I wish to remind the House that this debate is confined to three hours.
Progress Report of the Committee on Public Expenditure: Motion.
I move:
That Dáil Éireann takes note of the First Annual Report of the Committee on Public Expenditure.
I am happy to introduce this first annual progress report which summarises briefly the committee's work and activities since our first meeting in September 1983 up to the end of last month. The report has an index at the back which provides a brief sketch of the many and varied topics discussed and touched upon by the committee during that time. Some of these were naturally disposed of during one committee meeting while others required more in-depth investigation by the committee. In some cases, these continue to be the subject of inquiry.
The challenge facing this committee working on behalf of the Dáil is a major one involving the review and assessment of virtually all the moneys spent by the State on Government Departments and offices as well as the related non-commercial State-sponsored bodies, a total of almost 60 different agencies. This process of review and examination is leading and will continue to lead to recommendations on how such bodies can be made more efficient and cost effective and, conversely, how wasteful or obsolete expenditure may be eliminated. Every year, hundreds of millions of pounds are spent on a variety of programmes of public expenditure. This is public money, raised through various forms of taxation, and there is a growing conviction among the public, professional commentators and Members of this House, that the public and the State may not be getting the best value for money in many of these cases. The work of our committee, therefore, on behalf of Dáil Éireann, is vital in assessing whether such programmes of public expenditure are justified, whether they are effective if so justified, whether other cost effective alternatives which would meet the objectives of Government policy might be possible and in general to ensure that the public and the Dáil are convinced beyond any reasonable doubt that the public's money is being spent in the best and most efficient manner possible.
To give an indication of the scale of the problem, let us consider that in the past seven years the proportion of Ireland's GNP taken up by public expenditure has risen from 46 per cent in 1977 to an estimated 62 per cent in 1984. This year total public expenditure is estimated at almost £9,000 million, being £7,000 million on current expenditure and almost £2,000 million on capital expenditure. This represents a figure of approximately £2,600 for each person in the country. Obviously a reasonable target, say an improvement in efficiency of a small percentage, whether 1 per cent or 10 per cent, would result in extraordinarily large savings in net terms over a period of years. For example, an efficiency improvement of 1 per cent on total public expenditure would result in net savings of some £90 million.
The targets the committee are setting are reasonable and attainable and, with goodwill all round, can be achieved. The massive problem of public liability which is such a great burden need not necessarily be dealt with by automatic, arbitrary cutbacks but by significant qualitative improvements in value for money. We can save hundreds of millions if we pursue that concept and all the evidence we have managed to glean in this first tentative year of our existence points in that direction.
This year £2,376 million will be spent by the Exchequer on pay. In addition, about £314 million will be paid by local authorities, plus unknown sums by other public bodies, on non-Exchequer financed pay bills. This total does not include certain other sums which relate to other commercial State-sponsored bodies which do not fall within the jurisdiction of our committee. These figures show not only the huge levels of public expenditure in these areas but also give an indication of the size of the task which confronts this committee and the House and an indication of the benefits which can be achieved if we pursue reasonable targets in a logical fashion. We have set ourselves realistic targets so that all Departments, offices and State-sponsored bodies will have been subject to review individually and in depth over a five-year period. We do not underestimate the size of this task and we are determined to achieve the goals we have set ourselves, using the best methods available to us and without fear of comment on any recommendations we see fit to write into our reports. This is the first such major review in the history of the State and I hope it will be successful. We are getting extraordinarly willing co-operation from virtually everybody with whom we are coming in contact. This augurs well.
For the public generally there is no clear understanding of what public expenditure is truly about. People see a massive tax bill and they hear about foreign borrowing and public expenditure but to the man in the street there is not automatically a clear understanding of what is involved. Our committee have thought about this problem and one of the suggestions is that we should try to communicate to the public at large the true cost of public expenditure by the publication of some pamphlet or leaflet setting out clearly in simple language the name and description of each public expenditue progamme and its cost to the State.
A more dramatic and effective option might be the regular publication of the true cost of all the services which the State provides. If the local authority tenant, the person receiving mortgage interest tax relief or receiving hospital service benefits knew the true cost as well as the net discounted cost which we all pay, they would clearly understand that the common expression that they are paying a lot of tax and getting nothing for it is simply untrue. The Government must win the active support and co-operation of the public and the public service administration. Public education is vital in that area.
The money being paid out is partly acquired through taxation and partly through borrowing. In 1984 alone the financing of current expenditure arises from the following percentages: 75.7 per cent from tax revenue, 15.4 per cent from borrowing and 8.9 per cent from non-tax revenue. Obviously the huge amount raised in tax revenue is a continuing source of concern to the Minister for Finance and the Government as well as the public at large and we are suggesting that a serious onslaught on whatever inefficiency exists or on lack of cost effectiveness will yield all kinds of results, economic, social and political. The money is spent in a vareity of ways which can also be improved in some cases, but that is not a matter about which the committee are automatically concerned, except to say that it may mean that there will be effectively more money to spend and less need for taxation which, as the Government have clearly outlined, is at maximum levels.
