future.

Finally, I would note that this credit is available in addition to other supports provided by Government bodies such as the Department of Health, the Department of Social Protection and the Department of Children, Equality, Disability, Integration and Youth to assist those with caring responsibilities.

Question No. 186 answered with Question No. 185.

Mortgage Interest Rates

Questions (187)

Bernard Durkan

Question:

187. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which home borrowers in Ireland have to pay higher interest rates than many of their counterparts throughout the European Union; if these issues are being addressed in the short and medium-term; and if he will make a statement on the matter. [21880/22]

Written answers

Minister for Finance

I am aware that the general level of new lending interest rates in Ireland is higher than is the case in many other European countries.  The most recent data published by the Central Bank on this issue indicates that, at end February 2022, the weighted average interest rate on new Irish mortgages was 2.76% compared to an average of 1.36% for the euro area.  However, the price lenders charge for their loans is a commercial matter for individual lenders.  As the Deputy is aware, I as Minister for Finance cannot determine the lending policies of individual banks, including the interest rates they charge for their mortgages and other loans.   

Nevertheless, it should be noted that, over the past number of years, mortgage interest rates have declined.  For example, interest rates on new mortgages (excluding renegotiations) have fallen from 4.05% in December 2014 to 2.76% at end-February 2022.  Also, in terms of fixed rate mortgages, the weighted average interest rate on new fixed rate mortgage agreements stood at 2.60% in February 2022, down from 4.11% in December 2014.

However, it should also be noted that Irish mortgage and other loans can have different characteristics to those offered in other countries. For example, many Irish banks include incentives such as cash back offers, which reduce the effective Irish mortgage interest rate. Also Irish mortgages are generally not subject to upfront fees which are typically charged by banks in some other EU jurisdictions.

There are also a number of important factors which will likely influence the interest rates charged on Irish mortgages. These include for example operational costs, certain structural factors as referenced above (such as incentives offered), as well as the fact that pricing will reflect:

- credit risk and capital requirements which in Ireland are elevated due to historical loss experience;

- the level of non-performing loans which is higher in Ireland relative to other European banks (as provisioning and capital requirements are higher for these loans to reflect their higher risk and this in turn results in higher credit and capital costs for the Irish banks); and

- higher cost-to-income ratios which has been a characteristic of the Irish banking sector in recent years. 

To conclude, I appreciate that a greater level of sustainable competition in the credit market will be of benefit to consumers and other borrowers.  Accordingly, the review of the retail banking market which is now underway in my Department will, among other issues, consider how the banking system can best support economic activity, assess competition and consumer choice in the market for banking services and consider options to further develop the mortgage market.

Covid-19 Pandemic Supports

Questions (188)

Danny Healy-Rae

Question:

188. Deputy Danny Healy-Rae asked the Minister for Public Expenditure and Reform if he will consider making the Covid pandemic bonus available to all other sectors that were dealing directly with the public during lockdown. [21643/22]

Written answers

Minister for Public Expenditure and Reform

I want to acknowledge the contribution made by people across our society to the response to the COVID pandemic over the last two years.  Their continued contribution is key to enable us to navigate our way through the various challenges the pandemic has presented.

Government was keen to acknowledge these contributions. Collaboration and solidarity have been hallmarks of our national approach to COVID-19 and the measures announced by Government on 19 January 2022 are reflective of those principles.

After careful consideration, the Government made the decision to hold a national day of recognition and commemoration on the 18th of March this year, and has agreed another permanent public holiday in February commencing in 2023 - measures which benefit workers across the whole labour market.

The Government took many factors into consideration when coming to a decision in relation to any additional recognition measure for specific sectors.  It was ultimately agreed that it would be appropriate to further acknowledge the contribution of those working in clinical settings in recognition of the fact that they were working in environments where Covid-19 was definitely present and the increased risk associated with that.  

This is a balanced package of measures, in terms of providing a measure of recognition for the contributions of all workers across the economy, while also recognising in particular the risks faced by certain healthcare workers during this pandemic.

Public Expenditure Policy

Questions (189)

Bernard Durkan

Question:

189. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which he proposes to continue to use reform as a means of controlling costs in this jurisdiction for the foreseeable future; and if he will make a statement on the matter. [21587/22]

Written answers

Minister for Public Expenditure and Reform

I thank the Deputy for his question.

