Enda Kenny
Ceist:1 Deputy Enda Kenny asked the Taoiseach the duties and responsibilities of the special political advisers appointed by him; and if he will make a statement on the matter. [16800/07]
Ceisteanna — Questions.
Departmental Appointments.
Caoimhghín Ó Caoláin
Ceist:2 Deputy Caoimhghín Ó Caoláin asked the Taoiseach the responsibilities of each of the political advisers appointed by him; and if he will make a statement on the matter. [18779/07]
Eamon Gilmore
Ceist:3 Deputy Eamon Gilmore asked the Taoiseach the non-established civil servants or contract staff appointed to his Department since the general election 2007; and if he will make a statement on the matter. [20152/07]
I propose to take Questions Nos. 1 to 3, inclusive, together.
Under the direction of the programme manager, the primary function of the special advisers is to monitor, facilitate and help secure the achievement of Government objectives and to ensure effective co-ordination in the implementation of the programme for Government.
They are also tasked with giving me advice and keeping me informed on a wide range of issues, including business, financial, economic, political, administrative and media matters and performing such other functions as may be directed by me, from time to time.
Each of the advisers liaises with several Departments and acts as a point of contact in my office for Ministers and their advisers. My advisers attend meetings of Cabinet committees and cross-departmental teams relevant to their responsibilities. They also liaise, on my behalf, with organisations and interest groups outside of Government.
The advisers assigned to the Government Chief Whip and to the Minister of State provide advice to the Ministers of State and monitor, facilitate and secure the achievements of Government objectives that relate to the Department of the Taoiseach, as requested by the Ministers of State.
My programme manager meets other ministerial advisers on a weekly basis. He monitors and reports to me on progress in implementing the programme for Government.
The following new staff have been appointed to my Department since the general election: Eoghan O'Neachtain to fill the vacancy for Government Press Secretary; John Downing as deputy Government Press Secretary; and Jill Collins to fill the vacancy for special adviser to the Chief Whip.
While the Green Party programme manager based in Government Buildings is not a member of staff of my Department, my Department has engaged a personal assistant to provide administrative assistance to him and to the deputy Government Press Secretary.
There has been no increase in the number of special advisers who assist me in dealing with the complexities and volume of Government business — in fact, there has been a decrease of two.
I know, as I have been reminded during the week, that the Taoiseach is a fair-minded and simple man. I am sure he would prefer to answer questions like these than other questions.
What is the total cost to the State of the political advisers appointed by Government? As a fair-minded man has he looked at the disproportion of resources available to Opposition parties to deal with the business of democracy?
I do not have an overall figure for the Government. The cost of my own staff is approximately €600,000. The overall cost is far less than under previous Governments when there were well over 50 or 60 advisers. While it is not a direct parallel, when former Deputy McCreevy was Minister for Finance, substantial increases were made in the resources given to parties.
How much does Deputy Kenny get?
The programme manager system has worked reasonably well. Depending on the people involved, it can streamline business for Minsters and the Government. Does the Houses of the Oireachtas Commission have an input into considering whether parties might need extra resources? We might also discuss the structure of committees and the range they must cover if the House is to do its business effectively. Opposition parties can find themselves in need of assistance if they are to work effectively in the interest of the people.
I am not opposed to that suggestion. We set up and resourced the Oireachtas commission a few years ago. The sum total of funds allocated was way over what it used to be in previous times. Every Member now has a second member of staff. The Government Whip supports the continuing expansion of research facilities which help Members to contribute to debates by facilitating them in researching matters. Most of the issues raised by the Deputy come within the scope of the Oireachtas commission. If he has particular issues, I will be glad to take them up with the Chief Whip.
I understand the Oireachtas commission has a role in the allocation of parliamentary party resources. Proposals will be brought to the commission shortly in that respect.
