Vol. 396 No. 7
19 Mr. J. Bruton asked the Minister for Tourism and Transport if his attention has been drawn to the fact that the European Court of Auditors have stated in their recent annual report that their inquiry showed no demonstrable link between the receipt of EC funds and higher spending on transport infrastructure in Ireland; whether he accepts these findings; and if he is adopting any measures to deal with the situation in light of these allegations.
I should point out that control over the particular EC transport infrastructure funds dealt with in the EC Court of Auditors report to which the Deputy has referred has been exercised by the Minister for Finance and the Minister for the Environment, who have both answered similar questions from the Deputy in recent weeks. As regards transport infrastructure grants, successive Transport Councils of Ministers have considered proposals for a definitive transport infrastructure fund together with a multi-annual programme of measures for assistance, but to date the Council has not reached agreement on these proposals. Instead, since 1982 special infrastructure grants totalling approximately £300 million have been allocated on an ad hoc basis from the Community budget towards road and rail projects on the European networks. Ireland has received about £13.7 million for six projects on the Euroroute 01 which runs from Rosslare to Belfast.
Regarding the manner in which these grants are controlled, the situation is that the public capital programme is determined each year taking account of the amounts likely to be received from the European Regional Development Fund and also the separate transport infrastructure grants. In the absence of these amounts, the total of the public capital programme would have to be reduced correspondingly. The EC aid received, therefore, is retained on a recoupment basis, by the Exchequer, for that which has been made available through the public capital programme. The Minister for Finance explained this procedure on his recent response to a question from the Deputy and pointed out that the observations of the European Court of Auditors did not take this procedure into account. He did not agree that the link between the Community aid and the particular projects aided was not evident and he said he did not propose to change the procedures.
Would the Minister agree that the State and the EC made equal contributions to the road fund in 1989, £53 million from the State and £53 million from the EC, and that by 1993 the State's share of the contribution is due to be reduced to £40 million despite the fact that the EC's share of the contribution will go up to £156 million? In other words, there is a planned shortfall of £116 million based on 1989 contributions. Is it not a fact that as EC contributions go up our own contribution is going down, and that the observation of the EC Court of Auditors is correct in relation to Ireland?
No, it is not. The Deputy is confusing two things. The Court of Auditors are talking about a reasonably technical mechanism. The £13.7 million we received from the Community came, in the first instance, from the Department of Finance and a similar amount was then expended by the Department of the Environment on the Rosslare to Belfast Euroroute. In other countries it does not work like that. In other countries there is, perhaps, more transparency about the matter, but we are not trying to hide anything here. The funds we take from the Community come from Finance and similar figures subsequently surface in the Department carrying out the expenditure, in this case, the Environment. It is our view that the auditors failed to understand that particular procedure.
Did the auditors, in the course of preparing the report in which they have condemned Ireland, question officials of the Minister's Department about this practice?
I cannot confirm that there were discussions with my Department but I will have to communicate with him.
Did the Department make any communication to the Court of Auditors when they were aware that this matter was under scrutiny? If not, have the Department made any communication to the Court of Auditors since?
The Deputy has to understand, and I am sure he does, that this is primarily a matter for the Department of Finance and the Minister for Finance, and it would be more appropriate for all such discussions and representations to take place between the Department of Finance and the Court of Auditors.
For good or ill, the Minister is answering this question here and has accepted it as relevant. It is not sufficient that he should hide behind an absent Minister to hide his inability to answer simple factual questions. It is a disgrace that he is unable to answer this question. Would the Minister not agree that it is a very grave matter in view of the extent to which this country depends on EC funds, if we are found by the supreme body concerned with the proper expenditure of EC money, namely the EC Court of Auditors, to be in breach of EC rules? Would the Minister not agree that it is simply not good enough for him to reject, with the wave of the hand, an EC finding of this seriousness and be unable to say whether he has even made representations after the event about the matter?
I think the Deputy is greatly exaggerating the situation. He knows full well, as a former Finance Minister, that these matters are dealt with very efficiently by senior officials in the Department of Finance and their counterparts in the Commission. There are regular discussions about all these matters between those Departments. I am not hiding behind the Minister for Finance. I am simply leaving to the Minsiter for Finance his statutory responsibility in this area.
We have not been found to be in breach. The European Court of Auditors have commented that they could not find a demonstrable link between the funds and the spending on transport infrastructure. That is not the same thing as breaching Community rules. I want to reject completely the Deputy's suggestion, hidden in his comments, that there is anything to hide here. There is nothing to hide. The funds in the Irish circumstances come to the Department of Finance and are subsequently expended by the sponsoring Department. That is not the way it works in other countries. I have no doubt that the Department of Finance are discussing that matter on a regular basis.
The fact is that the Minister was unable to convince the Court of Auditors and they found against the Irish Government.
Would the Minister not agree that the EC treaties, to which Ireland is party, established the European Court of Auditors as the proper auditing body of EC funds and that they have commented adversely against Ireland regarding the lack of linkage shown between moneys given for specific projects and their use for those projects? Would the Minister not agree that the EC Court of Auditors and the EC are entitled to require, and do require, that funds allocated by them for a specific project should be used specifically for that project and that what the State has been doing is putting all these funds into a hotch-potch operation and has not shown that the money was specifically spent on the project for which it was sought and given?
The Deputy and Deputy Bruton have been extraordinarily selective in their quotations from the report. Let me draw their attention to a comment in the report which says "this does not mean that projects approved by the Council for financial support have not been implemented". Let me also draw their attention to the part of the report which says "the Court found that in the case of Germany, Ireland and the UK, there was no demonstrable link". Having said there was no demonstrable link, they then went on to point out that that did not mean the projects were not properly implemented. It was simply a comment by the Court of Auditors that these three countries, Ireland particularly, have a separate procedure, and I have no doubt that the Department of Finance will in their ongoing discussions with the Court of Auditors seek to satisfy the Court of Auditors about these procedures.
