JOINT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE díospóireacht -
Wednesday, 25 Oct 2006

Business of Joint Committee.

Chairman

Apologies have been received from Senators John Paul Phelan and Joe O'Toole. The first item on the agenda is the minutes of the meeting of 4 October 2006. The draft minutes of this meeting have been circulated. Are they agreed? Agreed. There are two items arising from the minutes. The first relates to an e-mail from the Irish Bankers Federation containing follow-up information after its appearance before this committee in July 2006. This is included in the correspondence information. The other item is an e-mail from a private company called Home Instead regarding VAT on care for elderly people in their homes and pastoral letters to the parties illustrating the issue and what needs to be done. We will deal with that under correspondence.

Everybody has received a voluminous list of correspondence. I will go through the schedule and try to get agreement. The first item is 2006/516, an acknowledgement from the Minister for Social and Family Affairs of representations on behalf of an individual, together with enclosures from Senator John Paul Phelan. We will refer this to the Minister and it is included in the acknowledgement. Is that agreed? Agreed.

Deputy Bruton

Perhaps the issue should be discussed when the Senator is present.

Chairman

That is fair comment. We will hold that over until he returns. The next item is the request from the Minister of State, Deputy Fahey, received on 3 October 2006 to allow time for a presentation from an individual regarding a stamp duty proposal for the charitable and sporting bodies sector. It was agreed at the last meeting of the committee to hear the views of the Irish Charities Tax Reform Group on the topic rather than a myriad of individuals and organisations with views on the matter.

The next item is 2006/518, a stamp duty proposal for the charitable and sporting bodies sector. It is another copy of the above and we have already agreed how to deal with it. The next item is 2006/519, an acknowledgement from the Minister for Finance, Deputy Cowen, regarding representations on behalf of an individual by Senator John Paul Phelan. We will hold this item over. The next item is 2006/520, a progress report received on 4 October 2006 on decentralisation. This can be circulated to committee members but it has been up for public discussion in recent weeks. It was published on 4 October 2006.

Deputy Bruton

The committee previously decided that it wanted more regular reporting on relevant performance indicators in respect of this programme. This has never happened. I wonder what happened to our request for this.

Chairman

The request was passed to it and all we receive is the decentralisation implementation group's report when it presents it to Government every three or four months. It does not seem to issue monthly reports, even though we have asked for them.

Deputy Bruton

I do not wish to get into a discussion on this matter but it strikes me that problems exist. The Office of Public Works is buying or committing to a considerable amount of property solutions and we are hearing about many problems surrounding implementation, particularly in respect of State bodies. We should have a more staccato report so that we can monitor what is going on, both from the perspective of wanting to see this programme work but also being conscious that we do not want the State to commit to money for what proves to be a white elephant in the longer term because the ducks were not in a line when the property commitments were made. The committee needs to receive more timely information if it is to have any role in the process. I have received this already and it was circulated all over the place. The committee is not playing an effective role in the process at the moment.

Caoimhghín Ó Caoláin

Did the Chairman refer to the Minister? Was it a slip of the tongue or was it prophetic?

Chairman

That is all right.

Deputy Ó Caoláin

The Chairman should get comfortable with it.

I asked the Taoiseach this morning why this is the first year we do not have the progress report on the implementation of the decentralisation programme. I beg the Chairman's pardon. My point relates to a second matter of which this would be a part, in terms of the programme for Government. I will park that point if I may.

I concur with what Deputy Bruton said regarding the absence of an opportunity to engage with the decentralisation implementation group. It is important that we would get an occasional opportunity to do so, and not only to be in receipt of a series of missives. While additional information is provided over and above that which we have traditionally received, it is important that we get an opportunity to address the slow progress of the roll-out of the promised decentralisation. Key questions would include the fact that this report highlights very little take-up by that body of people described as "expert" within the various Departments. We need to be able to tease out that issue.

We also need to analyse the expectation shown in this report that up to a further 2,000 employees of the Civil Service and State agencies will be relocated by the end of 2007. We note that of the 7,000 that were signalled as willing to take up the original 10,000 places mentioned by the former Minister for Finance, of the order of some 500 placements have been rolled out to date. Significant areas remain to be addressed and important questions must be posed. We should invite the decentralisation implementation group to come and meet the committee at the earliest opportunity so we can address these important matters.