A range of budgetary reforms have been put in place in recent years, to drive spending efficiency and effectiveness. It is a key responsibility of every Department and Minister to manage expenditure within their respective allocations and careful monitoring of spending against profile and of progress on programmes and projects is required. Public organisations are required to treat public funds with care, and to ensure that the best possible value for money is obtained whenever public money is being spent or invested. This is in accordance with the Public Spending Code. Moreover, Action 5 of Our Public Service 2020 emphasises the need to ensure value-for-money principles are adhered to across the Public Service.

As part of this broader approach to ensuring value for money, the introduction of shared services and centralised procurement in earlier phases of reform continue to be embedded in the delivery of services to clients and customers. My Department continues to actively explore new areas and mechanisms to further embed reforms and efficiencies that will enhance the cost-effectiveness of public services; for example, through greater use of opportunities presented through digitisation, intelligent automation, innovation and the implementation of new ways of working and service design.

Public Expenditure Policy

Questions (190)

Bernard Durkan

Question:

190. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which public expenditure on infrastructure can be targeted at those areas most in need of infrastructural investment; and if he will make a statement on the matter. [21588/22]

Written answers

Minister for Public Expenditure and Reform

Project Ireland 2040 sets out the Government's overarching vision for the provision of infrastructure in order to better cater for the needs of the State’s existing population and to accommodate projected population increases in a balanced and sustainable way. 

Project Ireland 2040 includes the National Planning Framework (NPF), which sets the overarching spatial strategy for the next twenty years and sets out ten National Strategic Outcomes (NSOs) to provide a strategic framework for the selection and development of appropriate interventions to address infrastructure needs at a national, regional and local level. 

Under the NPF, the three Regional Assemblies are now responsible for co-ordinating, promoting and supporting the strategic planning and sustainable development of their regions, consistent with the objectives of the NPF, through the preparation of Regional Spatial and Economic Strategies (RSES). These strategies help inform the targeting of public infrastructure investment at the regional and local level.  

The ten-year National Development Plan (NDP) has also been put in place to underpin the implementation of the NPF and to support the development and meet the infrastructure needs of all counties and regions, including both urban and rural areas. The NDP contains expenditure commitments for a range of strategic investment priorities in infrastructure which have been identified by the relevant funding departments as critical to the delivery of the NPF vision.  

My Department is responsible for publishing the NDP and jointly monitoring its delivery. As part of the most recent update to the NDP, my Department coordinated the inputs from the relevant funding bodies and conducted supporting analysis, such as an assessment of the environmental impacts of infrastructure investment proposals. Within this framework the funding departments and agencies identify infrastructure needs relating to their own sectoral strategies and goals and prioritise projects accordingly.  

Finally, my department is responsible for issuing and maintaining capital investment guidance at a central level within the Public Spending Code (PSC). The PSC provides a framework for the appraisal, planning and delivery of capital investment projects. These guidelines help ensure public infrastructure projects are selected, designed and delivered in a manner that meets and is proportionate to the identified needs within an area and provides value for money.  

Question No. 191 answered with Question No. 110.

Public Expenditure Policy

Questions (192)

Bernard Durkan

Question:

192. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the degree to which he expects reform to be a part of Government policy in the future, having particular regard to success in this area in the past; and if he will make a statement on the matter. [21590/22]

Written answers

Minister for Public Expenditure and Reform

I wish to advise the Deputy that under the Programme for Government – Our Shared Future, there is a commitment to continuing reform. The Programme outlines that reform to public services, among other areas, is an integral part of this government’s core missions. This is reflected in my Department’s Statement of Strategy 2021-2023 which sets out driving reform and innovation across the Civil and Public Service as a strategic goal for my Department. One key factor of this expressed in the Strategy is the delivery of the next phases of Civil Service Renewal and Public Service Reform, including the continued implementation of the Public Service Innovation Strategy, digital government, procurement and people related reforms, with particular focus on shared and user-driven solutions and the workforce, workplace and organisation of the future. 

