I am the principal officer in the public expenditure division responsible for the Department of Education and Science Votes. Accompanying me today is Mr. John Conlon, assistant principal. I apologise on behalf of Mr. Jim O'Brien, the Assistant Secretary in this area who is abroad on annual leave.
We are glad to try to assist the committee in its examination of the agreement with religious congregations on their contribution to the residential institutions redress scheme and the indemnity they received in return for that contribution. As the committee will be aware, the Department of Finance was involved with the lead Department, the Department of Education and Science and the Attorney General's office at different stages in the process leading up to the agreement, particularly up to 16 October 2001 when negotiations between officials and the religious congregations came to a standstill and after 30 January 2002 when the Minister for Education and Science announced that he had reached agreement in principle with the religious congregations.
It may be useful to briefly place the issue of compensation for victims who suffered abuse while resident in residential institutions in the overall policy context. As the committee will aware, the policy background is that on 11 May 1999 the Taoiseach made an apology to the victims of childhood abuse and went on to outline a number of measures, including the setting up of a commission on childhood abuse. The Commission to Inquire into Child Abuse Act 2000 became law in April 2000. In October 2000 the Government agreed in principle to establish a body to compensate people who as children were victims of abuse while in the care of institutions in which they were resident and in respect of which the State had regulatory or supervisory functions. In February 2001 the Government approved the proposals for a compensation scheme.
As the committee will be aware, the Residential Institutions Redress Act which brought that scheme into effect and provided for the establishment of the Residential Institutions Redress Board, was passed by the Oireachtas in April 2002. Both the Commission to Inquire into Child Abuse and the Residential Institutions Redress Act were sponsored by the Minister for Education and Science, who is the Minister with policy responsibility in this area. It is clear that the residential institutions redress scheme was a major part of this general approach to try to bring some healing and closure to the victims of child abuse. The Department of Finance would of course have had an input in the normal way by providing observations - and briefing notes for the Minister for Finance - on the various memoranda for Government. That is those dealing with the approval in principle of the redress scheme on 3 October 2000, the Government approval of the proposals for a compensation scheme in February 2001 and subsequent submissions to Government as part of the process of having the redress Bill published, and enacted.
The role of the Department of Finance in this matter was consistent with its general role of advising the Minister and Government - by way of observations on memoranda for Government - on the financial aspects of policy proposals from line Departments. In January 2001 the Department of Education and Science invited the Department of Finance to participate in a group of officials - also including officials from the Department of Education and Science and the Attorney General's office - for discussions with representatives of the religious congregations on the question of a contribution from the congregations towards the proposed redress scheme. This group of officials, which was chaired by the Department of Education and Science, met representatives of the religious congregations, and a senior counsel advising them, on a number of occasions during the period 7 February 2001 to 26 June 2001 and again on 16 October 2001. The purpose on the official side was to explore whether the religious congregations were interested in making a contribution towards the redress scheme and, if so, the amount of such contribution.
It was clear within the officials group, and it was made clear to the religious congregations, that the final decision on whether or not to grant an indemnity on the basis of a contribution towards the redress scheme was to be one for Government. It was also made clear in those discussions that, as far as the official side was concerned, nothing was agreed until everything was agreed. The Minister for Finance wrote to the Minister for Education and Science twice during that period in relation to the contribution issue. His first letter, dated 7 March 2001, was in the context of the drafting of the heads of a Bill for the compensation scheme. In that letter, the Minister raised with the Minister for Education and Science the question of having the Bill drafted so as to limit the State's liability for awards under the scheme to a proportion - say 50% - and to limit a waiver by claimants on accepting an award to the State only in the event of the religious congregations deciding not to contribute to the scheme.
In late April 2001, the officials group sought clearance from their respective Ministers for the parameters of what would amount to a reasonable contribution by the religious congregations. This was in order to be in a position to react to any offer to be made by the religious congregations - which in the event did not happen until 26 June 2001. The group agreed to recommend to the Ministers that the minimum amount required in the context of a full indemnity for the religious congregations against claims relating to past abuse in residential institutions for which the State had inspection and supervisory functions would be 50% of the cost but that it would be subject to a cap to be negotiated but not one less than £100 million.
The Minister for Finance gave his approval to proceed on that basis on 27 April 2001. In the event, the offer made by the religious congregations on 26 June 2001 fell considerably short of £100 million. At that point, the Minister for Finance wrote a second letter to the Minister for Education and Science, dated 29 June 2001, to the effect that in his view the offer made by the religious congregations on 26 June 2001 fell considerably short of what would amount to a meaningful contribution in the context of a full indemnity.
