Dáil Éireann díospóireacht -
Thursday, 11 Apr 2019

Vol. 981 No. 8

Vote 42 — Rural and Community Development (Further Revised)

That a sum not exceeding €260,682,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 2019, for the salaries and expenses of the Office of the Minister for Rural and Community Development including certain services administered by that Office and for the payment of grants.

The Revised Estimates Volume, REV, for public services was presented to the House last December, with further Revised Estimates presented to the House in February. The Estimates set out the allocation of Government expenditure by Vote for this year, amounting to €66.6 billion, an increase of 5.5% on the outturn in 2018. The vast majority of this, nearly 90%, relates to day-to-day current expenditure. This represents a year-on-year increase of almost 4%. Indeed, combined funding for the key day-to-day public services of the Departments of Health, Education and Skills and Employment Affairs and Social Protection amounts to almost €47 billion in 2019, almost 79% of total expenditure.

Spending on our health service is now at a record level. Including the allocation of capital spending, it now stands at €17 billion. This is an increase of over €1 billion on the amount spent in 2018.

Turning to education I note that this year's allocation amounts to €10.8 billion, an increase of over 5% on the 2018 outturn. This will allow for the recruitment of additional teachers and special needs assistants and enable more targeted investment in higher and further education to meet the skills and education needs of the labour market.

Some €20.5 billion has been allocated to the Department of Employment Affairs and Social Protection. This allocation includes provision for an increase of €5 per week in the weekly maximum rates of all social welfare payments. Jobseekers on age-related reduced rates of payment will benefit from the full increase.

Other areas of investment include the recruitment of additional gardaí and additional housing supports in the shape of increased funding for the housing assistance payment. Furthermore, additional funding has been provided to the Department of Children and Youth Affairs to facilitate our children and young people in reaching their potential.

A high level of uncertainty still exists in relation to Brexit. It is an event which under any circumstances is unfavourable for the State. That is why we need to be careful with our public finances. We also need to put in place plans like the future growth loan scheme for small and medium-sized enterprises, SMEs, and the agriculture and food sector.

Overall capital expenditure will amount to €7.3 billion this year. This represents an increase of approximately €1.4 billion on last year's outturn. This will play an important role in delivering public infrastructure across Ireland, particularly in areas such as housing, education, healthcare and transport. Additional funding is being provided for enterprise supports to support economic recovery and promote jobs growth. Increased funding is also being provided to support investment in areas such as flood defences and climate change mitigation.

This allocation to capital infrastructure is consistent with the national development plan and Project Ireland 2040, which set out a ten-year investment of approximately €116 billion. As recent events have clearly demonstrated, to protect this investment we must put the right structures in place to deal with capital cost overruns. In light of this, new procedures are now being developed in the context of the ongoing review of the public spending code and the new medium-term strategy of the Office of Government Procurement. The allocation of these resources provides investment to build our economy and support our long-term growth. Passage of these Estimates will allow the House to put in place the funding that we need to maintain current services for our State and provide support to citizens in the areas the House has committed to.

Deputy Barry Cowen

As we know, these Estimates were discussed before being put before the relevant committees and are now before the House again for its expected approval. I acknowledge that. It is pertinent that this is happening in the week that the PricewaterhouseCoopers, PwC, report was published. In that context I looked up the mission statement for the Department of Public Expenditure and Reform, which is "To serve the country, its people and the Government by delivering well-managed and well-targeted public spending, through modernised, effective and accountable public services".

One would have thought that the PwC report would reflect or confirm that this Department was all over the national children's hospital project. It is the Department charged with responsibility for ensuring that the taxpayers' money is dealt with appropriately, as per the mission statement. However, the Department is only mentioned twice in the report; in the glossary and when the Minister was informed about the overrun after the event. That does not reflect very well on the Department's role or its mission statement. The Department is quick to take responsibility for high-vis jackets and shovels when projects are announced, but it has been twice as quick to hide behind the contract committee, a subcommittee of the National Paediatric Hospital Development Board which decided on a split contract.

