Dinny McGinley
Ceist:6 Mr. McGinley asked the Minister for Finance if modifications in the decentralisation programme announced in budget 2004 are being considered by his Department for presentation to the Cabinet sub-committee. [24600/04]
Other Questions.
Decentralisation Programme.
The Government is determined to press ahead with the implementation of the decentralisation programme announced last December. Considerable progress has already been made and the latest figures from the central applications facility show there is very substantial interest in the programme within the public service. My Department is not considering any modifications in the decentralisation programme for presentation to the Cabinet sub-committee on decentralisation. The next significant milestone in the process will be a report by the implementation group later in the autumn to the Cabinet sub-committee outlining the group's views on sequencing and timing.
I wish to ask the Minister for his response to some of the issues that have arisen in the Oireachtas hearings on these matters, since he says there will be no modification. Is he aware that in 17 out of the 30 agencies it is proposed to move, less than five individuals have offered to move and that in some cases there is a 100% meltdown of the key strategic skill base, that none of those in key strategic areas, such as the probation office, is moving? What is his reaction to the statement by the National Roads Authority that if it moved, as is proposed, its capacity to do its job would be seriously undermined? It came as a shock to me to learn the decentralisation programme was decided without any Government memorandum, strategy statement, human resource plan, or individual assessment of the business cases of each of the different agencies being moved.
The Deputy asked if I am considering modifications. I am not considering any modifications. The implementation group has come before the joint committee and has outlined the progress to date. This is a rolling programme. What has to happen next is to identify who will come forward in the first tranche. That will be based on the sequence and timing which will be advised and suggested by the implementation group. The Deputy must recognise the implementation group has been given the job. We will proceed on the basis of the decisions which have been taken. The best way of assessing and monitoring progress is based on the implementation group's reports coming forward.
Is the Minister aware that the chairman of the implementation group said to the joint committee that some of these proposals are not implementable? Is he aware that on the occasion of the last successful decentralisation programme, 50% of the jobs moved were filled either by new promotions or by new recruitment? Given that the Minister's predecessor gave an assurance there would be no new promotional positions and no new recruitment how does he propose that the implementation group can deal with these issues if there is no modification in the Government's position?
We have to await discussions on the report of the implementation group in respect of any issues that arise.
These are already known. They are in the public domain. The Minister is keeping his head in the sand.
I look forward to meeting Mr. Flynn and I have every confidence in his chairing of the implementation group. I have worked with him in previous ministries and his capacity should not be underestimated. He will meet me based on the progress that has been made——
So there will be modifications.
No.
It is very clear there will be modifications.
That is the Deputy's view. Does the Deputy wish me to answer the question?
No, it is his view.
That is the Deputy's view. We will proceed based on the report of the implementation group and we will roll out the programme.
In the meantime the Minister is keeping his head in the sand.
In the meantime we will progress the report.
Is the Minister aware of the statement by the chairman of the implementation group to the Joint Committee on Finance and the Public Service last week that there would be no big bang in relation to decentralisation because parts of the programme were unimplementable? Has any costing been done of the ongoing revenue cost arising from decentralisation? The capital programme is a separate issue. Is the Minister aware of the detailed briefing the chairman of the implementation group gave to the joint committee last week on the supports and costs that would arise for the many civil servants who are opting to remain in Dublin? Is he aware that no solution has been found for the State agencies where few have opted to leave Dublin? Given that the Government has said those agencies will be relocated how will it get the expert people?
The Deputy has exceeded the one minute time limit.
Will it pay two sets of people, one to move and one to remain in Dublin? That is what the chairman of the implementation group told the joint committee.
It is not a question of a big bang and that we will all wake up some morning and this will be finished. No decentralisation programme, whether one supported by the party of which the Deputy is a member, and which on one occasion deferred a decentralisation programme for over eight years, or this Government, produces a big bang. This is a voluntary scheme.
Is the Minister aware of the former Minister's assurance——
Deputies are not entitled to intervene or interrupt.
This is a voluntary scheme. There is no need to misrepresent the nature of the scheme. As a Government we are committed to a very expansive programme of decentralisation. We have put an implementation group in place to roll out that programme. As it moves forward we will discuss the issues as they arise. The first issue was to ascertain how many were interested in the programme. Much to the chagrin of the Opposition thousands of people, Dublin based and in other parts, are interested in the programme.
