Deputy Michael McGrath has permission to take Question No. 39 in the absence of Deputy Cowen.
Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Public Service Pay Commission Reports
39. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform when the Public Service Pay Commission will report on recruitment and retention in the Defence Forces; and if he will make a statement on the matter. [10568/19]
This question relates to the work of the Public Service Pay Commission on the issue of recruitment and retention in the Defence Forces. The purpose of it is to get an update from the Minister for Public Expenditure and Reform, Deputy Donohoe, on the status of that work. As the Minister will be aware there is a recruitment and retention crisis across the Defence Forces which I know is an issue of concern across the board. I look forward to the Minister's update.
The Public Service Pay Commission has adopted a modular approach to its work programme for its present exercise focused on recruitment and retention issues in the public service. As the Deputy will be aware, the first module was published by the commission in August 2018 and deals with issues relating to nursing and midwifery, non-consultant hospital doctors and hospital consultants. The commission has not yet confirmed a timeline for completion of the further modules of its work programme, which will examine recruitment and retention issues in other areas of the health sector, the Defence Forces and the Civil Service, building on the preliminary analysis in its 2017 report and on the various submissions it has received.
In regard to the Defence Forces, I understand that written submissions have been received from both the employer and the staff associations. Oral presentations are scheduled for this week, following which I expect the pay commission to be in a position to indicate a likely timeline for the completion of the Defence Forces module. I understand the pay commission has engaged an independent firm to conduct a survey of Defence Forces personnel to assist in the analysis. This follows on from a study conducted in the second half of 2018 of specialist personnel in the Defence Forces. The main data gathering for the survey, which is being facilitated through the Defence Forces, will be conducted in February and March 2019.
As the Minister will know, the numbers in the Defence Forces continue to fall. I understand that the current number is 8,874, which is below the threshold of 9,000 the Government indicated it would not allow the Defence Forces to fall below and which is far short of the 9,500, which was set out within the White Paper. Will the Minister clarify the role of the Department of Public Expenditure and Reform in respect of this issue? He referred to oral presentations, but I understand that the Chief of Staff made a presentation before the commission on behalf of staff and management this morning, and that he was accompanied by officials from not only the Department of Defence but also the Department of Public Expenditure and Reform. We know that the latter Department was very much involved in a submission made in September by the Department of Defence and military management. Why is the Department of Public Expenditure and Reform directly involved in detailed presentations by the military and the Department of Defence?
The reason is that my own Department has overall responsibility for pay policy. As a result, we are present or involved in the preparation of submissions to the pay commission. The Deputy will know that in addition to the submissions that the employer makes, submissions are also made by those who represent employees, which, one hopes, allows the Public Service Pay Commission to make a nuanced conclusion in respect of the different issues it examines and make recommendations that will form the basis of acceptance by both sides. The short answer, as I have stated, is that my Department is present because of its responsibility for overall pay policy.
The fundamental question is when the Government expects the matter to move on. I understand the Minister's determination to uphold the integrity of the public service stability agreement, which I support. We are dealing with a construct, however, within the confines of that agreement to address specifically a crisis in recruitment and retention. Any recommendations or any report of the pay commission will need to be evidence based and, therefore, it must be methodical and thorough in its work. The Minister stated that an independent firm is involved and that the survey work of the personnel directly involved has been ongoing in February and March. Members of the Defence Forces, however, want to know when there will be an outcome. Does the Minister have any expectation or understanding as to when he will receive the Public Service Pay Commission's report on recruitment and retention in the Defence Forces?
It is a matter for the pay commission to determine when it will be able to complete the module. It is independent of my Department and reaches its own conclusions about the report and its processes. Nevertheless, as I have outlined, I expect the commission to indicate soon the timeline of the completion of the work. I hope that its indication of a timeline, which will be the first time it will be done publicly, will be of help in managing its work and in maintaining confidence in its work.
Public Procurement Tenders
40. Deputy Jonathan O'Brien asked the Minister for Public Expenditure and Reform the extent to which he has issued guidance notes or oversight of the regulation of abnormally low tenders since 2011; and if he will make a statement on the matter. [10673/19]
How many guidance notes or oversight documents in respect of abnormally low contract tenders have been published by the Minister or his predecessor since 2011?