To this end with a view to the future, officials are currently preparing the next phase of public service reform (to succeed Our Public Service 2020). This will incorporate priorities that were articulated in the recently published Public Service Innovation Strategy, Making Innovation Real. It will also align with ambitions set out in the programme of renewal for the Civil Service (Civil Service Renewal 2030) published in May last year and its recently published three year Action Plan (Civil Service Renewal 2024), as they relate to the wider Public Service. Additionally, the Office of the Government Chief Information Officer under my Department published a new Public Service Digital Strategy, Connecting Government 2030: A Digital and ICT Strategy for Ireland’s Public Service, which sets out an approach to deliver digital government for all, benefitting both society and the broader economy. It will also drive the wider GovTech priorities as well as bring significant public value benefits. These strategies set out the aims and priorities in these policy areas going forward and will aid the continuation of ongoing reform across the public service into the future.

Question No. 193 answered with Question No. 110.

Public Expenditure Policy

Questions (194)

Bernard Durkan

Question:

194. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform if he remains satisfied that the level of reform interposed with public expenditure is sufficient to continue to meet the targets as laid out; and if he will make a statement on the matter. [21592/22]

Written answers

Minister for Public Expenditure and Reform

I thank the Deputy for his question.

The Department of Public Expenditure and Reform’s mission as laid out in the Statement of Strategy 2021- 2023 is to serve the public interest through sound governance of public expenditure and by leading and enabling reform across the Civil and Public Service.

To date a number of strategies have been published to carry out the Department’s mission, and at present the next phase of public service reform (to succeed Our Public Service 2020) is being prepared by officials. It will incorporate priorities that were articulated in the Public Service Innovation Strategy, Making Innovation Real in addition to aligning with the ambitions set out in the programme of renewal for the Civil Service (Civil Service Renewal 2030) and its recently published three year Action Plan (Civil Service Renewal 2024).

Additionally, in March 2022, the Office of the Government Chief Information Officer in my Department published a new Public Service Digital Strategy Connecting Government 2030: A Digital and ICT Strategy for Ireland’s Public Service, which articulates my Department’s ambitions for digital reform by further embedding digitisation and the increased delivery of digital services to the public.

Wage-setting Mechanisms

Questions (195)

Bernard Durkan

Question:

195. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform if reform will play a central role in the context of national wage agreements in the future; and if he will make a statement on the matter. [21593/22]

Written answers

Minister for Public Expenditure and Reform

The commitment to public service reform has and will always be a key feature of public service agreements. All public service Agreements, beginning with the Croke Park Agreement in 2010 have included measures to reform and modernise public services.

The Covid-19 pandemic saw an unprecedented display of commitment, flexibility hard work and agility in service provisions across the range civil and public services. The current public service Agreement Building Momentum reflects a commitment to harness this momentum for change to meet the immediate challenges that present in the lifetime of the Agreement, and to maintain this momentum to prepare for future challenges.

The Agreement also brings forward the provisions of previous agreements in relation to reform and continues to support the delivery of key national reform plans and initiatives which are listed in the Agreement including the implementation of Sláintecare in the Health sector and the implementation of A Policing Service for our Future in the Justice sector. 

More specifically, this Agreement provides an overarching framework for reform. 

The reform measures are grouped under three headings:

- Retention and continuation of positive reforms prompted by COVID crisis. For example: digital work/service solutions, rapid redeployment of staff, extended hours of service, agility of public service.

- The potential for technology to transform service delivery; and

- Improving access to services

Measures include:

- a focus on improved outcomes in terms of how citizens engage with and experience public services;

- improved delivery channels (including digital delivery); and

- greater flexibility and cross-organisational co-ordination

Under the Building Momentum agreement, each sector of the public service has committed to the development and implementation of bespoke sectoral reform action plans. These plans have been published and are available at gov.ie.

Public Procurement Contracts

Questions (196, 197)

Bernard Durkan

Question:

196. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which his Department continues to monitor the progress of Government contracts, with particular reference to the need to ensure any progress of a positive nature continues; and if he will make a statement on the matter. [21594/22]

Bernard Durkan

Question:

197. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which delays in public procurement are currently contributing to rising costs; and if he will make a statement on the matter. [21595/22]

Written answers

Minister for Public Expenditure and Reform

I propose to take Questions Nos. 196 and 197 together.