The work of the committee has proceeded satisfactorily over the past 12 months and we are pleased at progress to date. That is not to say that we are by any means satisfied that we have worked hard or long enough, but it is a beginning. One of our first tasks was to set about a methodology for an approach to our work. We adopted a course of action which is set out in detail in our brief annual report. We decided that the committee would operate principally on two levels and that the main emphasis would be on a detailed consideration and evaluation of all major policy areas of public expenditure and the Departments and relevant State-sponsored bodies, judging the expenditure of those bodies on rational and consistent criteria which apply wherever the normal person or private sector institution spends money. There would be systematic evaluation of what a programme is about, whether it is necessary, how best to achieve specific results and monitor and evaluate the expenditure. Secondly, we decided to consider specific expenditure items or policies which would arise in the normal course of our work. These items could be and have been suggested by members of the committee or by members of the public or by other economic commentators. This process has worked quite satisfactorily to date. We have been involved in a very wide span of inquiry during the initial months and there has been a very large volume of inquiries of varying degrees of importance or immediacy embarked on in one form or another. Naturally this involved the committee in many hundreds of contacts with Government Departments and State-sponsored bodies and a flow of corresponsence of one kind or another with private sector organisations and members of the public.
The committee initiated a detailed analysis of key issues affecting all of the Government Departments and the related State-sponsored bodies. A systematic analysis of departmental spending and the structures and processes underlying that expenditure has been embarked upon. We are pleased to be able to report progress on almost all of these inquiries, to have made a number of specific reports already to Dáil Éireann and to be able to say that many of these inquiries embarked upon will be coming to fruition over the next six months.
During that time detailed and intensive assessment of inquiries set in train with Government Departments and agencies will come onstream. This arises from the fact that the general systematic approach we adopted was to devise a standard questionnaire which, if responded to by Departments and State-sponsored bodies, would indicate whether key systems were in place, key values of processes were in operation and if we had a 100 per cent response to that inquiry. The results are being evaluated at present and they indicate where there may be need for urgent examination or review and whether some Departments are more up to date than others.
During this year the committee have met each Tuesday and this has meant that the work programme we set ourselves is largely on target. At this point, I would like to take this opportunity to pay a tribute to the vice-chairman of the committee, Deputy Michael O'Kennedy, and the other members who, given their very busy work schedules, have attended the meetings of the Committee on Public Expenditure on such a regular basis, and the attendance record is available for anyone who wants to see it. Without their collective assistance it would not have been possible to deal with the volume of business which was laid before the committee at these weekly meetings.
I would like to stress that despite all those meetings and all that activity, I have yet to hear a party note struck at any of those meetings. That is a tribute to my colleagues on the committee and augurs well for the value of our work. It also underlines the fact that, as concerned citizens and public representatives, once we have managed to leave this gold fish bowl we are able to get down sensibly and logically to the major work and challenges facing our committee.
Between November 1983 and February last the committee examined the recruitment procedures of the Civil Service Commission and the Local Appointments Commission. The report, which was the first to be laid before the Dáil by this committee, highlighted an unacceptable situation whereby costly competitions were held for thousands of applicants for jobs in the public sector while in some cases the actual numbers of vacancies filled was in single figures. As a result of our recommendations the Minister for the Public Service, Deputy John Boland, decided to curtail the number of civil service competitions planned for 1984 on the basis that successful applicants were already available from earlier competitions. He also accepted other specific recommendations in that report. That was the first obvious example where tangible savings were effected directly from the intervention of the Committee on Public Expenditure.
Our second report was laid before the Dáil last May and was entitled "Proposal to Establish a Centralised State Agency for Persons Registering for Employment or Training". This pointed to the need for immediate rationalisation of the multitude of Government Departments and State agencies involved in overlapping and duplicating in the areas of recruitment, training and employment. The committee felt that there was clearly a need to find out exactly, firstly, what services were being provided by the various institutions under those headings; secondly, what liaison or co-ordination, if any, existed between them; and, thirdly, we were anxious to identify avoidable duplication of those services with a view to eliminating waste in terms of staff and financial resources as a matter of urgency.
The committee took evidence over several meetings from senior officials from the appropriate Departments and I would like to put on record appreciation for the courteous and co-operative manner in which the many officials involved readily provided information on which we based our second report. We confirmed that there was fragmentation, duplication and a lack of co-ordination of services for employment and training and this has led to a waste of public expenditure at the time when, as we all know, there are unprecedented demands on taxpayers and the Exchequer.