It was the Minister's job to take on board, analyse and scrutinise the board's recommendation. It appears there was a failure there. There was a failure in the contract committee's decision and a failure on the part of the Minister and his Department, which did not adequately analyse or scrutinise that recommendation. It was accepted verbatim.

The Minister can respond if and when he wishes, but it is patently obvious to me that there was a glaring failure on the part of the contracts committee which was compounded thereafter when the matter was referred to the Minister, as it was his responsibility to adhere to the board's wishes.

I will pick some phrases from the PwC report that leap off the pages. They include "significant failures", "a lack of sufficiently comprehensive or robust planning", "poor at all levels of governance structure", "red flags were missed", "contained material errors and did not adhere to the public spending code", "poorly co-ordinated and controlled", "weak and inadequate", "unstructured", "fragmented" and "lacked key information", yet we have no accountability. It is essential that the recommendations made in the report be implemented swiftly and measures put in place to address a further risk of cost increases.

We face into another significant project, another responsibility borne by the Minister, in the provision of broadband. When I asked two questions in recent weeks, I received contradictory answers from the Minister and his colleague, the Minister with responsibility for the project, Deputy Bruton. The Minister said initially that he would carry out due diligence, but now I am told that he is not adhering to his own commitment in that regard. What is the Department's role if it cannot live up to its own mission statement? Clarity is required at this early stage on the Minister's involvement in the due diligence process in the preparation of contracts for the remaining bidder in the provision of broadband. Given what is clear in the PwC report and the extracts I quoted, it is essential that we do not have a repetition of what happened at the national children's hospital. I received contradictory information in the responses I received to the questions I asked about due diligence being carried out by the Department of Communications, Climate Action and Environment and the Department of Public Expenditure and Reform. That matter must be clarified because the Dáil must ensure the lessons learned, to the tune of €100 million this year and €100 million for the next four years, will have a significant impact on many constituents who expect public capital programmes to be carried out in accordance with what was originally outlined in the 2040 plan.

Deputy Jonathan O'Brien

The Minister outlined what the moneys outlined in the Revised Estimates would be used for. I wish to focus on two areas, one of which is the increased provision for the housing assistance payment, HAP, scheme to account for 16,000 extra tenancies. While that is welcome, there is a downside to pumping more money into the HAP system which I believe is flawed. The number of people coming into my constituency office who are being evicted from HAP properties into homelessness is increasing. I am sure it is reflected across all constituencies. Issues arise with HAP tenancies that must be addressed by the Government. It is becoming commonplace for landlords to send tenants a notice to quit on the basis that their property is going to be sold or that a family member is moving into it. I can provide the Minister with evidence to show that properties are back in the rental market six months later, as family members have not moved into them and they have not been sold. Tenants have been evicted because of three loopholes, as I call them, and end up in emergency accommodation at great financial and social cost to individuals and the rents charged for the properties are hiked up. That is something which needs to be addressed.

I welcome the publication yesterday of the PwC report on the national children's hospital. It was appropriate that the Government published it at the earliest opportunity and I have read it. I disagree slightly with Deputy Cowen on his point about the role of the contracts committee. To be clear, it did not make the decision to implement the two-stage process. It was asked for an opinion on whether the development board could use such a process. It outlined all of the pros and cons in undertaking the project over a two-stage tendering process and they were outlined clearly in the report. The decision to go down that road was made by the development board, not the contracts committee.

The oversight bodies that were put in place - the steering group and the programme project group - come in for some criticism in the report. The phrase being used is that they were hampered. They were able to assess the information coming from the development board, but they were not able to question a lot of the decision-making process.

The Government has asked for a number of weeks to assess the report and examine the recommendations made. I presume it will come forward with ways by which we can improve future capital projects. I have a number of questions. I hope we will have an opportunity to discuss the PwC report. I accept that the various committees will discuss it in the coming weeks, but it is important that Opposition spokespersons such as Deputies Cowen and Burton and I have an opportunity to sit down with the Minister and some officials to go through some of the issues raised. Fianna Fáil introduced legislation to strengthen the tendering, contracts and procurement process. We also introduced legislation. Rather than the Government automatically knocking back the proposals, it would be an ideal opportunity for us to meet the Minister and his officials to see if there were some good ideas. We all have a responsibility in that regard, not just the Government. With any other Deputy, I could be in government in the morning. We must ensure the processes and procedures we put in place will serve us well in the next 20 years and the lifetime of the national development plan. I urge the Minister to consider arranging such a meeting to examine the proposals each of us has to make and come to an agreement on how best to proceed to ensure we will not see another major overrun. That would be a good starting point.