The awarding of public contracts is governed by the fundamental principles derived from the Treaty on the Functioning of the European Union as they apply to public procurement. These include transparency, equal treatment and non-discrimination, proportionality and mutual recognition. The European Union directives set out the legal framework for the award of contracts that exceed the specified monetary threshold for supplies, services and works. Under Article 69 of Directive 2014/24/EU, the EU directive governing public procurement, contracting authorities are obliged to require tenderers to explain the price or costs in a tender where tenders appear to be abnormally low in relation to the works, supplies or services. Contracting authorities must assess the response from the tenderer before coming to a decision as to whether they will admit the tender or reject it on the basis that it is abnormally low. Where the explanation provided by a tenderer does not satisfactorily account for the low level of price or costs, having taken into account the circumstances outlined in the procurement directives, the contracting authority may reject the tender, although it is not obliged to do so. When investigating what may appear to be an abnormally low tender, contracting authorities must take into consideration the possibility that the tenderer may be obtaining more favourable terms from suppliers and subcontractors than rival tenderers.
There is little scope for manoeuvre on labour rates since contractors are required by law to pay workers covered by the sectoral employment orders, SEOs, in accordance with the terms of the applicable SEO. More efficient methods, however, of working to reduce labour costs cannot be ruled out in assessing a tender. Notwithstanding this, there is nothing to prevent an entity from performing a contract at a loss, subject to it being compliant with labour, social and environmental regulations. Where the contracting authority discovers that the price is abnormally low because the tenderer is not meeting its obligations in the field of social, labour or environmental law, the tender must be rejected. Where works contracts are concerned, specific reference to unbalanced tenders and abnormally low tenders is made in section 8 of the standard template instructions to tenderers published under the capital works management framework. These documents, which constitute the rules under which a tender competition is run, must be used in all public works contracts and have been published since 2008.
In fairness, I know the law. It is contained in SI 284/2016, which deals with abnormally low contracts, but that is not the question I asked. Rather, I asked whether any guidance notes on the matter had been issued by the Department since 2011. While we are on the subject of abnormally low contracts and how they are meant to be addressed by the contracting authority, will the Minister of State explain why the contract for the national children's hospital was not considered an abnormally low contract? Perhaps the Minister of State has different information to me, but why were no discussions, as far as I am aware, entered into in respect of that particularly low contract?
On the national children's hospital, the Deputy will be aware from responses that have been given by the Minister for Public Expenditure and Reform that the National Paediatric Hospital Development Board sought, in advance of the contract being awarded, to apply for a derogation from the use of the standard works contract. This was established by the Government contracts committee for construction, which engaged in its work from May 2014 over a long period. Derogations are allowed in exceptional circumstances, where there can be a presentation to the Government contracts committee for construction, which is a separate entity, to indicate that the circumstances of the standard work contract would not suit the development of a particular piece of infrastructure which in this case was the national children's hospital.
With regard to available guidance, the Deputy has outlined that he is aware of the regulations as set out in the statutory instrument and the law itself. There are provisions of guidance and supports available to contractors in advance of a tender being submitted through the contracting authorities, which will clarify individual issues in advance of the tender being submitted, and through representative organisations. The small and medium enterprise committee within the Department of Public Expenditure and Reform, which I chair, has representative organisations from across the sector and I am sure they will be able to engage with the sector on that.
The derogation was to move away from the standard contracting practice to a two-phase practice, not to deal with the abnormally low contract price that came in. Why was the guidance and law related to the statutory instrument not adhered to and implemented with regard to this project when there was an abnormally low contracting price compared with the other prices tendered for? One of the individuals who sat on the development board and was responsible for that contract was put on the board because of his expertise and knowledge in this area.
The Minister, Deputy Donohoe, addressed that issue both in the committee and in the House. Where there are issues of abnormally low tenders, the contracting authority, whether a public body or State agency, does not have to accept the tender, and I have outlined the reasons for that. As well as that, once a contract for a tender is awarded, there is a dispute resolution mechanism. There can be issues with the tender after it has been awarded where there needs to be dispute resolution and issues arise that would not have been foreseen. On the issue that the Deputy raises, I am sure that the PwC report that has been charged with looking at all of this will enlighten all of us and the debate in its entirety. I cannot comment on an individual case because, regardless of the contract, it is up to the contracting authority, which is the National Paediatric Hospital Development Board, and its parent Department, the Department of Health, which has ultimate responsibility for it.