On 18 October 2005, in responding to similar questions, the Taoiseach stated each of his political advisers "liaises with a number of Departments and acts as a point of contact in my office for Ministers and their advisers. My advisers attend meetings of Cabinet committees and cross-departmental teams relevant to their responsibilities". Today he indicated some of those within his Department who have roles in this regard. Which of his advisers liaises with the Department of Health and Children? Does that same party liaise with the chief executive of the Health Service Executive, Professor Brendan Drumm? How often does the Taoiseach receive briefings from his adviser on health matters? Are those briefings follow-ons to engagements with the Minister for Health and Children, her Department and the chief executive of the HSE? Is the liaison between the Taoiseach's Department and the Department of Health and Children, or the respective offices of the Taoiseach and the Minister, everything it should be? Is the Taoiseach fully conversant with the detail of the shambles of our health system in the pursuit of the delivery of health care by his Minister, her Department and the HSE? In the light of that, will the Taoiseach revisit the matter of co-ordination? What role will the Taoiseach's advisers play in helping to ensure he has a clear and full understanding of what is being done in his name, as premier Minister and that of Government, in collective responsibility with the Minister for Health and Children, in respect of health care provision in this State?
Do political advisers or, perhaps, the Minister for Transport and the Marine, Deputy Dempsey, assist or advise the Taoiseach in the preparation of scripts and various articles submitted by him for publication in what I can only describe as his now regular appearance in the Sunday Independent?
The Deputy appears in An Phoblacht every week.
On page 3.
The Cabinet committee on health meets monthly. There are weekly or even more frequent meetings at official level on health reform, ongoing negotiations and so on, depending on what issues arise. There is weekly contact between senior officials from my Department, not necessarily advisers, and officials from the Department of Health and Children and the Heath Service Executive. The officials always meet a week or two before a Cabinet committee on health. There is close liaison not alone on health but, in respect of health matters in particular. There is a close working relationship between the Department of Finance, the HSE, my Department and the Department of Health and Children in respect of health matters.
Which of the Taoiseach's advisers deals with the health portfolio?
While one of my advisers attends the meeting, co-ordination in respect of health matters is driven by an Assistant Secretary.
I am interested to hear that the Taoiseach's relationship with the Sunday Independent is now akin to Deputy Ó Caoláin’s relationship with An Phoblacht.
How does the liaison between the political advisers and special advisers from his Department and other Departments work in practice? Do regular meetings take place between the Taoiseach's advisers and advisers from the line Departments and are those meetings minuted? Do they take place on a particular day of the week or, before or after the regular Government meeting? What is communicated between advisers at those meetings and how does this differ from the communication that would take place between the secretaries of Government and the Secretaries General of the various Departments?
Will the Taoiseach give a sum total of the number of special advisers now employed by his Department?
Effectively, there are three advisers employed by my Department. A fourth person acts as a co-ordinator between all Ministers of State as they do not have advisers.
Yes, is the answer to the Deputy's next question; a programme manager chairs a weekly meeting, the agenda of which usually relates to the Government's programme for that week and any other outstanding issues, perhaps, from the previous week. For issues that require more time, the key advisers, not usually the entire team but those involved in the issue, would meet a second time during the week. Meetings in regard to the Estimates and the budget take place at least weekly, but, normally, they take place twice a week and, at other times of the year, more frequently.
Has the number of assistant Government press officers increased as a result of the increase in the number of parties participating in Government?
Yes. There is a long-standing precedent that, where a number of parties are in Government, each party has a deputy press secretary. The current position is that Fianna Fáil has appointed a press secretary and one has been appointed by the Progressive Democrats and one by the Green Party.
Do the Independents have their own press secretary?
Not yet.
Is it part of the deal?
We are working on it.
Is it an open-ended deal?
Cross-Departmental Teams.
Enda Kenny
Ceist:4 Deputy Enda Kenny asked the Taoiseach when the cross-departmental team on infrastructure and public private partnership will next meet; the number of meetings of the team planned for the remainder of 2007; and if he will make a statement on the matter. [16802/07]
Caoimhghín Ó Caoláin
Ceist:5 Deputy Caoimhghín Ó Caoláin asked the Taoiseach when the cross-departmental team on housing, infrastructure and public private partnership last met; the number of meetings it has held in 2007; and if he will make a statement on the matter. [18780/07]
Eamon Gilmore
Ceist:6 Deputy Eamon Gilmore asked the Taoiseach when the cross-departmental team on infrastructure and public private partnership last met; when the next meeting is planned; and if he will make a statement on the matter. [20153/07]
I propose to take Questions Nos. 4 to 6, inclusive, together.