I call Deputy Boyle who has a supplementary.
The next question is to what extent we are able to match those requirements and the willingness of those to engage with the programme set out.
The Minister did not say if any relevant costings have been done.
Members must obey the rulings of the Chair. I have called Deputy Boyle to ask his supplementary.
Does the Minister not see the irony in the fact the Civil Service Commission, the body with responsibility for recruitment and appointment to the Civil Service, can identify only two persons on its current staff who are willing to move to Youghal, County Cork, and that bodies such as the Equality Authority has not identified even one member of staff to go to Roscrea? Of the thousands of people he has cited in his reply, does he recognise, given that 50% are outside Dublin, that makes a nonsense of the Government's relocation policy which was based on the premise that Dublin would reallocate resources, become a better lived-in city in terms of resources and there would be an economic fillip for towns and cities around the country? In my constituency the Department of Agriculture and Food is moving to Macroom but the people working there will get no benefit. Given the inconsistencies it is a policy that is dead in the water.
The former Minister, Deputy McCreevy, said here on 17 September that 9,000 had registered with the central applications facility. Will the Minister accept the impression was given that all of these were Dublin-based civil servants applying to relocate? Will the Minister accept the reality is a much reduced figure? Will he agree with my assessment that the number of Dublin-based civil servants and State agency employees applying to relocate outside Dublin is of the order of 4,800? In his contribution to the Joint Committee on Finance and the Public Service, Mr. Phil Flynn said the decentralisation programme, if it is to succeed at any level — from that signalled and signposted initially last December to now what looks more likely — the Government will have to invest in child care facilities in each of the new locations identified.
The central applications facility is still open and people are still applying. We have given an update on its progress. One cannot simply ask for a big bang as if that was the intended outcome of the decentralisation programme. It is a rolling programme. There are people who are showing an interest in leaving and others who are hesitant and not showing any interest in leaving. We will have to deal with that position though the implementation group process as we proceed and find solutions where we can. Let us be clear, this is a voluntary scheme. It was never suggested it would be anything other than a voluntary scheme. The level of interest shown is far greater than was anticipated by those who have been naysaying from the beginning. We will continue to work out that scheme in the best way we can, consistent with the fact that it is voluntary.
Breeda Moynihan-Cronin
Ceist:7 Ms B. Moynihan-Cronin asked the Minister for Finance the estimated cost of providing and equipping buildings for the Government’s proposed decentralisation programme; and if he will make a statement on the matter. [24658/04]
The Budget Statement 2003 set out a major new programme of public service decentralisation involving the relocation of 10,300 civil and public service jobs to 53 centres in 25 counties. Further announcements since then increased the scope of the programme to over 10,500 jobs in more than 56 locations.
My office has been tasked with procurement of development sites in the designated locations and the procurement of accommodation solutions to the office and facility requirements of the Departments and agencies involved.
The decentralisation implementation group recommended a public private partnership approach, where appropriate, to the procurement of office accommodation. To this end my office has been developing a comprehensive risk-adjusted costing of project elements to measure the value for money of future PPP bids. It is possible that the scale and location profile of some decentralisation projects would not fit within a PPP-procured model. Accordingly, the cost profile of such projects may vary from the standard model.
It is anticipated that in the vast majority of cases the accommodation facilities will be provided by the construction of new office buildings and cost estimation can be approached on that basis. However, in advance of actual market testing of any procurement methodology, it is possible at this time only to assign the most general measurements of cost to such a large-scale and diverse programme.
It is estimated that approximately 210,000 sq. m. or 2.26 million sq. ft. of office space will be required to accommodate the total numbers included in the programme. Current industry cost norms in respect of commercial offices indicate an average build cost to fit-out standard in the range of €1,450 to €2,000 per sq. m. Such figures exclude VAT, professional fees and inflation.
In addition, the cost of equipping the accommodation to standard office equipment levels could be estimated at circa €4,000 per person. This would exclude the cost of information and communications technology and specialised equipment requirements. Such general measurements of cost do not include site procurement costs, specialised facility and equipment requirements and other variables which would arise from the spread of possible procurement methodologies.