Deputy Joan Burton

The Minister may or may not be aware that yesterday there was overcrowding on the train services from Kildare and west Dublin into town, so much so that by the time trains reached Castleknock people could not get onto them. I have taken up this matter for the past year and a half with the relevant people involved in transport services because, as more people go back to work, there is a greater demand for public transport. When I was a member of the Cabinet, electrification of the railway line was well advanced and on target to be at detailed planning stage now, but the project seems to have been put on the long finger and has not been included in the extended capital plan for the period 2020 to 2040. This morning when I was talking to commuters about their experiences yesterday, I had to say to them I had no idea when the Government intended to proceed with electrification of the Maynooth railway line. I wish I could tell them because when I was a member of the Cabinet, I was confident about the time horizon, but I am not any longer.

I travel to other cities where I see people taking double decker trains. In a carbon conscious world there are far more people using public transport, yet what we are offered in Dublin, to put it mildly, is a very confusing BusConnects report which is well intentioned, but it was a computer based survey carried out by engineers who did not know the city and had to learn about the questionable points made in the proposals from local people and public representatives. I have been excusing the Government on the grounds that it is very occupied by Brexit, but I am now very worried that the commitment to decarbonising the economy through better and more frequent public transport services is slipping behind. When the Minister and I were in government, we had the Luas line extended to Broombridge. We had the tunnel under the Phoenix Park reopened-----

Deputy Paschal Donohoe

Yes.

Deputy Joan Burton

-----something for which we had been asking of CIÉ for years. However, these achievements are now entering the realm of history. I do not know what to say to the people who could not get on a train at Ashtown yesterday and those who could not possibly get on it further down the line. For Heaven's sake, people could not get on the train at Castleknock because it was already packed. I went there this morning to see for myself what was happening. The Minister needs to send somebody to take a look at what is happening there.

On the national children's hospital, the suggestion is that it was a cost underestimate, rather than a cost overrun. I have to confess to working as an accountant in a previous life and given the client, it certainly sounds like the language they can take home to mammy or somebody like her to explain what went wrong without really explaining it. Does it mean that the State is a soft touch for firms of professional advisers in pitching for any cost increase for which they care to pitch? What are the implications for other projects? We know that hospitals are being built across the world. Recently I referred the Taoiseach to the new hospital being built and developed in Lisbon. It will cost a fraction of what it will cost to build the national children's hospital in Ireland. At various locations in America costs are very much lower. Obviously, I do not expect the Minister to be able to answer a question about broadband, but the all-singing, all-dancing broadband plan, replete with social media posts and videos, is due to be launched shortly and what are we to believe? In respect of current expenditure, not just capital expenditure in the Estimates, is it true that the Minister for Health, Deputy Harris, is already touting the idea that he may need an extra €1 billion by the end of the year? The figures, therefore, are continuing to climb.

Alongside this, the Minister is facing demands in respect of public pay and performance. He is promising to review the guidelines for civil servants on boards in order that we can receive more timely information. I do not know whether the Minister proposes to do this, but we need much more information. Otherwise, outside Brexit, this seems to be a Government that is adrift because we are moving further from the promises made in the capital plan in terms of implementation schedules. Costs are rising at a level which is frightening for many taxpayers in terms of what they will have to fund down the line. That is in dereliction of the first responsibility of the Government.

Deputy Thomas P. Broughan

Deputy Burton's comments remind me that the wonderful new stadium built by Tottenham Hotspur at White Hart Lane cost just over €1 billion which is perhaps half the cost of the new national children's hospital.