The cross-departmental team has met on six occasions to date this year, most recently this morning. Its role is to identify and assist in progressing and resolving issues related to infrastructure planning and delivery, ensuring that they are adequately prepared for consideration by the Cabinet Committee on Housing, Infrastructure and PPPs and, where necessary, by the Government. The cross-departmental team normally meets on a monthly basis.
In regard to the construction sector, to which 25% of the economy is now linked with 12% of our workforce whereas 5% is the norm in most other countries, what is the view of the cross-departmental team regarding the recommendation of the Construction Industry Federation that a cut of 50% in stamp duty is needed to re-ignite the construction sector? Was that recommendation deemed appropriate, real, unrealistic or just irrelevant?
What is the view of the cross-departmental team regarding the comments of the CIF that only 45,000 houses will be built in 2008, some 20,000 fewer than the Government has predicted? That will have serious implications for the construction sector. Arising from that, what discussions, if any, took place regarding the significance of the employment content particularly of migrant economic workers from eastern European countries who will be primarily affected by a downturn in the construction sector? Was there an assessment of how many would be likely to leave the country or how many might stay?
In regard to public private partnerships and regional development, the Ennis bypass is very welcome. The Taoiseach may have been there and seen the impact of this major piece of road. Did the cross-departmental team have any discussion with regard to the Shannon-Heathrow connection which is central to regional development? How does the removal of the Heathrow slots from Shannon to Belfast protect and defend the strategic interest of regional development, which was specifically identified by the Government? Given that the Government now states we must do extra to make up for the loss of the Heathrow slots from Shannon, what ideas were thrown around at the meeting of the cross-departmental team?
The cross-departmental team on housing, infrastructure and public private partnership is not involved in discussions on the Shannon to Heathrow connection. A separate group of officials has met with a large number of the interest groups for the Shannon area, both in Dublin and in Shannon. It has engaged with State agencies in assessing the consequences of the loss of the route by analysing the figures of the past number of years. The group has also helped to co-ordinate efforts across a number of Departments to come up with whatever initiatives the State can take to alleviate the difficulties and to find alternatives. It is not the team to which the questions refer but it has been very active.
On the Deputy's question about housing, I have heard what the Construction Industry Federation, CIF, has said. I attended a function yesterday, in its new headquarters, relating to CIF pensions and I spoke to a number of people involved so I am aware of the views of some of them on this issue. Stamp duty is not a matter for the Civil Service but the Department of Finance. There has been ongoing contact with the Department and the Department does not share the CIF's view at all. The committee tries to co-ordinate efforts and takes a big interest in infrastructure. The key objective is to achieve the appropriate level of supply to meet demand, which has been the challenge for the past number of years. There has been unprecedented growth in the past ten years and the market continues to be underpinned, in terms of volume, by demographic trends. The high levels of housing output in recent years has to be viewed in the context of a relatively low ratio of housing stock for the population compared to other EU countries. The recent report by DKM Consultants, which is the most comprehensive report on construction industry indicators and was published at the end of August, indicates the likelihood of housing completions being approximately 77,000 this year, which would appear to be consistent with the views expressed by various commentators who have said the figure will be lower next year.
Price escalation is the greatest threat to the market and the committee has been trying over the years to ensure we keep supply and demand in equilibrium because that is how we keep the industry strong, and employment in the industry high. It is also how we will bring about a moderation in house prices, which is what we have been trying to do for some time.