In addition, general cost indicators of this type show a snapshot in time. The chairman of the decentralisation implementation group laid out a sequencing approach to members of the Joint Committee on Finance and the Public Service on 6 October.
Additional information not given on the floor of the House.
The group's views on sequencing and timing are to be submitted to the Cabinet sub-committee on decentralisation for its consideration. The outcome of these deliberations will clearly have an impact on how we can more closely assess programme costs going forward.
It is axiomatic that a firmer scale of costs for the decentralisation programme will only emerge on foot of actual cost proposals being received from the market. Nevertheless we can clearly anticipate that, generally speaking, the cost of providing accommodation infrastructure in provincial locations compared with central Dublin locations should yield considerable cost savings to the State over time in terms of site costs, capital build costs and indeed maintenance costs.
Does the Minister of State have a costing for the overall programme given that it was announced almost a year ago? We have seen various estimates of the overall capital cost in the region of €1.5 billion and, although the Minister of State has referred to this figure being offset against the money raised from the sale of some Government properties, I am concerned that the taxpayer gets value for money rather than property developers make a killing in 53 locations around the State.
Last week the chairman of the implementation committee spoke about property solutions being agreed for seven locations and nearly agreed in respect of 16 others. Will the Minister of State give the House costings in respect of those locations and inform Members what he is doing to ensure value for money for the taxpayer as opposed to providing killings for property developers?
We can only be guided by the normal industry costs of procuring buildings, the basis of which I have laid out.
Is the figure of €1.5 billion correct?
I have laid out the figures. The Deputy can do her own sums.
That is not a reasonable answer.
We do not have the figures.
The Minister of State is supposed to have the figures from the Department of Finance.
The former headquarters of the Department of Justice, Equality and Law Reform was recently sold for €52.3 million.
Is that the building on St. Stephen's Green?
That is correct. The price is on the public record and is substantial. We can expect a substantial saving in respect of providing that scale of accommodation in any of the provincial locations.
In regard to sequencing, the chairman of the implementation committee will come before the Cabinet sub-committee shortly with a recommendation of a number of relocations and we will begin with those that fit. Despite some of the poor figures suggested by the Opposition, the central applications facility has found that a substantial number of locations have been substantially over-subscribed. All the right people want to move to decentralised locations. Likewise, the OPW is close to finalising site deals and, in some places, the deals are finalised.
How will the Minister of State deal with a situation, which almost certainly will occur, whereby 50% of staff are willing to move and an office is set up for them while the remaining 50% stay put? In such a case there will effectively be two operations of, for example, the Equality Authority or the NRA. At what point will the Minister of State tell the people who have opted to stay put that they must go elsewhere? Does the voluntary element still remain if they are shunted into another office because the Minister of State wants to vacate a property? How does the Minister of State envisage handling situations where shadow staff in Dublin say they want to stay in their posts and are entitled to do so?
The implementation group has examined all those problems and I recall the chairman informing the Joint Committee on Finance and the Public Service that he saw solutions to them.
The chairman also said he was concerned about office blocks lying idle.
What are the solutions?
We can worry forever but Deputies can be assured that the Department of Finance will come forward with solutions based on the good advice of the implementation committee.
Are these solutions too valuable to be released to the public and the taxpayers who will have to pay for them?
It is too early to assess them.
We have not addressed all of them yet.
These are all on the public record. These are issues which must be addressed. The Minister of State cannot treat us like idiots.
The CAF was designed primarily for and lent itself to applications from civil servants.
We are talking about the costs not the CAF.
I am addressing a question.
Having made a virtue of trying to sell as much OPW property as possible in the past year, what efforts have been made to match what property remains in the OPW portfolio to meet the Government's office relocation programme? What steps is the Department taking to avoid such situations where, for example, hotels were purchased for refugee reception centres or IDA advance factories were purchased on 35 year leases and remain unused? Members on this side of the House have little confidence that those lessons are being learned.
We sought expressions of interest from the public in all the locations and they are now being dealt with. Generally, where suitable State options have been available, the first deals done have been in respect of them. Local authority and State lands have been used everywhere they have been available. The OPW would not even consider selling property which had a continued use for the State. Any property sold has been surplus to requirements.
