Ordnance Survey Ireland Bill, 2001: Second Stage.
Minister of State at the Department of Finance (Mr. Cullen): I move: "That the Bill be now read a Second Time."
At present, the Ordnance Survey, or OSI, is a Civil Service office under the aegis of the Minister for Finance. The primary purpose of this Bill is to set up the OSI as a State body outside the Civil Service. This will enable the OSI to have the freedom to operate with a more commercial focus, subject to appropriate controls. The main role of the OSI will continue to be that of operating in the public interest by creating and maintaining the definitive mapping and geographic records of the State. Accordingly, a key provision in the Bill is that the OSI will be required to provide for the State specific services to high standards of quality in return for a subvention from the Exchequer.
It is worth recalling that the Ordnance Survey has a long and illustrious history of providing a mapping service to the State. The Ordnance Survey or, as it is more colloquially known, "The Survey" was established in 1824 as a centralised agency to provide mapping for the State. No organisation is static and the role of the Ordnance Survey has changed greatly since its foundation. From the early 20th century its role in support of Government services developed still further as mapping became an increasingly important prerequisite for land valuation, land registration and asset recording for local authorities and utilities. Today the products and services offered by the Ordnance Survey extend to the commercial sector and the unprecedented prosperity achieved under this Administration's stewardship of the economy has also been accompanied by a large increase in commercial demand for the products and services produced by the OSI.
The way the OSI operates has changed dramatically in the most recent decades; within the past 20 years map-making has been transformed from a hand-written activity to a digital process which employs the most advanced information technology. As a result, all maps in the Ordnance Survey are now stored digitally rather than in paper form. This means, for example, that customers who call to OSI headquarters or OSI agents can get within minutes a specially printed map for anywhere in Ireland which meets their requirements.
The advent of cheaper and more efficient technology has also led to the emergence of geographic information systems or GIS. In plain terms, GIS combines map data with computer software to produce a powerful tool for analysing information or for providing services more efficiently. GIS is now an important part of the information society and there are hundreds of companies throughout the world producing thousands of GIS products.
Among the myriad ways in which GIS can be used by the commercial sector is to link customer data with map data to identify new business opportunities and to plan delivery routes more efficiently. In the public sector, examples of the application of GIS are to pinpoint the incidence of various diseases and the efficient planning of waste collection. These new applications have considerably broadened the customer base for mapping data and the prospects are that the demand for new and improved products and services derived from these data will continue to grow strongly for a long time to come.
It is against this changing background that the Government came to the conclusion that the restrictions imposed by its Civil Service status limit the OSI's capacity to meet its customers' demands and to exploit new opportunities in the marketplace. Hence the necessity to bring forward this Bill to transform Ordnance Survey Ireland into a separate State body with a strong commercial remit.
This conclusion has been validated by the findings of the interim board of the OSI. In June 1997, the outgoing Government agreed to a proposal by the Minister for Finance to establish an interim board to advise the Minister for Finance on, and oversee, the transition of OSI to a more commercial organisation. In April 1998, the interim board set out in a report its vision for the future of OSI. It suggested that OSI has considerable scope to develop the market for its products and to reduce the size of the State subvention. The interim board concluded that the fundamental organisational change needed for OSI to fulfil adequately its public service responsibilities and to anticipate wider customer demands in the future would be difficult, if not impossible, to achieve within the Civil Service.
The interim board reflects a wide range of users of OSI products and of other interest groups, including employer and employee groups. It is headed by Mr. Kevin Bonner, former Secretary General of the Department of Enterprise, Trade and Employment. The other members are representatives of the wholesale book sellers trade, the Irish Mountaineering Council, chartered surveyors, local authorities, IBEC and ICTU. I take the opportunity in this House to compliment the chairperson, Mr. Bonner, and the other members of the interim board on the excellent work they have done to date.
A further reason for this Bill is to rectify the existing unsatisfactory situation where, despite its 177 year existence, there is no primary legislation governing the OSI. All previous legislation, particularly the 19th century statutes, refer specifically to boundary survey work which is more relevant to the chief boundary surveyor who is, and who will remain, attached to the Val uation Office. This Bill will rectify this situation and allow OSI to carry out its functions based on a sound legislative framework.