The view expressed by the committee in the various discussions is that price escalation is the greatest threat, not only in terms of affordability but also because excessive prices increase the risk of a subsequent fallback. The Government has issued timely cautions in the past two years about the danger of the moderation in prices being reversed. Regrettably, our concerns proved well founded as the moderating price trend reversed dramatically, from single digit growth in early 2005 to as much as 25% in the third quarter of last year. Even though there were a number of interest rate increases in that period the value of approvals in the second quarter of last year was almost 60% higher than in the same quarter of 2004 and the availability of so much additional funding in a heated market was, in the view of the committee and its advisers, bound to exert some pressure. Against that background, the recent turnaround from unsustainable house price escalation, such as happened in 2005 and 2006, should be neither surprising nor unwelcome. We are now seeing transition to a more balanced and mature market and it is in everybody's interest that the housing market evolve on an orderly and sustainable growth path in terms of prices, lending and output. This positive overall view is reflected in the Central Bank's report of last week. Easing prices should bring more buyers into the market, helping to ensure its continued growth.
We have also taken a range of measures to help affordability, such as general reductions in taxation and the doubling of mortgage interest relief in the last budget. We have abolished stamp duty for first-time buyers and have introduced affordable housing schemes. There was a new record in house completions last year and, even though this year is experiencing an easing in output, the level is still likely to be high. Investment in the NDP will help to underpin construction on the wider front. The completion figure for the first seven months of 2007 is 44,000. If adjustment were made month by month for delayed ESB connections, on which the figures are worked out, the trend would still be high. There is no doubt that there will be a moderation next year. We just have to watch how it goes during the remainder of this year and into 2008.
The Taoiseach did not say whether there was any discussion about the migrant workers staying or moving as a result of the decline. The Minister for Finance commented on the necessity to cut back on public expenditure because of the rate of public spending by Government in the past 12 months, particularly prior to the election. In view of this was there any discussion about public private partnership, PPP, infrastructure projects that may not now go ahead in the timescale originally envisaged? If so, have those projects been identified?
The Minister for Enterprise, Trade and Employment has a detailed assessment of the numbers of migrant workers in each area. If there are redundancies in the building sector that will have an effect. Other sectors will take up a significant amount of these, for example, there is an increase in the home improvements area, and in offices and shopping centres and other developments under the NDP. FÁS and the Department have good figures for this trend. The latest unemployment figures up to September at 4.7% do not show any great increase in unemployment in the construction sector. It is too early to say but that will grow based on the projections made.
One of the advantages of having surpluses in good years is that if things are tight in another year we can continue to honour our capital programme. That is our intention. PPPs account for €13.4 billion in the NDP, many of which are in the transport area in the seven year capital programme. There is no proposal to cut back on those projects and we intend to honour the capital programme no matter what happens. Overspending on the current expenditure side is modest in this year's account. There will not be much difference over the year. The difficulty will be on the income side which will be lower, but by how much is still a matter for debate.
Will the latest report of the Comptroller and Auditor General be referred to the attention of the cross-departmental team? Does the Taoiseach agree that the Comptroller and Auditor General's update of the five schools project provided for by a PPP is directly relevant to the role of the cross-departmental team on housing infrastructure and PPPs? Does the Taoiseach recall that in his 2004 report the Comptroller and Auditor General flagged the possibility that the schools could have been more economically provided through direct State funding?
Has the Taoiseach noted the Comptroller and Auditor General's latest report's clear indication of significant disquiet on the part of the respective school managements in all such cases regarding the provision by the private contractors of the necessary maintenance and management services that formed part of the overall arrangement? Has he noted the Comptroller and Auditor General's statement that this raises questions as to the departmental verification of payments issued? I understand this amounts to €1.4 million in respect of maintenance and management services. Does the Taoiseach agree this is not a small sum of money? As for the five schools in question, there is serious disputation with the public private partnership, PPP, approach in the ongoing servicing of the school properties' needs. What does the Taoiseach propose to do in this regard? As a first step, does he believe the cross-departmental team has a role in addressing this highly important element of the latest report from the Comptroller and Auditor General?