41. Deputy Barry Cowen asked the Minister for Public Expenditure and Reform if he has consulted the European Commission or other European bodies on the possibility of additional funding as a consequence of Brexit; the extent to which leeway will be given or is available with regard to the expenditure benchmark; if he has had formal discussions with the European Union on the relaxing of state aid rules; and if he will make a statement on the matter. [10677/19]
This question relates to what extra supports may be available from Europe for Ireland in the context of Brexit, which we will be discussing all week. This relates to the adverse scenario, a no-deal Brexit. It is to give the Minister an opportunity to update the House on his Department's engagement with the European Commission on what supports may be available to deal with and support the most exposed sectors of the economy.
Making the case for supporting measures at an EU level that recognise where Brexit represents a serious disturbance to the Irish economy is a key pillar of the Government's response to Brexit. I am satisfied that there is a firm understanding at an EU level of the unique and disproportionate impact that Brexit will have on Ireland.
Last March, the Tánaiste met EU budget Commissioner Oettinger when he visited Ireland and discussed with him the negative consequences to the Irish economy resulting from Brexit and the possibility of EU assistance. In November, in its contingency action plan, the Commission confirmed that it would support Ireland in finding solutions addressing the specific challenges of Irish businesses.
Officials at the Department of Business, Enterprise and Innovation and its agencies have been working closely with the European Commission and Directorate General for Competition since November 2017 through the Irish-EU technical working group on state aid. Through the mechanism of the technical working group, Ireland has fully utilised the provisions of the state aid framework to enable the investment by Enterprise Ireland of €74 million in Brexit impacted businesses in 2018.
On 24 January 2019, the Minister, Deputy Humphreys, met the European Commissioner for competition, Margrethe Vestager. The focus of the meeting centred around the severe challenges that Irish businesses will face when the UK leaves the EU and the need for appropriate and timely State supports. The Commissioner emphasised that the Commission stands ready to act urgently in mitigation against the impacts of Brexit on Irish firms.
The Stability and Growth Pact provides flexibility for budgetary requirements in certain circumstances. One such provision relates to unusual events outside of the control of government which have a negative impact on the budgetary position. If the impact of a disorderly Brexit were to be severe, the Government could make a case for an application for the use of the so-called unusual events clause, which permits temporary deviations from our medium-term budgetary objective or the adjustment path towards it. This could facilitate extra spending linked to the disorderly Brexit as long as it does not endanger our medium-term budgetary sustainability.
It goes without saying that this is a scenario that none of us wants or expects to see happen but it is certainly a possibility. Will the Minister outline to the House any specifics of what European authorities have committed to doing to assist the areas of the economy that will be worst-affected, including farmers, the food sector, agrifood and indigenous manufacturing? We have the Brexit loan scheme which is welcome and is supported by the European Investment Bank. Are there other specifics where commitments have been given where, in the event of a disorderly Brexit, direct and immediate supports are required? Has the nature of those supports been scoped out yet? Do we know what they are and how they will be administered? With only such a short window left, people want to know whether specifics have been agreed, and if so, what they are.
We will be in a position to agree specifics with the European Commission as soon as we are clear on what the specifics of Brexit look like. At this point the Commission, through many Commissioners, has indicated its support in principle and its firm commitment to supporting Ireland in facing this grave difficulty. It will use the flexibility that is open to it to support us in decisions that we need to make. Commissioner Vestager has already publicly said that the Commission would stand ready to act urgently in mitigation of the impact of Brexit on Irish firms. The fact that she has given that commitment publicly is a strong advance on where we have been previously. Due to the work that the Minister, Deputy Creed, has under way, Commissioner Hogan has reiterated the EU's readiness to respond to support Irish farmers and the Irish agricultural community in particular. We will be in a position to give further specifics on this as soon as we are clear on the nature of the event that we are responding to, if this event happens at the end of March.
The commitment of support from the European Union is to be welcomed. There has been strong solidarity among our European partners on the issue of Brexit, so that should be acknowledged. These words of support from the European Commission and others are important. I assume that in the background the Government has been scoping out and fleshing out what would be asked for in that scenario. We have the commitment of support from Europe on the one hand, but I expect that with what the Government is doing across all the various strands of state aid and direct support for agrifood and indigenous manufacturing, we have worked out precisely what we will be asking for in the event of a no-deal Brexit materialising on 29 March. I welcome what the Minister has said about state aid. An important commitment has been given about flexibility. Will the Minister reassure the House that the Government is finalising what those asks are in the background?