Under EU law, public contracts above a certain value must be advertised EU-wide and awarded to the most competitive tender in an open and objective process to promote an open, competitive and non-discriminatory public procurement regime which delivers best value for money.   All Irish public bodies are obliged to spend public funds with care, and to ensure that optimal value for money is obtained in accordance with the Public Spending Code which sets out the rules and procedures to ensure that these standards are upheld across the Irish public service. 

Each Accounting Officer is responsible for the monitoring of performance of public contracts under his or her remit and for ensuring that the public procurement function is discharged in line with standard accounting and procurement rules and procedures efficiently and effectively to deliver maximum value for money for the taxpayer.  Contracting authorities are responsible for establishing arrangements for ensuring the proper conduct of their affairs, including conformance to standards of good governance and accountability with regard to procurement.   

The Office of Government Procurement (OGP), an office within my Department, has responsibility for the National Public Procurement Policy Framework which sets the overarching policy framework for public procurement in Ireland. This framework enables a more consistent approach to public procurement across the public sector.  The OGP has published the Public Procurement Guidelines for Goods and Services on its website www.gov.ie/en/publication/c23f5-public-procurement-guidelines-for-goods-and-services/ to provide a comprehensive interpretation of the public procurement regulations. The guidelines are designed to improve consistency and promote best practice in the application of the public procurement rules to deliver best value for money.  There is a section specifically dedicated to managing contracts contained within the guidelines which outlines the importance of active management by contracting authorities of contracts to maximise value for money. 

With regard to the time required to administer the procurement process, for contracts above the EU thresholds, minimum time-limits are set down for the different stages of the particular contract award procedure chosen in the 2016 Regulations. Under the 2016 Regulations, the statutory minimum time limits by which suppliers have to respond to advertised procurements and submit tender documents have been reduced by approximately one third when compared with the previous rules. This flexibility speeds up simpler or off-the-shelf procurements, but still permits longer timescales for requirements where tenderers need more time to provide detailed responses. The time limits in the 2016 Regulations are minimum time limits and contracting authorities should take  into account the complexity of the tender and the volume or complexity of information that the tenderers are required to submit when setting any time limits.  The timelines for the different procurement procedures can be found in Appendix V of the above mentioned Procurement Guidelines. 

Currently inflation is being driven by external global factors which is impacting all sectors of the economy.  As the rate of inflation remains elevated, prices are likely to rise.  This is particularly significant in a contract which operates for a number of years. The impact of inflation over the duration of the contract must be taken into account if the contract is to be successfully delivered.  Whether that risk is borne by the supplier or the contracting authority or shared between them is determined by the conditions of contract. 

In recognition of the volatility in the price of construction materials and being mindful of the impact that may have on the delivery of the NDP, in particular the capacity of contractors to bear the risk of inflation, I introduced amendments to the Public Works Contracts in January 2022 that are aimed at sharing the risk of materials price inflation. These measures include:

- Limited indexation of the tender price to cover price increases to materials in the period between the submission of the tender and the award of the contract;

- A reduction in the fixed price period once the contract has been awarded to 24 months;

- Provision for the contractor to seek an adjustment to their price once the contract has been awarded should the price of a particular material when purchased increase by more than 15% on its price at the time the contract was awarded; and 

- Provision for the public body to seek a reduction in the price where the price of a particular material reduces by more than 15% from the date the contract has been awarded has also been introduced.   

Finally, to assist contracting authorities in their procurement of common goods and services and to get value for money promptly, efficiently and without delay, contracting authorities are encouraged to check the Office of Government Procurement website for existing or planned procurement arrangements which may meet their needs. 

Question No. 197 answered with Question No. 196.

Public Expenditure Policy

Questions (198)

Bernard Durkan

Question:

198. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which the concept of reform continues to be applied across all Departments with a view to ensuring best practice, value for money and compliance with the principles of reform; and if he will make a statement on the matter. [21596/22]

Written answers

Minister for Public Expenditure and Reform

I thank the Deputy for his question. In view of the significant and pervasive impacts experienced as a consequence of the Covid-19 crisis, the Government's programme of reform and modernisation is particularly relevant as we seek to return our economy and society to full recovery.