The committee's recommendations in the report implied some fairly radical changes and improvements which we felt must be implemented to ensure that the most up to date services are available for people who may be seeking training and employment and that they would be provided in a cost effective manner. We have introduced a mechanism whereby the relevant Department, office or State-sponsored body will after an agreed period have to come back to the committee to report progress on action taken to implement the committee's recommendations, although we do not see it as our job to actually pursue the implementation of recommendations. Our job is to report to the Dáil and it is the job of the Government of the day to take whatever action they deem appropriate. However, we are not merely interested in placing the recommendations in this House, we will be asking what happened to them after a certain period. There were eight specific recommendations on improvements and training in that report and they are available in summary in our annual report.
Earlier this year the committee decided to undertake an investigation into suggestions that the Office of Public Works' present system of acquisition of accommodation for Government Departments and offices was inefficient and wasteful of public expenditure. We heard evidence from senior officials of the Office of Public Works who are directly involved in that area. These officials were extremely co-operative and forthcoming. A detailed report is in the later stages of preparation. I believe it will provide material on which future policy could usefully be based and will result in a more cost efficient way of approaching that problem which this year involves a sum in excess of £100 million. I am subject to correction on this, but I think the budget for the Office of Public Works this year is of the order of £130 million and a fair amount of that money will be spent on the question of leasing versus rental of accommodation.
We also received numerous submissions from organisations and members of the public on matters related to the work of the Committee on Public Expenditure. These submissions are dealt with individually by the committee. This is a fairly slow process. The question raised in those submissions are taken up with the relevant Department or State body, the correspondence is then brought before the committee and is pursued appropriately. If necessary, we invite departmental or other officials to talk to us and answer queries and seek further elaboration from them. The process ensures that the views of the general public on any area of public expenditure will be brought to the attention of the committee and, where appropriate, the concerns expressed in such correspondence will be incorporated in the formal reviews or hearing of evidence when the particular Department or State-sponsored body examination is under way.
The relationship between the officials who come before us and the committee is very important. We have had nothing but goodwill from the people who came to us. In some cases these officials may even have done themselves a disservice by responding with such alacrity to our invitation that they did not have ample opportunity to adequately brief themselves. I want to put on the record that the goodwill of the officials in the Departments is fundamental to the quality of our work. I want to stress that what we are trying to do is to join with them and the Members of this House to improve the quality of public expenditure and their active involvement and co-operation is sought. Any public servant who feels that any act or omission by us disadvantages them from participating in that role could have a word with us, privately if they wish. They would find a ready acceptance of their views. We see our job as helping these officials to improve systems, not to act as an external watchdog hounding recalcitrant people into improvement. The active co-operation of departmental officials is vital and they will find a ready agreement from the committee for any reasonable suggestion they make as to a modus operandi for pursuing queries to mutual advantage.
We depend to a large degree on the goodwill and co-operation of these officials. It is important to state that we are aware that the administrators are implementing policies laid down by Ministers and the Government collectively. Nevertheless there is an onus on the administrators to ensure that all aspects of public expenditure are controlled rigidly in the interests of the public at large. In other words, it is not good enough to say that that is a matter for the Minister or the Government of the day. Surely it would not be suggested that the lack of control, for example, in the area of capital projects is simply the Minister's responsibility. We would probably argue that accounting officers, secretaries of Departments and senior management should take an active role if they have not been doing so — and I am sure they have in many cases — and do everything in their power to ensure that public expenditure is not wasted. I am aware that civil servants are expected to advise Ministers and not simply to wait passively for decisions from above. If they foresee waste of public expenditure or if they believe it is a possibility it is their duty to say this to their Minister. That kind of active involvement and co-operation will lead to good results.
Mention of capital projects brings to mind the fact that the committee have been concerned about major cost overruns on a number of capital projects. Because of the lack of evidence of any real control on capital projects — a frightening statement in itself — it has been decided to establish a sub-committee of our committee to examine this area as a matter of urgency. It is expected that this sub-committee will report back to us within the next two months after which a report will be drawn up and laid before the Dáil. There is significant room for improvement in this area and I hope in due course that will find voice in the report that will come before the Dáil.
The areas we have tried to deal with in the past 12 months are indexed at the back of our report. May I take the liberty of suggesting to other committees that this is a useful device that committees might employ in building up a ready reference for people who may wish to have access to the work of the committees of this House who are doing useful work.
At our request the Department of the Public Service are arranging for the introduction of a system whereby civil servants will be able to convey constructive suggestions on public expenditure to the committee. This type of scheme would complement the suggestions and submissions received from the public during the past year. The purpose is to involve civil servants in working out the proper solutions to the problem. In many cases they are the people on the spot, who know where inefficiencies or deficiencies arise. Their insight and wisdom is extremely valuable and that must be used in an active way for the benefit of all. Accordingly, the moves being considered by the Department of the Public Service at our request are a step in that direction.