There are solutions everywhere. On the basis of advice from the implementation group, we can now look at addressing the specific problems of the State agencies. For instance, different cultures pertain in respect of different State agencies and staff may not be able to transfer between them. The implementation group has solutions to propose in this respect which will be coming forward shortly.
What exercise will be undertaken in cases where Departments and agencies, for example, the Combat Poverty Agency and Comhairle, which were originally assigned to Monaghan and Carrickmacross, respectively, have indicated that they will not transfer to those locations? What amelioration of the procurement process for equipment and so on has taken place or does the Minister of State believe a template exists which can automatically apply, commensurate with the numbers designated? Will the Minister of State explain the position and give the House a sense of the status of towns such as Monaghan and Carrickmacross where a question mark remains as to whether they will be part of the final programme?
I recall that, before her new appointment, the then Minister for Social and Family Affairs, Deputy Coughlan, referred specifically to Comhairle and confirmed that another section of her Department would move to Monaghan.
Capital Spending Guidelines.
David Stanton
Ceist:8 Mr. Stanton asked the Minister for Finance if he has satisfied himself with the standard of project evaluation operated within Departments. [24844/04]
While much has been achieved as a result of the increased investment by Government, I accept that there have been issues in regard to value for money and cost overruns on major capital projects raised by, among others, the ESRI in the mid-term evaluation of the national development plan.
The onus is on Departments and implementing agencies to appraise and manage properly capital projects and programmes under their aegis. My Department's capital appraisal guidelines provide a framework for this. The Government has taken a number of initiatives which are designed to secure better value from public expenditure and to improve project appraisal and evaluation. The new rolling five-year multi-annual capital envelopes announced in last year's budget will enable Departments to plan, implement and manage their capital programmes and projects more effectively and efficiently and to secure better value for money from their capital expenditure. Under the general conditions of Department of Finance sanction to expenditure from the envelopes, Departments are required to comply with the capital appraisal guidelines of my Department in all cases, to report regularly to their management advisory committee on the evaluation of capital projects prior to approval and to report progress on the management of capital programmes and projects. Departments are also required to put in place appropriate contractual arrangements for all significant grants of public funding to private companies and individuals or community groups to protect the State's interest in the asset created by the funding.
My Department is in the process of updating and revising its 1994 guidelines for the appraisal and management of capital expenditure. Revised draft guidelines have been circulated to line Departments for their comments and I envisage that the revised guidelines will be published before the end of this year. The capital envelopes and the revision of the capital appraisal guidelines will be complemented by planned changes in the format of public construction contracts and contracts for construction related services through the introduction of more fixed priced contracts and a much more sensible approach to design and other overheads. This latter initiative will provide greater certainty on outturn costs.
There is evidence of significant recent improvement in the management of capital programmes and projects. In the transport area for example, there have been a number of major projects which have recently been delivered on time and under budget. I intend through the operation of the envelopes system to keep project appraisal, management and outturn costs under review to ensure the requisite level of physical output for the substantial level of investment being provided.
Does the Minister accept that the Comptroller and Auditor General found that the reason for cost overruns in the roads programme was not, as the Minister suggests, the lack of rolling envelopes or poor contract arrangements? The reason was poor estimation of the cost to the tune of €4.1 billion. In the case of some projects such as the port tunnel and the south-eastern motorway, the explosion in costs was more than three times the original estimate. What is happening, and it was largely admitted by the Minister, is that rosy pictures are being painted at the time of the Government's approval of these projects, after which they rely on ministerial momentum and the fact that no Government is willing to abandon or dramatically reduce a project because it is too expensive. Does the Minister not accept that there is a major problem with these initial evaluations? It is not just in Ireland but is particularly acute in Ireland at present with the Comptroller and Auditor General's finding on the roads programme. There has been an increase of more than 100% in two years. Does the Minister accept that more needs to be done than what he says in his reply? Does he agree that he needs to accept the ESRI recommendation of an independent evaluation rather than relying on the rose-tinted glasses that many Departments use when viewing these projects?