The introduction to the Revised Estimates mentions that they "have been supplemented with key performance information regarding programme outputs and impacts". We were also promised that information on key performance indicators would be provided in the 2019 HSE service plan and that a number of post-budget technical and policy adjustments would be included in the Revised Estimates. However, if we examine the expenditure of €66.6 billion in 42 Votes, while there is some useful information on the delivery of spending programmes, we will see the performance metrics for each Vote give little insight into the achievement of the strategy being pursued by each Department of State. That is particularly true for the €52.3 billion or 78% of total Government spending provided for in four key areas - Department of Education and Skills, Vote 26; the Department of Housing, Planning and Local Government, Vote 34; the Department of Health, Vote 38; and the Department of Employment Affairs and Social Protection, Vote 37.

The excellent Parliamentary Budget Office, in Paper No. 10 of 2019 on the Revised Estimates, notes, for example, that the modelling of retirements from the education sector is an ongoing issue which has required a Supplementary Estimate each year since 2014, yet the Minister has not addressed it. Also, there are issues with the European Social Fund and the capital budget accounting systems of the Department of Education and Skills.

I represent the constituency of Dublin Bay North which has about 7,000 households on housing and homeless lists. It has the worst total of any constituency or county. The critical metric of 10,000 citizens in emergency and homeless accommodation was passed a few weeks ago. The housing Vote is rising from a figure of €3.3 billion in 2018 to almost €4 billion in 2019, yet the housing output metrics on page 160 do not give any hint of how this sum can remotely address the ongoing suffering of the tens of thousands of citizens in dire need of housing, of which the Minister is very aware. There is an element of "housing solutions" about which we hear in the PR statements of Fingal County Council and councils in other counties when, as my colleague said, it actually refers to the housing assistance payment, HAP, scheme tenancies. The Minister has provided for a further 17,000 such tenancies in the Revised Estimates.

Since its inception, the Parliamentary Budget Office has, rightly, drawn attention to difficulties in measuring and assessing Vote 38 for the Department of Health and, in particular, the problems in reconciling expenditure incurred under the HSE national service plan with voted expenditure and the annual use of Supplementary Estimates. Expenditure is projected to be €16.6 billion, or just over €17 billion taking account of appropriations-in-aid of €405 million. Much of the increase seems to be related to the acute hospitals sector. I hope we will see the results of that expenditure on the ground. It is not clear if the first charge is dealt with in the 2017-18 budget and the carryover to 2018-19. Also, as we do not yet have the 2019 national service plan, how exactly can the Vote work?

The austerity Governments have held Vote 37 for the Department of Employment Affairs and Social Protection virtually static since the crash. It now stands at €10.6 billion, €200 million less than in 2018. With the inclusion of the Social Insurance Fund, the figure is approximately €20 billion, the same it has been throughout the austerity era. The Parliamentary Budget Office has drawn attention to the Christmas bonus. Why does the Minister not mainstream it as basic income at Christmas time for citizens on lower income and not leave it to the whim of the Government?

Yesterday, at the Committee on Budgetary Oversight, I asked the Chairman and committee members to respond vigorously to the report of the PwC consultants on the outrageous escalation in the cost of the national paediatric hospital. I asked the Minister to come before the committee and understand he will do so shortly. At long last, we might see the Secretary General of the Department of Public Expenditure and Reform, Mr. Robert Watt, also talking to the committee. I asked specifically that the committee focus on the reason the so-called red flags in respect of the runaway cost of the project were not noticed or acted on by the Ministers for Finance and Public Expenditure and Reform, their Secretaries General and senior staff since about 2013. It is incredible that at management committee meetings - there was an item related to risk on the agenda for every meeting - the Minister was not raising his own red flags virtually each month on the biggest infrastructural project in the State until we come to build the metro. It is astonishing that the Minister for Health, Deputy Harris, said nothing to the Minister for three or four months about this incredible elephant in the room. Many of us worked in the construction sector earlier in our lives. Almost all of us have been on building sites, but probably the most experienced Deputy in that regard is Deputy Wallace. He made a powerful and cogent case yesterday for a retendering process the completion of the project at St. James's Hospital, with bills of quantities based on clear, transparent and detailed architectural and engineering designs. The Minister could try to fix this problem.