Our committee are also working on a proposal to introduce an award scheme with a view to encouraging the submission of original papers or theses on subjects of relevance to the committee's work. Again, this is an attempt to inform and educate the public and to create an understanding about what is implicit in public expenditure.
We have also been considering the question of establishing contact with a voluntary group of people in the private sector who would be willing to give the benefit of their views and expertise on aspects of public expenditure from time to time. I think the value of such an arrangement would be that the committee would have access to the collective opinions and advice of those in the private sector who have practical experience of achieving value for money in the day-to-day operation of their businesses. We hope to clarify the methodology to be used in the very near future and I expect that access to such expert advice will be available early in the new year. The purpose of this is not merely to help us in our work but to afford an opportunity to those in the private sector who regularly lecture us — if I may use that word in the nicest way — on how to run the affairs of State. Our committee will afford an opportunity and an outlet for such initiative, imagination and wisdom. We are considering how best that could be done as, for instance, by way of a sub-committee or an adjunct to our committee, working privately to us and to whom we might refer certain issues. In that context perhaps I should stress that the concerns of Government Departments are very different in nature from the areas of concern to the private sector but there are some similarities in approach and in terms of the systems that would be employed.
During the year we touched on the question of the need for someone to take on responsibility, perhaps on a formal basis, for looking at public expenditure in a systematic way. Whether that would be the Comptroller and Auditor General or the Department of the Public Service is a matter of conjecture but it is an area where there seems to be an omission. I am pleased to say there has been a growing and good liaison with the Committee of Public Accounts. In the beginning there were obviously some difficulties in clearly delineating the terms of reference and ensuring that there was no overlapping or duplication in our work but that was to be expected with the committee in train for only a few months. However, I am pleased to say we have established a liaison with that committee on a regular basis. Regular meetings of an informal nature take place between the chairman of that committee and myself. The earlier difficulties have been eradicated and we are working jointly to ensure that the terms of reference of our respective committees are being pursued. That work will be of use to the House and to the country in due course.
I am also pleased to say that the committee have already established contacts with a number of similar committees in the EEC and in other countries. The value of such contacts will be that we can learn from an exchange of views of what steps are being taken to control public expenditure in those countries, what systems they have employed and how we could benefit from work they have done where there might be similarities of approach and where there could be lessons we might learn. That dialogue is useful and could lead to significant efficiencies in our own work instead of forcing us in some cases to re-invent the wheel every time we want to have an investigation.
The spirit in which the committee have pursued their work has been in all cases to assert our desire to help and, in conjunction and co-operation with public servants, to bring about whatever improvements may be possible. We believe it is vital to have the active support and co-operation of the public service and I should like to place on record our most grateful appreciation of the co-operation and courtesy which has been extended to us by all of those members of the public service with whom contact has been made in the past year. That spirit augurs well for the future work and reports of this committee.
The question of relationships is a matter to which we shall be giving our attention. It does not mean that there will not be differences of opinion about the recommendations in our reports. In fact, I would be very concerned if I found that reports from our committee were universally acclaimed by all Government Departments and State-sponsored bodies. I would think that perhaps we had been doing something wrong. At the same time, it is important to ensure there is mutual respect and that is a principle we shall be pursuing. So far we have got nothing but co-operation from such people and it augurs well for the future. On behalf of the committee I should like to pay tribute to the clerk to the committee, Mr. Paddy Judge——
I realise that when we were dealing with the other motion this morning mention was made of officials who are civil servants. Wisdom indicates that it is preferable not to mention civil servants in the House, whether in a complimentary or derogatory way — lest they might become the subject of controversy in the House. That would be undesirable and not in keeping with the traditions of the House.
While respecting what the Chair has said, I agree with the chairman of the committee.
I respect what the Chair has said. One of the problems we have come across in our work is the question of morale in the public service, of people who do not have clear targets or goals and who see no ready response for extraordinary achievement or outstanding effort, the corollary being that there is no particular sanction imposed if they do not do their job. It is a symptom of that that apparently we are disposed not even to refer to official work. In itself that is a problem. These men and women are entitled to credit and to reward where it is due and to be dealt with in the opposite way when that is due. Until such time as we can show public servants that we do not see them simply as robots in the way they do their work but as human beings with rights and obligations we will have a problem.
Our committee can do a lot of work. I want to put in this caveat or marker at this stage. I am not sure that we are adequately staffed or have the resources to do so bearing in mind the extraordinary span of our work. At this point I am not asking for more staff. Basically we are trying to undertake an enormous volume of work with a staff of three people. That imposes its own constraints. I am not complaining at this stage.
We have made a reasonable start. We intend to pursue our work with vigour and we hope the results will be of use and benefit to the House, the Government and the country at large. I should like to thank everybody who has made our work a pleasure thus far.