The point being made is that prices are often tendered to prospective projects based on the support by a line Department for a capital project, the initial evaluation of which is often based on general assumptions. The real issue regarding value for money is that the price of a project is the price at tender stage. We must figure out if we are getting value for money by comparing that price to do the job at the time with the eventual outcome rather than referring back to an initial evaluation or round figure that was mentioned perhaps ten years before and which has no relevance——
On a point of information, the Comptroller and Auditor General stated that these projects were only running two years prior to when he evaluated them. These were not long remote history projects. The Minister is wrong in suggesting that.
At its most extreme, I can cite Luas projects. Twelve years ago I was in that Department and a figure was given for it.
That is not what the Comptroller and Auditor General dealt with in his report.
If the Deputy wants to raise a specific question on the Comptroller and Auditor General's report on the roads programme, then he should ask it and we can have a specific discussion about it.
It will be disallowed by the Chair.
That is fine. The Deputy will have to accept that the supplementary question is not specific to the roads. We must make the comparison between the price at the time we decide to go with a tender and the outturn costs, which is the real value for money issue at that stage. One can argue about whether a project can proceed but that is a different argument. In terms of value for money, there is much contention in the public eye.
They are both value for money issues.
There is a suggestion that under no circumstances do projects come in on time and under budget. There are projects which do. There is a need under the revision of the guidelines for fixed price contracts. There are a range of new innovations which will assist us in that. We treat the public service unfairly if, knowing the tender price and the outturn cost, we refer to an evaluation price which greatly pre-dates the time when the decision was taken to proceed with the project.
That is not what we are discussing and has nothing to do with the evaluation by the Comptroller and Auditor General.
That is a general point I would say in defence——
Yes, but it is not a relevant point.
I find it relevant because too often figures are given for the cost of capital projects which bear no relation to the tender costs, let alone the outturn costs. They are unfairly used as a means of overt criticism of Ministers.
Much of it is fair.
Much of it is unfair.
The Minister's predecessor rushed legislation through this House regarding the National Development Finance Agency. That was to have a major role in clearing up some of what was happening in this area of overshooting. What has happened to the NDFA since? What projects have been cleared through it?
Again if the Deputy asks a specific question I can give a full answer to it. The NDFA——
It was Government strategy to clear up this area. Surely we can ask a question about it.
I am sorry for opening my mouth. I was just about to answer. The NDFA deals with projects in excess of €20 million to help line Departments find the best way to finance those where they are outside the Exchequer envelope and going through the public private partnership process. That is one purpose of the NDFA and it is an add-on under the aegis of the National Treasury Management Agency where the NDFA is located. We are at the infancy stage of PPPs and we need to address that more quickly and not run down PPPs as not being an available option to us. That is what the NDFA is doing and it will have the expertise to assist greatly in ensuring that some of the overruns do not recur.
I want to ask a brief supplementary.
We are way over the time limit.
Surely we are all entitled to equal opportunity.
Yes, but within the time limit. If the time limits are not adequate, then the Deputy should seek a review of the rulings.
Carbon Tax.
Billy Timmins
Ceist:9 Mr. Timmins asked the Minister for Finance his reasons for the decision on carbon taxes. [24626/04]
The Government decision on carbon tax was made following a thorough examination of the issues involved, including how a carbon tax would be implemented and the associated environmental, economic and social impacts. In addition, my Department carried out an extensive consultation process in which 117 written submissions were received. Following this examination, the Government decided that a carbon tax was not an appropriate policy option and that, instead, it would intensify action on other measures under the national climate change strategy.
On a point of order, can the Minister refer to his answer under priority?
I am just about to do that.
He is repeating the answer. It might give us more time to ask supplementaries.
The Deputy is unbelievable.
That does not make any sense.
The Minister has much to live up to.
If Deputy Timmins tables a question, he is entitled to an answer. I was about to say that on the basis that this was a question with which we had already dealt, to give courtesy to the Deputy who tabled the question, I should mention the first two paragraphs and then refer to the question and answer session we had previously. The Deputy is not the only one who wants to make sure we make sense in this place.