At the beginning of my speech I referred to the role of the new body. I want to deal with this subject in more detail because it is important to emphasise that, despite the change envisaged in its status under this Bill, OSI will continue – as it has done so effectively for the past 177 years – to fulfil its traditional role of providing mapping services for the administrative, legislative, infrastructural and other needs of the State. At present, this role falls into four main operational categories – the updating and maintenance of the framework on which national mapping is based and on which very many industries such as construction, surveying, transport and air navigation depend; a programme to complete a new mapping infrastructure for rural Ireland in the short-term; an ongoing maintenance and development programme to ensure that urban, rural and tourist and leisure mapping databases are up to date and a developing marketing and sales function to ensure that products and services are suitably developed to meet the ongoing and anticipated needs of public and private customers.
The Bill provides that the general function of OSI will continue to be to provide the national mapping service in the State and that it will operate in the public interest by creating and maintaining the definitive maps and geographical information of the State. The Bill sets out, for the first time, a detailed listing of the tasks that are necessary for OSI to fulfil its public interest role. Accordingly, for example, OSI will be required to continue to map all areas of the country, including those which do not provide a commercial return on this activity.
Notwithstanding the more commercial focus for OSI provided for in the Bill, OSI will continue to need a substantial subvention from the Exchequer in order to enable it to carry out all its tasks in fulfilling its general functions and provide a quality service to the State. On this issue, the interim board examined what the financial position of OSI would be if it were to become a stand alone commercial body. The conclusion of the examination was that, on the basis of the revenues then being generated, OSI costs would be such as to leave an annual deficit for the foreseeable future of considerably more than half of its revenues.
Another important feature of the Bill is that the amount and the terms and conditions attaching to the advance of funds from the Exchequer will be set out in a service agreement between OSI and the Minister for Finance. The service agreement will set out in detail the range of activities OSI will carry out in the public interest and will, among other things, contain a description of each such activity, the justification for and benefits arising from the activity, details of the deliverables to be provided by OSI – including details of the standard and quality required, and the amount of the funding to be allocated to each of the individual activities. An important benefit of the service agreement is that, in clearly identifying the public interest element in mapping, it will also help ensure that there is no cross subsidisation from the public purse of any of OSI's commercial activities.
The Bill provides that the service agreement between the Minister for Finance and OSI may contain terms and conditions in relation to the pricing of products. It is envisaged that OSI's pricing policy will adhere to the principle of ensuring that the optimum use is made of their products and services by all sectors of Irish society, both public and private.
The Bill provides that OSI, when engaging in commercial activity, may do so through subsidiary companies with limited liability set up under the Companies Acts, 1963 to 1999. Any capital necessary for such companies will not come from the public purse. Instead, it will be raised in the marketplace on the basis of the commercial merits of the project concerned. In short, there will be no cross subsidisation of commercial activity from the Exchequer, in respect of either capital or running costs.
Measures to ensure that there is no cross subsidisation by the Exchequer of potential commercial activity by OSI are an important feature of the Bill. These include clear statements of the OSI's public interest functions, the requirement for a service agreement with the Minister for Finance to deliver specified public interest outputs in return for Exchequer money and provisions to establish separate limited companies which will operate on a purely commercial basis for any commercial activity. In addition, OSI will operate transparent accounting practices to identify commercial activities and separate them from non-commercial activities and will also implement a fair and transparent pricing policy which will ensure that OSI's basic data are available to competitors in the marketplace on the same terms and conditions as to its subsidiaries.
I will now speak about the considerable investment that has already been made by OSI to prepare itself for its future as a more commercially focused entity outside the Civil Service. I have already referred to OSI's use of leading edge technology. This has been made possible by the substantial sums which have been allocated to OSI in recent years to ensure that it uses the most up to date techniques in map production. For example, OSI is leading the way in the use of satellite positioning and is currently in the process of implementing a network of permanently operating global positioning system receivers for the country. This system is expected to be operational by early next year and will be controlled from a central computer in OSI headquarters. Similarly, OSI has a very advanced in-house geographic information system that is used, not only to store all collected digital mapping data but also for the supply, editing and management of data. It is anticipated that supplying GIS users with digital mapping products will be a major area of business growth.
While OSI has invested considerable resources in technology, it has not neglected also to invest in its major resource, its staff. The training of staff in the new technology has been under way for many years. On the management front, the Minister for Finance has sanctioned a number of new managerial posts in anticipation of the move from the Civil Service. These include appointing heads of human resources, corporate services, marketing and IT.
I will now turn to the staffing arrangements for the new body given that it will be operating outside the Civil Service. It is envisaged that all staff currently employed by the Ordnance Survey will transfer to the new body on establishment day. There are standard but important provisions in the Bill which guarantee that the tenure, pay scales and other terms and conditions of employment, including superannuation benefits, of the OSI staff will continue to apply to them in the new body.
Debate adjourned.