There will not be many points of controversy if any at all between the chairman and myself in our comments on this report. As he indicated during the course of a very objective and detailed address, that has been the basis on which all of us on the committee have approached our task as public representatives and as delegates from this House trying to discharge the responsibilities which Members of Parliament have.
The Chairman touched on the first point I want to make. We have had the experience, if only on a preliminary basis, of the operations of similar committees in other countries. While we are pleased with the progress we have been able to make, it is quite clear that Committees on Public Expenditure scrutiny, or control, or review in any other country in the EEC have very much more authority, power and functions than we enjoy at the moment. Perhaps that is understandable in view of the fact that we have been established for a little over a year only.
If we as Members of Parliament are to develop that role as effectively as we should, and not just as rubber stamps on odd occasions here, on budget votes or matters of that kind, when we all go predictably one way or the other on such matters as food subsidies, we must develop this committee and committees like it to a greater extent. I understand why the chairman is not looking for extra staff at this stage. Those of us who serve on these committees should be given such extra support as we require. There is a glaring difference between the Opposition and Ministers who have available to them the resources of their Departments, scriptwriters, advisers, experts and personal constituency officers. I am not moaning. There is a difference between a Minister in that position and a spokesman for the Opposition serving on these committees.
I have one full-time clerk-typist. I recruit another from my own resources. With an even-handed approach we must have sufficient support to enable public representatives to do what all of us want to do, that is, to develop the committee system. This work should not be in conflict with the other roles or obligations which we have. I was scribbling in my office for the past hour-and-a-half trying to prepare for this very important debate. That is not the way it should be. We should all have available to us experts, research advisers and scriptwriters. This would enable Deputies, like Ministers, to have a script prepared to be handed out to the press. Until such time as we get that, the committee system, which I believe is a great new beginning — and I acknowledge that it was introduced by the Minister, Deputy Bruton — will never develop to the point we all desire. That would be a matter of great regret.
I am not pleading for extra staff for the committee — we have been able to call on assistance from time to time — but for a recognition that extra resources are necessary for Members of the House to enable them to discharge their role on all the new committees which are emerging and to ensure that when we are at committee meetings someone else will be attending to other business.
The chairman is right. We met in plenary session for three hours at least each week and in sub-committee sessions for another two or three hours perhaps. We have various consultations with people who were preparing reports for us, sometimes over lunch. Today there is some such arrangement and the chairman will have to leave the House. Unfortunately I will not be able to attend.
The whole thing is time-consuming. None of us wants in any way to compromise the very important role of those committees by not having the time or the services. At the moment we are being stretched to the limit. I hope that in everything that is planned in terms of the development of the committees it will not be just a case of saying we must have more staff. We must also recognise the reality that the members of the Government can call on 150, 200 or 250 people to advise them, to prepare documents and whatever else is required, and also to do constituency work. Members on the other side of the House have not got that balance. Unless we get it, the committee system is at risk of not developing.
I represented the committee at a meeting of Committees on Public Expenditure in Rome which was initiated at the instigation of the Italian Chamber of Deputies. It was quite clear from the discussions we had there that in other parliaments they see the role of the committees as of vital importance. There is not a notion that we represent the public service in the same way as there is sometimes the notion that the public service represent Ministers. Here there is an opportunity for Deputies in a very reasoned manner to question, to tease out and to criticise, if necessary, actions taken at executive level, or expenditure incurred in the course of administration, or as a consequence of a political decision. It is vitally important that we insist that that should continue.
I want to make three or four general points before dealing with some specifics which will illustrate the nature of the work we have undertaken. One of the significant things to emerge in general terms is that for the first time we have a contact point between the public service and Members of Parliament. We have an opportunity to meet them face to face and question the basis of advice they have given, to question whether the proposals or procedures they pursue are in the best interests of the control of public expenditure, in terms of leasing office accommodation, or the preparation of a prison development programme.
For the first time we can now actually meet these people man to man, face to face, flesh to flesh so to speak, instead of the faceless bureaucracy which has in a sense been sheltering behind the Minister in his corporate role. That is not a healthy way for democracy to function — that we could not get to the people who made recommendations to Ministers, if not decisions. Meeting these people has been a development welcomed in this committee, not just by us but unless I am mistaken by a great majority of the public servants.
It is not just a question of our having the opportunity of criticising the public service. Equally, what we must encourage in this committee is that public servants would, in a very healthy and outspoken way, also tell us where we, because of our political pressures or response to political moods, create conditions that they find incur extra public expenditure over and above what they would normally recommend. I hope that we are beginning to recognise that it is a two way process. There have been already some examples from our committee. Sometimes we may be criticising the public service for undue expenditure and sometimes they can point to the fact that it may have been political decisions perhaps, in the best sense of political, that have given rise to an overrun on proposals which they had made.