It is not just what our future asks will be in the event of a disorderly Brexit but also recognition of what we have already done. There has been considerable effort to get ready for Brexit, with the support of this House and the support of the Deputy's party in various budgets. I hope I am not speaking too soon but I think we should not underestimate the amount of co-operation going on to enable the passage of a Brexit omnibus Bill this week.
It puts into sharp focus the co-operation in Ireland to help the Government and the people respond to the great external risk we face.
In response to the Deputy's question on whether we are clear on the options we might need to pursue in the light of Brexit in the different forms we could face in a few weeks' time, yes, I am clear on the different issues I might face and the different needs we might have and how I would need to respond to them. We do, of course, hope none of this will come to pass. The point at which we will need to translate the support in principle into detailed action will be in the early phases of an event that we are all working to avoid.
Flood Relief Schemes Status
42. Deputy Jonathan O'Brien asked the Minister for Public Expenditure and Reform the flood relief schemes or capital projects that will be affected by the re-profiling of €3 million worth of investment under the flood risk management programme; and if he will make a statement on the matter. [10674/19]
Are there flood relief schemes or projects which have been affected by the re-profiling of €3 million worth of investment as recently discussed in the debate on the Revised Estimates?
Arising from the Government's decision of Tuesday, 12 February 2019 on capital reallocations related to the cost overrun on the national children’s hospital project, the Office of Public Works is reviewing the most appropriate means of achieving the required capital savings of €3 million in the flood risk management area. Expenditure on any particular project or programme in any year is dependent on many variables related to the progress of the project and programme. All capital projects committed to will be delivered within the quickest possible timeframe.
I am not doubting or questioning that they will be delivered. What I am asking is whether there will be delays in meeting some of the completion dates previously outlined or whether the start dates of some projects will be put back. There may be reasons for putting them back, including planning reasons or whatever else, and if that is the case, I am sure the Minister of State will tell me, but I want clarity on whether there are projects the completion or commencement dates of which are being pushed out as a result of the re-profiling of the €3 million worth of investment.
As of today, there are 90 schemes on which we are working with local authorities. Some of them have started, while some are in the planning pipeline. To reiterate what I said: there will be no delays, but there could, as the Deputy said, be delays because of planning issues. For example, I was hoping to be in Cork, with work started and machines on site, at the end of last year, but that did not happen. However, it was outside our control because people were objecting. The same is true of the project in Ennis south. I was hoping to be there at the end of last summer, but we will be signing the contracts next week. Some schemes might be delayed in the planning process, but I believe and know that the €3 million worth of investment has been lost because of the delays in moving those schemes through the planning process. There are, however, many schemes that will be achieved. When I was asked about the cut of €3 million, I took it out of the area of flood relief measures for the simple reason that I knew some of the schemes were being delayed in the planning process. They might be delayed by two or three months.
I want to clarify that none of the schemes is being delayed as a result of the re-profiling but because of other external factors which freed up the money within the budget to be reallocated. If that is the case, I welcome it, but there has been some confusion. However, if that is the answer, I accept it fully. Will the Minister of State clarify that no projects have been delayed as a result of the re-profiling? Is it all due to external factors which enabled the Minister of State to reallocate the €3 million?
In taking up this role I knew that there was not enough money available on day one. I went looking for €1 billion from my colleague and the line Minister which I achieved. It works out at €100 million a year. Three years ago we were spending nothing in response to the need identified. The Government is fully committed to delivering schemes for the people and there will be no delay on my part. However, schemes may be delayed in the planning process.
43. Deputy Joan Burton asked the Minister for Public Expenditure and Reform his plans to review and revise guidelines on the accountability of public servants on State boards, in particular civil servants from his Department who are members of State boards; and if he will make a statement on the matter. [10675/19]
Does the Minister have plans to review and revise the guidelines on the accountability of public servants who serve on State boards, in particular civil servants from his Department who are members of State boards? Will he explain the governance arrangements for reporting to us?