While the cross-departmental team is dealing with the matter, I have read the report and the Department of Finance's summary of and recommendations on the report or, at least, its commentary on the report's recommendations. I have noted the issue regarding the schools which the House has debated a number of times. In many cases, a public private partnership can do an excellent job efficiently, well within budget and achieve good value for money. Its greater cost in the long run is never disputed because the State can always borrow most cheaply.
In respect of the schools issue, the Deputy might recall the Department of Finance's comments regarding value for money and the speed at which it could be dealt with. The Department noted that the Comptroller and Auditor General's value for money report which examined to contract close the five schools projects mentioned by the Deputy had acknowledged that, ultimately, the full value for money represented by the project could only be determined over its 25-year life cycle. However, the Comptroller and Auditor General recommended that the costs and benefits of adopting a PPP approach should be assessed relative to the performance of a comparable group of schools procured conventionally. Moreover, formal evaluation of the project over, for example, the first five years of the contract's operation would be desirable.
The Department of Education and Science is preparing a five-year review of the evaluation of those schools bundled into the pilot PPP project. This review will encompass an audit of the schools, a five-yearly review and adjustment of the running costs and an evaluation of the project to date. In addition, the rolling programme for the whole school evaluation reports will include the pilot schools to assess the impact of PPP contracts on the work undertaken to ascertain whether the figure of €1.4 million mentioned by the Deputy constitutes good value. However, this does not prove or disprove the case. In many cases, PPPs can be completed very quickly by using the private sector to secure, build and deliver fixed price contracts with a payout over a 25 year period. In many programmes, such contracts have come in well under time. The Cork School of Music is a possible exception, as it experienced difficult problems when the company went into receivership and other procurement issues arose. However, in all other projects the PPPs have come in under budget, having been dealt with efficiently by the private sector. However, this constitutes only a very small part of the schools building programme.
It is interesting to analyse the issue and make assessments, as the Department of Education and Science is doing. The Department of Finance has also given its views in this regard. However, one cannot condemn PPPs on the basis of the experiences to date.
I was not going back over the main debate that we had as to whether the PPP approach was value for money. My position and that of the Taoiseach are well noted in that regard. Will the Comptroller and Auditor General's report be referred to the cross-departmental team? Can he provide clarification? The cross-departmental team has responsibility for PPP. Will it have the opportunity of scrutiny and discussion of the Comptroller and Auditor General's most recent update report on the ongoing service provision arrangements at these five schools for which there is serious concern? There also is concern about the verification procedures within the Department on the provision of these services, the current fee for which, in case there was any doubt, is running at €1.4 million. This is not small change. If the services are not being delivered, there is a serious problem on an ongoing basis, apart altogether from the substantive argument regarding PPP. The Taoiseach should revisit the entire area, but will he clarify the two matters I have raised?
It is being dealt with, not by the cross-departmental team but by the Departments of Finance and Education and Science which have comprehensively answered the various recommendations that have been put in the 2007 interim report. The Departments have given their views. Obviously, that report is circulated to cross-departmental teams but it was dealt with by the Department of Education and Science which was doing the follow-on and the Department of Finance which did the total assessment of the Comptroller and Auditor General's report.
There are two questions I wish to pursue with the Taoiseach. He stated this cross-departmental team held its last meeting this morning. On how many occasions has the cross-departmental team met since this question was last asked in the House on 27 February last?
Second, can I briefly pursue with the Taoiseach his response in respect of the residential construction sector? As I understood it, he stated he would adopt a wait and see attitude to residential construction output and its implications. He stated that he expected output of approximately 77,000 units this year, which would be reasonably good. If, however, as is predicted, the output for 2008 will be down to approximately 45,000, then residential construction output in 2008 will be approximately half that in 2006. That will obviously have major implications for the levels of employment in residential construction, builders' suppliers, revenues etc. In that context, I am a little surprised to hear the Taoiseach state there is a wait and see attitude and I ask what consideration has the cross-departmental team, the Government generally or the Taoiseach given to the consequences of a downturn in residential construction activity from 90,000 units last year to 45,000 next year, if that is what transpires. What are the implications for employment in residential construction and for tax revenues for the State in terms of income tax, VAT on building materials and stamp duties on transactions, what are the implications in terms of the social welfare budget if there is a significant reduction in the number of people employed in construction activity, and what generally are the consequences for the economy because it has been very heavily dependent on construction activity? As the projections are that output will fall from 90,000 units last year to 45,000 units next year and I am a little surprised to hear a wait and see attitude being adopted, I would like to know what anticipation is being given to a move of that kind and what are the implications.