What is emerging from all this is that we are all not just concerned about the amount of money being spent but are particularly concerned — as the public servants are — about the quality of the service for the money that is spent. Understandably, having regard to the growth of public expenditure a feeling is rapidly growing abroad that the only focus should be on the amount of the public expenditure programme. What we have attempted to do, and this will emerge very clearly for those who have had the time to read our various reports, is to look at the quality of the service, particularly where there are overlaps, and there are many; where there is duplication, and there is very much; where there are unnecessary and inappropriate structures, and there is much example of that.
We must recognise that this is not just an opportunity to attack civil servants or public servants. That would be a great mistake. Rather is it an opportunity to give to those who serve in the public service a challenge, a climate and a role that will make their work more meaningful, their jobs more satisfying and in turn evoke from the public perhaps a healthier attitude to the public service. Up to the moment it must be said that there is a tendency outside to look on all civil servants as living in a cold, dispassionate, unconcerned climate and sheltering behind the Minister in every sense, cloaking and concealing their own responsibilities behind those of the Minister. What we are entering on here is a beginning, at least, of a change of that pattern which has existed for some considerable time.
I welcome this whole general development. I would break down into two separate categories the issues we have been considering over the last 12 months. In the first we could clearly identify areas where in the normal course of administration or, if one wished to put it another way, in the course of bureacratic management, there have been cost overruns that would not be normally a matter of which the Minister of a particular Department would be aware—and I am not speaking about any particular Government here — but nonetheless of which he as manager with first responsibility should be aware. There have been numerous examples of that. I am talking here about management decisions within the Civil Service incurring great cost overruns. For instance, there is the question of office accommodation in the Office of Public Works. It is clear that the procedures applied have been applied by that office over a considerable time. I do not suggest that those who have had responsibility as Ministers for, or Ministers of State for, Finance have sheltered from their responsibilities but this area is one in which the practices and procedures of the Office of Public Works have cost the State a very considerable amount of money. The second example is in relation to telephones, although that now is the responsibility of Bord Telecom Éireann. Having listened to the officials from the Department of Posts and Telegraphs, we hope what has been said by them will be taken on board by the new Department.
We have seen examples in the committee where there have been very major losses to the Department, frankly because of the reallocation of personnel from one section to another. We have seen losses in 1982, for example losses from the public telephone kiosks as great as £1.9 million out of a total of £7.6 million, with receipts at £5.7 million. That shortfall is unaccounted for because of reallocation of personnel due to what may be seen as the public service embargo, or other factors. That kind of money which should be coming into the public purse is, in fact, unaccounted for and lost to it.
With regard to the Civil Service Commission, of which Deputy Coveney is a very constant and active member, it was not until such time as our committee actually decided to inquire into it, that the absolute necessity for all the interviews, examinations, arrangements and programmes for recruitment into the public service as carried out over the last number of years was questioned, having regard to circumstances in recent time. These appear to be administrative decisions. There have also been consequences of political decisions and in those situations it is not the public servants who should have to come before our committee, but rather the Ministers who are responsible at any particular time, now or in the future, who should be questioned as to why certain cost overruns have arisen.
The prison development programme had got much publicity for what was given as £12.4 million spent on consultancy fees for paper prisons, as somebody said. It was not the officials of the Department of Justice who cancelled the prison development programme, it was the Government and the Minister for Finance. I am not sure if it was the Minister present in the House, but he would be fairly familiar with the matter, who decided in the Government cutbacks to cancel the programmes already sanctioned at an earlier stage. If we find that £12.4 million expenditure, why should it be the officials of a Department who acted on the instructions of the Minister of the day who should explain to our committee and acknowledge such expenditure on site preparation and consultancy fees when, overhead, the Minister decides to cutback that four point prison development programme, at least for the moment? In my view, it is sorely needed. The moneys so far spent will, to some extent, be wasted.
We have mentioned decentralisation already. Very considerable sums were expended in consultancy fees. We have not got conclusions on this and I mention it as an example. Very considerable sums were spent on consultancy, site acquisition and so on, and when a further decision is taken to cancel all of that I hope it will not be the public servants who will be blamed for that wasteful expenditure for buildings which never surfaced in the final analysis.
I come to an issue which I am glad to have an opportunity of addressing for the first time in the House to the Minister responsible: the strategy for foreign borrowing which gives rise, whatever way it works, either to a reduction of interest charges or capital repayments, or as in this year a very considerable increase in the burden which the taxpayer to whom we are accountable in this House must meet. That is a decision for which the Minister for Finance at any one time is responsible and it seems that in that kind of area the Minister for Finance should be answerable, not the representatives, unless and until it appears that the representatives themselves will take these decisions without any reference to the Minister for Finance, which, of course, if not the case. I will come back to deal with these in detail.