Circular 12/2010: Protocol for Civil Servants nominated to the boards of non-commercial State bodies lays down a detailed framework for civil servants who are board members to report to the relevant Minister in certain circumstances. The relevant Minister is the Minister under whose aegis the body falls. The purpose of the protocol is to set out the reporting obligations of the nominee civil servant board member in the extreme situation where serious issues arise that are not being addressed by the board and where the chairperson of the board does not report such. Accordingly, for example, the circular provides that where there is a significant public policy issue or where there is disagreement at board level, the civil servant board member should request the chairman to notify the Minister or failing that, notify the Minister himself or herself. Moreover, the circular provides that the civil servant board member should present information directly to the relevant Minister in cases where there are serious weaknesses in controls that have not been addressed, or where there is a significant strategic or reputational risk to the body that is not being addressed, or where there are serious concerns about possible illegality or fraud. The operation of the circular is subject to the legal common law, fiduciary and statutory responsibilities of the nominee civil servant board member.
The protocol is intended to contribute to greater accountability in the non-commercial State sector by providing further guidance for civil servant nominees on the boards of non-commercial State bodies above and beyond the governance framework already prescribed for all members of State boards and set out in the code of practice for the governance of State bodies. In the normal course of events the correct line of authority is from the chairman of the board to the relevant Minister. As a general principle, the civil servant nominee board member has a responsibility to act collectively in decision-making and I am satisfied that Circular 12/2010 issued by my Department provides guidance and guidelines for civil servants nominated to the boards of non-commercial State bodies which ensures proper accountability and reporting arrangements.
I think everybody in the country is completely shocked at what has happened with the cost profile for the national children’s hospital project. There has to be something deeply wrong with the arrangements the Minister has outlined if the cost overruns that have been experienced happened and nobody from the Department of Public Expenditure and Reform which is charged with overseeing public expenditure to prevent a further collapse of the economy saw himself or herself as able or required, or saw it as appropriate, to tell the Minister about what was happening. Moreover, there are further revelations in today's newspapers that, in fact, the head of estates in the Health Service Executive who is on various committees dealing with the national children's hospital made it very clear as far back as last May that there were serious problems with cost overruns, yet it seems the civil servant on the board did not do anything. The Minister's colleague, the Minister for Health, who sat across from him at the Cabinet table decided he did not have to tell him. That cuts against the grain of everything that happens at budget time, not just in the context of current but also capital expenditure.
I have acknowledged and will do so again that the procedures and difficulties in the latter phase of the national children's hospital project will change and have to change for the future. I have acknowledged and accept my responsibility for the difficulties with the project. In answer to the Deputy's question on whether I am happy with the way in which the civil servant on the board fulfilled his duties, the answer is yes because it is very clear that the issue needs to be raised with the line Department.
The view of my official, whom I have met to discuss this matter, is that the issue was being raised with the Department of Health. He could see this was being reported and he felt it was being dealt with. I have already outlined the changes I want to make to help to ensure the issues we have experienced with huge projects like the national children's hospital are not repeated.
Nobody is suggesting that the Minister or the civil servants in his Department should micromanage every element of a project in another Department because that is what the other Department is for. Given that a world-level overrun is happening in the case of the national children's hospital in Ireland, when does common sense click in? I would have expected that a senior civil servant would discuss this matter with others so that the children's hospital project would come to fruition and the taxpayers of Ireland, and their hard-earned money, would not be taken for a complete ride. The Minister has said he is happy with the arrangements that have led to this outcome. I think that happiness is misplaced. As there are so few people in his Department, I assume everybody pretty much knows everybody. I am sure lots of cups of coffee and tea are shared. The Minister needs to give serious consideration to why no one within his very small Department thought to say to him, at the time of the budget or at some other time, that there was a serious problem with costs.
I never said I was happy with the processes that led to this outcome. I said I was satisfied with the operation of the circular. The Deputy either misinterpreted me, or she deliberately attributed words to me that I did not say. It is up to her to decide which of those possibilities is the case. I never at any point said I was happy with the processes that have led to this. I have already outlined what I am going to do to change them. Work is under way to change them. I have said that the way in which this issue developed, particularly the latter phase of it, needs to change in the future and will change. The Deputy will never acknowledge that we get the majority of projects right. We will deliver three major transport projects on time and on track this year. We will deliver major projects like primary schools and primary care centres all over this country in the way the taxpayer wants. I am not looking to minimise in any way the anger and concern caused by the national children's hospital project. I will not have words attributed to me that I did not state.