The final meeting of the official group with the religious congregations took place on 16 October 2001. At that meeting the chairman of the group, the Assistant Secretary in the Department of Education and Science, informed the religious congregations that the group would be prepared to recommend an approach based on a fifty-fifty contribution and also to recommend to the Government that the contribution be capped at a figure of £100 million. In return, the participating congregations would receive a State indemnity against litigation in cases which come under the remit of the redress board.
The reaction of the religious congregations was that the gap between their offer in June and the minimum contribution of £100 million required was unbridgeable. No further meetings of the negotiating group took place. It is understood that the then Minister for Education and Science had further contacts with the religious congregations, who, we understand, consulted each other, and that on 30 January 2002, he informed the Government that he had reached an agreement with the religious congregations. He subsequently issued a press statement to the effect that he had reached an agreement in principle on the amount of a contribution and on an indemnity for the congregations concerned against all present and future claims arising from past child abuse which are covered by the Residential Institutions Redress Bill 2001 - as it then was - and that the Government had agreed in principle to the proposals.
The Department of Finance had no contact with the negotiations during the period from 16 October 2001 to 30 January 2002. Following the announcement by the Minister for Education and Science on 30 January 2002 that he had reached agreement in principle with the religious congregations, a Department of Finance official attended a meeting in the Department of Education and Science on 13 March 2002 on the modalities of advancing the agreement in principle announced on 30 January 2002. Representatives of the religious congregations with Arthur Cox, Solicitors were also present. The Attorney General's office was not present and an indemnity agreement was not discussed. It was decided that the Department of Education and Science would arrange a meeting between Arthur Cox and the Office of the Attorney General within the next week to tease out the extent of the indemnification.
A further meeting between officials of the Department of Education and Science, the Chief State Solicitors' office and the religious congregations took place on 12 April 2002. While the Department of Finance did not attend this meeting, Department officials discussed the matter with officials of the Department of Education and Science before and after the meeting and a minute of the meeting was forwarded to the Department of Finance.
Further meetings involving Department of Finance officials took place on 7 May 2002 with Department of Education and Science officials, at which issues to do with the property transfers part of the agreement were discussed; and on 16 May 2002 with officials from the Department of Education and Science and the Office of the Attorney General. At that meeting a number of changes to the draft text of the indemnity were discussed and subsequently carried through.
The Department of Finance also wrote to the Department of Education and Science on 29 April in regard to the property transfer part of the agreement, pointing out that in order to ensure maximum value for money for the State, all properties to be included in the contribution to the redress scheme should have full and clear titles and be capable of being economically utilised or disposed of commercially by the State. The inclusion of properties that will not be in full State ownership and may be transferred to non-governmental organisations run by other religious institutions does not ensure that the State will achieve optimum value for money from such property transfers. Subsequent to this letter, and during the course of the meetings to which I referred above, it was agreed that transfers of property to voluntary bodies which are registered charities established for purposes relating to general public welfare would be accepted. Such transfers must contain a covenant that for a period of 25 years from the date of transfer the transferee can dispose of that property only with the prior consent of the Minister for Finance.
The Department of Finance made observations on the draft memorandum for Government by the then Minister for Education and Science seeking Government approval for the agreement with the religious congregations and prepared a note for the Minister for the Government meeting which took place on 5 June of that year. A Department of Finance Assistant Secretary signed the indemnity, having secured the approval of the Minister of Finance, on 5 June 2002 on behalf of the Minister. It had earlier been signed by the Minister for Education and Science and by representatives of the 18 religious congregations.
At this stage it is difficult to estimate the overall cost of the redress scheme. The only information on the number and nature of cases at the time the agreement was signed was that available to the Department of Education and Science and the Office of the Attorney General. The Minister for Finance was not named as the defendant in those cases and therefore had no information on or access to the cases. When Government approval was sought by the Minister for Education and Science for the indemnity agreement in June 2002, approximately 2,600 cases were identified in which the State had been put on notice. In seeking approval it was estimated by the Minister for Education and Science that the final cost could be in the region of €250 million to €500 million.
The report of the compensation advisory committee, that is, the Ryan report, proposed compensation amounts of up to €300,000 for the most severe types of abuse, with the potential for a further 20% to reflect aggravated damages where appropriate. The Residential Institutions Redress Board, which is independent in the performance of its functions, has to date received about 1,300 applications for redress. The total number of applications will not be known until the board has completed its work, which, as members know, will take a number of years. Figures on which to base any revision of the estimate are not yet available.