With respect to best practice in reform, in accordance with my Department's Statement of Strategy, officials are currently preparing the next phase of public service reform (to succeed Our Public Service 2020). This will incorporate priorities articulated in the recently published Public Service Innovation Strategy, Making Innovation Real, in addition to aligning with ambitions set out in and its three year Action Plan (Civil Service Renewal 2024), as they relate to the wider Public Service. Additionally, the Office of the Government Chief Information Officer in my Department published Connecting Government 2030: A Digital and ICT Strategy for Ireland’s Public Service, which sets out an approach to deliver digital government for all, while also driving the wider GovTech priorities. These strategies aim to drive best practice in regards to reform in the Public Service.

As regards value for money, under the Programme for Government – Our Shared Future, there is a commitment to continuing reform and improvement of the budgetary process. This will build on reforms introduced over the last number of years, including Performance Budgeting and Equality Budgeting, which seek to enhance Ireland’s budgetary framework and ensure that expenditure is managed in an efficient and effective way. It is a key responsibility of every Department and Minister to manage expenditure within their respective allocations and careful monitoring of spending is required. Public organisations are required to treat public funds with care, and to ensure that the best possible value for money is obtained whenever public money is being spent or invested. This is in accordance with the Public Spending Code. Moreover, Action 5 of Our Public Service 2020 emphasises the need to ensure value-for-money principles are adhered to across the Public Service.

As part of this broader approach to ensuring value for money, the introduction of shared services and centralised procurement in earlier phases of reform continue to be embedded in the delivery of services to clients and customers. My Department continues to actively explore new areas and mechanisms to further embed reforms and efficiencies that will enhance the cost-effectiveness of public services; for example, through greater use of opportunities presented through digitisation, intelligent automation, innovation and the implementation of new ways of working and service design.

In order to ensure coherence and support for the reform efforts across the wider Public Service, my Department has established the Public Service Management Group and Public Service Leadership Board, which draw on senior management from right across the Public Service. These senior level groups oversee the delivery of our reform programme for the public service.

National Development Plan

Questions (199)

Bernard Durkan

Question:

199. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the degree to which he expects all Government projects to continue to be completed on time and within budget; and if he will make a statement on the matter. [21597/22]

Written answers

Minister for Public Expenditure and Reform

As part of Project Ireland 2040 (PI2040), the National Development Plan 2021-30 (NDP), published on 4th October 2021, sets out the Government’s over-arching investment framework and broad direction for investment priorities for this decade.

As Minister for Public Expenditure and Reform I am responsible for setting the overall capital allocations across Departments and for monitoring monthly expenditure at a Departmental level. My Department is also responsible for maintaining the national frameworks within which Departments operate to ensure appropriate accounting for and value for money in public expenditure such as the Public Spending Code.

The Public Spending Code sets the value for money requirements and guidance for evaluating, planning and managing capital projects. Management and delivery of individual investment projects within the allocations agreed under the NDP and within the national frameworks is a key responsibility of every Accounting Officer and Minister.

It is important to acknowledge that the majority of public investment projects are delivered on budget and on time and there is a high level of professionalism across the sectors. To build on these strengths, the NDP set out the range of actions that are being taken to strengthen delivery, maximise value for money and ensure to the greatest extent possible that projects are delivered on time, on budget and with the benefits targeted at the outset. 

The update of the Public Spending Code in 2019 combined with lessons learned from domestic projects and international best practice highlighted the need for more structured scrutiny of major public investment projects, particularly in the areas of planned delivery, costings and risk. This is to ensure that Government is making decisions with a full picture of the proposal, its costs, risks and benefits.

In order to achieve this, my Department has introduced two key reforms:

- The introduction of an External Assurance Process (EAP) for projects over €100m which will provide independent project scrutiny at key decision stages.

- A new Major Projects Advisory Group (MPAG) has been established to further strengthen project management.

These reforms, alongside ongoing engagement with the construction sector regarding capacity and innovation, will support the effective delivery of Project Ireland 2040.