As I stated, it looks as if the figure for this year will be approximately 77,000 units, which would be very high. The Department's assessment is that the figure for next year will be in the order of 55,000 units plus. Activity in other areas of construction — house refurbishment, retail and office developments — is high and will take up much of it. That tends to be the view.
It is not a question of wait and see. A moderation in price is a good thing. I have answered questions on this matter for the past few years. A little over a year ago, in the third quarter of 2006, as we moved from 25,000 houses upwards we still saw a price increase of 28%. The fact that there is a moderation in prices is good for the market. If this means a reduction in the overall number of houses built, so be it. We were never going to stay up at the level of 85,000 or 90,000 units. I would far prefer to see supply and demand coming into equilibrium with a slower rate of house inflation. That is what we have been trying to achieve for the past seven or eight years.
If we moved from 77,000 units this year with no take up in the other sectors, it has been estimated that 30,000 people could be unemployed, but a substantial number of those would be absorbed into other sectors. We are likely to see an increase in the level of unemployment in the private house construction sector. We will hold discussions with the Construction Industry Federation and others. I was in contact with the CIF last night and we do not foresee a position where the major contractors hold back and play a wait and see game. They are the ones who have planning permission and can proceed with contracts. They are waiting to see what will happen in the market.
Many contractors would say the banks have tightened up on the pre-sale arrangements under which they lend to them. Up to last year the banks allowed contractors to build up to 40 or 50 houses without them being sold but now they operate on a system of lending for five or ten houses. I do not have that information but that is what the construction sector has said. That would force the building sector to slow down.
From all the analysis of the next few years based on population, age structure, reduced household size, immigration and housing stock being below the EU level, it still appears there should not be a reason for the figures to reduce excessively. That is the professional analysis of people within and outside the Government. I cited the DKM report recently.
I share the Taoiseach's wish that there will be a soft landing, as has been referred to, and that we will not see grief. There have been indications for some time that we are moving towards a significant reduction in house construction activity. The Taoiseach referred to the lending practices of the banks, which have been in place for building land for some time. Indications have also come from the drop in the number of planning applications.
I appreciate that on the refurbishment side, planning applications are not required. Are there indications or is information available on whether there is an increase in planning applications for office buildings, shopping centres and the type of construction activity the Taoiseach hopes will pick up at least some of the slack if there is a downturn in construction activity on the residential side? To my knowledge there has not been a significant increase in planning applications on that side of the equation.
My basic question is whether the Government has a contingency plan. The construction industry has been a major part of the economy, with one in eight people working in it. If there is to be a downturn, albeit with a soft landing, what is the game plan, or is there one? I would have thought this was the type of subject on which the cross-departmental team would have been coming up with answers.
The employment level has not dropped this year because there was very strong demand in the categories other than the non-residential sector — I believe there are five categories in total. That is why the figures have held up so well this year, even though the level of construction reduced from 93,000 units to 77,000, and if one considers the second half of the year, it is even lower than 77,000 given the carryover.
The game plan from the Government's point of view involves the enormous injection of expenditure into the capital programme across the headings. This involves several areas. The schools summer works programme which was directly designed for small and medium sized buildings and, in some cases, bigger buildings accounts for almost €300 million. There is also a huge capital programme for first, second and third level education, the roads programme and the infrastructure programme. That investment continues. The challenge for us up to 2013 is to be able to continue to invest that level of resources and to do so without construction inflation such as we experienced in the early years of the last plan in order that we achieve far better value for money. While we cannot control the residential and private sector market, there is the social and affordable housing programme which involves 6,600 units. In all of the other areas of the NDP we are investing huge resources in the construction sector.