I said that I had a slight difference with the chairman but I do not want to embarrass him and I hope we will continue on the basis that we have always had. I agree with the chairman that we have had nothing but co-operation in the appropriate was from almost every Department. There will always be a healthy conflict between the Executive and the Legislature, between civil servants and public representatives. Subject to that, in almost every area we have got the co-operation that we expect. However, there is one major exception and I am not going to conceal the fact that that exception is the Minister at present in the House, not the Minister for the Public Service but the Minister for Finance and his Department. I express a personal opinion, but let me say, an opinion I now propose to support by facts. I would like to refer to two examples which emerged from the report that we have published here. The first was in March of this year and it was not this Deputy who presented it though I was raising that issue at the time. On 13 March this committee sought the views of the Department of Finance in relation to what was called the black hole problem at the time, and the members of the committee were unanimous in the view that we should have an explanation from the Department of Finance to the committee. That was repeated on 23 March, and then on 14 April, as far as I can recall, the item was deferred, put off our agenda. The Minister and the Department of Finance — in this instance the Minister, who will not occupy that seat forever — took the view that it was none of our business.
Read your terms of office.
I will, and you can see now the modesty of the Minister.
You are wrong. I have not had——
It was none of our business. I will be wrong in something else as well. We were all wrong, except, of course the Minister who is not normally wrong in any event. I suppose I should read the terms of reference also in relation to the question of the borrowing programme.
Hear, hear.
They raised a section in the Department of Finance of civil servants like any others whom we have asked to come before us, who engage in analysis of the range of loans available to us across the international banking scene. Experts, yes; experienced, yes, and who eventually get into the queue for loans from Germany, the US, Japan, Switzerland or wherever else, and who in turn finally recommend to the Minister of the day the loans that he should draw down. Of course, it is also for a Minister to take a decision that, having regard to currency trends as he sees them, he will advise or direct those officials to seek the preponderance of loans in the particular denominations, in this instance the $US, and if they get some such direction they will follow it up. We can all have the benefit of hindsight. Surely if the consequence of decisions to switch to the $US out of the mix of currencies from which we have traditionally borrowed — the Deutsche Mark, the guilder, the Swiss franc, which is not within the EMS, and even the Japanese yen — is an extra impact on public expenditure which gave rise to the need to cut food subsidies to the order of £140 million we as a committee, this House as a House, if we have any relevance are entitled to have either those officials, like any other officials come before us or this Minister, like any other Minister, come before us? I do not mean just the Minister today because these things have a habit of changing, I mean the Minister for Finance.
I have said over the last 12 months that this is one area over which the Members of Parliament have no control. Yes, we have to vote on budgets, and we vote in a predictable way; we pass taxes, and we vote in a predictable way; but we have no role here to scrutinise, question or review the borrowing strategy of the Minister for Finance or his Department. If this Minister will look again he will be aware that not quite two months ago he would have received the first notification of the fact that our committee would like to have an opportunity of having the views of the Minister or his officials. That was 18 September. The dialogue commenced on the part of the Minister, and to this day we have heard nothing from that Minister formally in relation to it. When the Minister read the report of the committee as reported in the media he was not slow then to take up correspondence in The Irish Times in which we could still be engaging publicly.
On a point of order — or I am not sure if it is a point of order — the correspondence which the Deputy and I have enjoyed in The Irish Times has illuminated people, including the Deputy, but it is not in response to the publication of this committee's report. I will deal with the rest of the ridiculous allegations when I make my reply.
Obviously the Minister's memory is affected. In the course of the correspondence he referred to comments made by me at the Committee on Public Expenditure. I am really amazed that he does not recall that.
I have no problem about recalling that. It has nothing to do with the publication of that report.
The report at paragraph 8.5 states that the committee are considering the question of foreign borrowing in $US and the effect on the level of interest paid in the light of the strength of the dollar vis-à-vis the punt and that the committee's views will be taken up with the Minister for Finance. However, we have not heard from the Minister for Finance. Apparently the Minister for Finance will see that he and his officials are above scrutiny or sanction. I make the point that the Minister for Finance is no different from any other Minister and the officials of his Department are no different from any other officials, particularly when as a consequence of decisions taken by the Minister for Finance it is clear that the extra cost to the taxpayer in terms of extra public expenditure has an enormous impact.
I should like to give a case in point. Since December 1982 our currency has depreciated against the dollar to the point where we are now at parity although at that time our punt was worth $1.38. That represents a major depreciation. Within the same period such depreciation as has emerged against the EMS currencies, be they the Deutsche mark or the Dutch guilder, which we have borrowed regularly, maintaining a mix, has been as a consequence of the decisions of the Minister for Finance to devalue our currency within the EMS. The market rates would otherwise be the same as they were two years ago were it not for that decision which I opposed at that time.