Departmental Transport

Questions (200)

Catherine Murphy

Question:

200. Deputy Catherine Murphy asked the Minister for Public Expenditure and Reform his plans to convert the ministerial allocation of vehicles to electric vehicles. [21617/22]

Written answers

Minister for Public Expenditure and Reform

In response to the Deputy's question my department has no role in relation to this matter. As you may be aware, under Section 26 of the Garda Síochána Act 2005 (as amended) the Garda Commissioner is responsible for the management and administration of Garda business, including the management of the Garda fleet and all decisions related to the needs of the fleet.

Flood Risk Management

Questions (201, 202)

Holly Cairns

Question:

201. Deputy Holly Cairns asked the Minister for Public Expenditure and Reform the steps he is taking to trial natural flood management as part of flood relief schemes; and if he will make a statement on the matter. [21657/22]

Holly Cairns

Question:

202. Deputy Holly Cairns asked the Minister for Public Expenditure and Reform the number of trees that have been planted as part of each flood relief scheme nationally since 1 January 2018; and if he will make a statement on the matter. [21658/22]

Written answers

Minister of State at the Department of Public Expenditure and Reform

I propose to take Questions Nos. 201 and 202 together.

The Office of Public Works (OPW) has been engaged in a number of activities to assess and develop nature-based solutions to flood risk management.

In 2019, a four-year research project, under the Environmental Protection Agency (EPA) research programme, titled ‘A Strategic Look at Natural Water Retention Measures’ (SLOWWATERS) commenced. This ongoing research has a budget of €508,000 and is co-funded by the OPW and the Department of Environment, Climate and Communications. The research will assess the benefits of nature-based solutions for agricultural catchments in Ireland. The project outputs will provide recommendations for the management of specific catchment types relevant to the Irish environment by quantifying the magnitude of nature-based solutions required to reduce flood peaks and improve downstream water quality by attenuating nutrients.

In addition to co-funding large-scale research, the OPW has contributed to funding community led work. In 2019, a study carried out by Trinity College Dublin on behalf of the Inishowen Rivers Trust, and funded by the OPW, to assess the feasibility of implementing nature-based solutions for catchment management at five locations on the Inishowen peninsula was completed. This study was followed by a LEADER funded project to implement nature-based solutions in Clonmany, to which the OPW has committed funding. This project has implemented 69 measures, typically leaky-dams to slow flood peaks, and has involved extensive landowner and community engagement.

The OPW co-chaired a working group with the EPA which was established in 2019 to advise the National Technical Implementation Group of the Water Framework Directive on the use of nature-based solutions, to contribute to the achievement of environmental objectives set out in the second River Basin Management Plan cycle. The working group presented their findings in 2020 and the OPW is now part of the steering group for an EPA research project to implement a key recommendation from the working group entitled ‘Integrated Framework for River Restoration and Nature-based Solutions for Integrated Catchment Management’. The aim of this project is to develop a decision support framework to identify appropriate measures for restoring rivers and implementing nature-based solutions for integrated catchment management that would work to restore impacted surface waters.

The OPW focuses on providing protection against extreme floods, such as the 100-year flood, which cause the most significant damage to communities, and there may be very limited, if any, benefit from natural flood risk measures during such events. Upstream retention is a measure that would have been considered for all schemes and is a feature of a number of recently completed or planned schemes, such as for Clonakilty, and also on the Wad and Poddle rivers in Dublin.

The development of flood relief schemes under the OPW’s capital programme now involves a specific requirement to assess the potential for nature-based solutions as part of the overall solution to managing flood risk for a particular community. Where feasible, these measures will be implemented to reduce flood risk and contribute to achieving co-benefits such as water quality improvement, habitat creation, and climate adaptation.

While the information on the number of trees planted in not available at this time, in terms of tree planting for flood relief schemes, the OPW together with the local authorities, that are the lead for many flood relief schemes, both minimise the number of tress to be removed and ensure compensatory tree planting as part of the project landscaping.

The design of all flood relief schemes involves an extensive series of environmental assessments. The design of the schemes and the construction methodology are developed to minimise the impact on the environment, including trees. Where warranted, tree surveys are carried out to identify individual trees that are to be removed and supporting surveys are carried out, such as bat surveys if there is potential value for the bat habitat.  To complete the project, typically a landscape plan is developed which sets out a planting plan, including for native trees as appropriate.

Question No. 202 answered with Question No. 201.