We have all watched the proceedings in the House of Commons in the past three or four months.

If they were in the House of Commons, this Minister, Deputy Donohoe, and the Minister for Health, Deputy Harris, would be gone. There is no question about that. The least the Minister can do now is try to fix and curtail it. As the Taoiseach, Tánaiste and the Minister like to point out, we have not spent the vast bulk of this money yet. We can do it better, and the Deputy who is probably the most accomplished person in this area, even though many of us have experience in the building sector, made a strong case. We have had the revised Revised Estimates, or whatever they were called, and €75 million has been lost by other bodies.

With regard to the capital budget, the Parliamentary Budget Office, PBO, has suggested a capital reserve and a move to programme logic model analysis. Those are two suggestions the Minister's staff might examine for coming years.

Minister for Public Expenditure and Reform (Deputy Paschal Donohoe)

I thank the Deputies for their contributions and I will respond to the points they made. First, as was acknowledged by Deputy Cowen, these Estimates have gone through their relevant committees. I took the Estimates for both of my Departments to the committee a number of weeks ago and my colleagues did the same with theirs. That means all the Votes in these Revised Estimates went through detailed scrutiny on the many different points that have been raised by Deputies today.

Second, with regard to the discussion that is under way about Ireland 2040 and the national children's hospital, while of course the Deputies and I will always point to what must be improved or changed, as Deputy Burton did, we should also give a degree of recognition to the fact that this is a plan that this year will deliver 6,500 new homes built, 90 new schools, 18 new primary care centres and three major road projects across the State. It is understandable that the House would focus on the great difficulties and what went wrong with the national children's hospital, and the PwC report will be discussed further in the House next week, but I also wish to recognise the progress that the plan is making and the difference it is making to communities and citizens at present.

A further point was made about oversight of different Votes and the status of those Votes. Deputy Broughan referred to the Vote for the Department of Employment Affairs and Social Protection. In deciding that the Vote is flat the Deputy was using as his benchmark the budget of a number of years ago, during a difficult period when the then Minister, Deputy Burton, had many challenging choices to make. In that period Deputy Burton ensured that the social welfare payments for many hundreds of thousands of people who were unemployed did not go down. The Deputy is now evaluating this Vote at a time of almost full employment against a point when we had an unimaginably high level of unemployment. He has to compare that Department's Vote in the context of what was happening in the labour market with joblessness at the time.

Deputy Jonathan O'Brien raised a point about procurement, and I am aware of the number of Bills the House is putting forward in this regard. Officials from my Department met the Deputy to discuss his Bill. They pointed out to the Deputy that we have a genuine difficulty with some areas of the Bill. However, if colleagues, including Deputy O'Brien, wish to be constructive on this and to see if we can build a consensus on whether legislative change is needed in our procurement strategy, I will be happy to meet them and I will do so after Easter to have a discussion about it. One of the many things I have learned about procurement policy is that changes in one area can have many different unintended consequences. I would like the opportunity to talk to the Deputy, and any other Deputies who wish to join us, about that.

Deputy Cowen raised a number of questions about the national children's hospital. I will be discussing this in the House again next week. I have discussed it with the Committee on Finance, Public Expenditure and Reform, and Taoiseach, and I am due to appear again before the Committee on Budgetary Oversight next Thursday, which might provide an opportunity to discuss it further.

Deputy Burton pointed to the progress we have made in public transport. I am pleased to have been part of a Government that brought the Luas to Cabra and made changes to the Phoenix Park tunnel. The Minister for Transport, Tourism and Sport, Deputy Ross, is involved in many big and positive changes in public transport and he has secured a very high level of funding for that Department. I accept there are difficulties due to congestion and how busy the train and Luas carriages are, but that is the reason I am asking the House to support these Revised Estimates. They contain funding and resources that can make a difference to these problems in 2019.

Finally, in response to Deputy Broughan, in any context or setting it is always great to hear him talk about White Hart Lane.

Votes put and agreed to.