I will not go over the ground that Deputy Boyle has explored already. When the Minister referred to the mitigating alternative policies, he said that one of these was to buy more on the emissions market. Does he accept the estimate that has been put out by independent experts that the cost of buying those on the open market by 2008 is about €1.4 billion? That is the equivalent of €1,100 per household. By 2012, it will have gone to €4.3 billion, which is almost €3,500 per household. Who will pay that? Where will that money come from? Is there a sting in the tail here in that perhaps the Minister will not announce a carbon tax now, but he will have to raise this tax later and that will result in distortions and effects from those impositions on households and on the economy?
The question asked for the reasons for the decision on carbon taxes, the answer to which I gave in a previous reply, which I do not want to repeat. Specific questions regarding the type of supplementary the Deputy asked should properly be directed to the Minister for the Environment, Heritage and Local Government who could give a detailed reply. All I can say based on——
No, these are issues of tax policy. The Minister will have to raise this revenue.
To answer that point — the problem is that when one is honest one also gets stopped — I explained in the previous reply that we will examine incentivising alternative energy uses, renewal energy and all that area from the fiscal point of view. The specific supplementary the Deputy asked regarding the cost of going to the market and being able to buy the equivalent of whatever — there is a term for this that does not readily come to mind — to make up the national requirements——
Credits.
Yes, credits. If a question on that matter was directed to the Minister for the Environment, Heritage and Local Government, he would give a detailed and accurate reply.
The Minister will have to raise the tax revenue. He is avoiding applying a tax now, but he will have to raise the tax revenue.
We have explained the position — perhaps I should give the reply on that side of the House. We have explained that there are competitiveness issues. We do not believe that applying a carbon tax would deal with the problem in a way that would not affect our competitiveness.
There is still a bill to be paid.
We feel there are other options. I gave a detailed reply on this earlier.
The tax bill will also distort and have competitive effects.
The reason we did not proceed with applying carbon taxes was given in the reply to the previous question. If there are specific questions on the alternatives, they should be directed to the Minister for the Environment, Heritage and Local Government for the purpose of getting information — the purpose of Question Time is to obtain detailed information and not to have an argument.
The Minister is responsible for tax matters.
(Interruptions).
I believe the Minister will like this question because it relates to his old haunts. Does he agree that now that the Russians have signed up to the Kyoto Protocol that the ball game on climate energy has changed? What has his Department done to come up to speed with the new situation?
I listened and was delighted to hear him say he was willing to take action against improper uses of resources and so on and that he was open to ideas. Has he any proposals to take on those gas guzzlers, the 4x4s that one sees in deepest Donnybrook? Other member states of the European Union have imposed differential rates of tax on cars or on vehicles like SUVs which grossly over-use energy resources in urban environments. With the Russians now having signed up to the Kyoto Protocol, does the Minister agree the ball game has changed? This country has no climate change strategy.
Given that the Government has clearly ruled out a carbon tax, what measures does the Minister propose this State will introduce to ensure we reach our obligations under the Kyoto Protocol? Has he plans for any accelerated efforts in regard to the development of alternative energy sources?
I referred to the details in my reply to Deputy Boyle's supplementary question on the alternative policy options and I will not repeat them.
Regarding the Kyoto Protocol, the fact that Russia——
It is not that long a list.
That is why the Deputy is in the Green Party and I am in Fianna Fáil.
There are three or four paragraphs.
(Interruptions).
When his party gets 75 or 80 Deputies, we will all listen to the Deputy.
Come the day.
Come the man, come the hour.
Regarding the question of Kyoto commitments, the fact the Russian Federation is prepared to sign up to the Kyoto Protocol is an important step on its part. With its level of natural resources, including afforestation etc., and its ability to do what is required to be in compliance with that measure, we can all aspire in a far more realistic way to what is outlined in the protocol. We are fully committed to the Kyoto Protocol and the international response to combat climate change. Ireland will meet its greenhouse gas emissions reduction target under the protocol and has decided to intensify action on the non-tax measures under the national climate change strategy.
Regarding an earlier question, to which Deputy Richard Bruton also referred——
What about the 4x4s and the gas guzzlers?
These are matters for consideration in the context of the budget.
Has the Minister an open mind on that?
My mind is far more open than the Deputy gives me credit for.
Written Answers follow Adjournment Debate.