The reality is that the repayment costs on loans when they are due, judging by present trends, will be considerably more in respect of dollar borrowings than they would be in respect of Deutsche marks or guilders, or Swiss francs. The interest rates in the currencies concerned are also a matter of considerable interest here. At the moment the interest rates in the Deutsche Mark or guilder are roughly of the order of 5½ per cent and have been for some considerable time. That means that the loans we have in those currencies are subject to interest at those levels in contrast to the fluctuating interest rates of the dollar, which are very much higher. We can argue until the cows come home as to whether they will be lower or higher from now on but there are many within the US treasury who think they will be higher. It is for that reason that I felt, like others, that such decisions taken by a Minister on the advice of a section in his Department which can for better or worse give rise to major cost overruns or, for better, give rise to savings, should be amenable to discussion and scrutiny either in the House or by a committee. The Committee on Public Expenditure would be the appropriate committee.
It is not in the terms of reference of the committee.
It is not in our terms of reference. Obviously, the Minister has reached his decision. It is a wonder that he did not have the courtesy to reply to our letter and tell us that. Who does the Minister think he is? Having ignored us for six weeks the Minister can now coldly tell us that this is not in our terms of reference.
The Deputy should speak to the chairman of the committee occasionally before he makes allegations like that and gets himself out on a limb.
I have spoken to the chairman and I am aware that he has had informal discussions with the Minister, and that the Minister had informal discussions with him. I am also aware that the clerk of the committee on our behalf wrote to the Minister's Department and that we did not get the information requested. If the Minister wishes to deny that he may. If the Minister says that this is not within our terms of reference we should consider whether to ask the Minister for Finance if we have any functions in any other areas if he is to be the person who determines that.
It is this House that determines the terms of reference. The Deputy is getting around the issue by making that kind of remark.
I must point out to the Minister that at the time control of public expenditure in all its forms and the review of public expenditure in all its forms was clearly and specifically included by his colleague, Minister Bruton — I happen to agree with that Minister — when he set out our terms of reference. If the Minister tells us that the growth of the interest charges or capital repayments when they come are not a matter of public expenditure I want to know what in the name of heavens they are. Will we be confined to asking questions of individuals who may have responsibility for relatively small sums but when we get into the billions — we are all concerned about the growth in the borrowing level — we do not have any role? I do not accept that and I do not believe our committee does. If that is to be the case in future it should be made clear to us now.
If there are to be explantions we should be told now. If there are to be justifications the public should be made aware of them now. If it is to be a consequence of matters over which we do not have any control let it be known. That should be fully aired and discussed because this will not affect just this administration. It will affect every administration. I believe in the supremacy of the House, irrespective of which side we sit on from time to time. I know it may often be uncomfortable for the Executive of the time being, or the Minister of the time being, to have to answer such questions but I do not accept that any Minister can decide for himself what is or is not within our terms of reference. That is why I made a significant exception when the chairman said we had got co-operation all round. The clear and significant exception was the Minister and the Department of Finance in the areas I referred to. I hope the Minister will follow the example of other Ministers when he considers how he should respond to me.
I should like to refer to some of the matters the committee has been able to bring before the public. I must acknowledge the excellence of the report of the Comptroller and Auditor General. It was as a result of that that we were able to explore matters in great detail. It is not a matter for political decision as distinct from administrative procedures. One of the matters we dealt with was the level of our contribution to the European Community. The options for contributions to the EC exist in either of two systems. The first is the basis of our VAT returns, adjusted from the data produced by the Central Statistics Office. The GNP data is the other system. I must acknowledge at this stage that the Revenue Commissioners appeared before the committee. I should like to thank them for the views they expressed on the occasion of their visit. The Revenue Commissioners stated that the GNP data would be less reliable due to inadequate micro-economic information. In all other member states it is the GNP data which is the base of the contribution to the EC budget. In our country alone we use VAT returns, adjusted from data from the Central Statistics Office, as the basis.
It is clear that in one year, 1981, and, possibly, in subsequent years — we got figures for only 1981 and, perhaps, in this area there is scope for further co-operation and consultation between the committee, the Revenue Commissioners or the Department of Finance — the estimated extra cost to the Exchequer as a consequence of the system of contribution we use, VAT returns adjusted from Central Statistics Office data, was of the order of £17.8 million.
On a point of order, I should like to state that the debate on this report will end within a short time. I have listened to the chairman, and vice-chairman of the committee, make Finance Bill Second Stage speeches but some of us who are anxious to contribute to the report under discussion need only five minutes. Is it possible that we will be given that amount of time? There is little point in the Members who compiled the report hogging the debate in this way.
The maximum amount of time for the debate is three hours.
I will not detain the House much longer. I doubt if what the Deputy has raised is a point of order.
Debate adjourned.