Deputy C. Murphy

One particular item on page 5 relates to arrangements in regard to Dublin. Many of my constituents work in Dublin and some of them are seeking to decentralise. Little snippets of information can be gleaned and I am most alarmed at what I hear. The information we received is similar to what I already got in reply to a parliamentary question. It does not state much other than that there is a problem and some difficulties with matching the timing.

I have heard from constituents that the Dublin list is closed. In one case a decentralised job has been secured but there is nobody to fill the job in Dublin. People do not know whether to sell their house or get their children into school in the decentralised location. They do not know the timeframe involved. One can imagine the impact that has on morale in the public service. It must be incredibly low. This is a serious problem. It appears that there are extraordinary problems in regard to timing and that nobody wishes to remain in Dublin. It was my understanding that many people wished to remain in Dublin. This information must be closely analysed because if that aspect of the programme does not work, none of it will work.

Deputy P. McGrath

I thought we were to get regular updates on decentralisation. I am disappointed. It is not good enough that bodies such as this do not implement commitments made to report back to us on a regular basis and it should be noted.

The report we received today is less than comprehensive. Previous reports indicated timeframes. Some items have fallen off the table and are not accounted for in this report. Regarding my town, the example I know best, we were told the site was almost secured and that it would be in place in the second quarter of 2008. I recently read in the local newspaper that the site deal has fallen through and progress is dependent on coupling the project with other places such as Carlow and Portlaoise under PPP. New negotiations are taking place and it will be well into 2009 before anything happens.

Such matters should be covered in any report made to this committee. However, they are not. In that context, it is not good enough. We all listened with our mouths open three years ago when we heard 10,000 jobs would be relocated around the country within three years. Those three years will be up in December. Now, we hear in many instances it will take another three years and what is happening is unclear.

We must bring the group before the committee as a matter of urgency and ask it to update us on this matter. I do not know how quickly the Chairman can request the group to come before the committee. The group must take note of commitments given in previous documentation to this committee and explain why the slippage occurred.

Chairman

Is it agreed that we invite in the Chairman of the decentralisation group? Agreed. The group has not been before the committee for quite some time. We will arrange that between now and December.

Deputy Cregan

I would welcome the opportunity to discuss the issue with the chairman of the group. In my constituency, commitments were made to decentralise 50 staff of the Revenue Commissioners. They were placed in temporary accommodation in Limerick city while awaiting new accommodation in Newcastle West. However, temporary accommodation was available in Newcastle West. We were told they were based in Limerick for training. They have been there for several months and I presume they have received any training they required. They should be moved to where they are supposed to go immediately.

Chairman

Is it agreed to invite the group in? Agreed. We will set a date during this session.

Item 521 concerns a statutory instrument and will be taken with item 522, an acknowledgement from the Department of Finance for correspondence regarding that statutory instrument. We sought more information at the last meeting. Is it agreed to note the correspondence? Agreed.

Item 523 is an acknowledgement from the Department of Finance dated 28 September for correspondence requesting a report on taxation matters relating to the provision of services for the elderly and disabled in their own homes. We sent that to a few groups and when we receive all replies we will discuss it. Is it agreed to note the item? Agreed.

Item 524 is a letter from the Minister for Finance, Deputy Cowen, informing us the Government has decided to take steps to improve the efficiency of the expenditure review initiative. I am sure spokespersons saw a copy of that letter separately during the past week or two.

Deputy Bruton

On behalf of my party, I regard it as a hopelessly inadequate response to this issue. The Minister outlined a programme of 92 value for money studies, 31 of which were previously announced to have been done in 2002, four years ago. The two big spenders, including the Department of Health and Children, received exonerations from carrying out any value for money scrutiny. The last study done by the Department of Health and Children was in 2001 and it will not produce another one until 2008. In that seven-year period, €80,000 million of taxpayers' money will have been spent with no value for money appraisal. I cannot bring myself to suggest this takes the issue of value for money seriously.

When the programme was introduced — it came about as a result of the 1997 Act on public service reform — the idea was that the entire programme of public spending would be reviewed on a three-year rotation basis and that we would effectively examine and assess value for money for one third of total State spending each year. The programme, on its greatest ambitions, will deal with 3% of total spending, less than one tenth of what was intended. However, much of even that meagre one tenth involves bogus work that should have been done three or four years ago. Perhaps I am one of the tiny minority interested in serious evaluation of programmes, whether we are getting value for money, holding people to account and applying objective tests to the way we spend money, but this is not adequate. Using rhetoric about value for money and the other guff in the programme does not square up.

When the Secretaries General came before the committee, they were shamefaced at their failure to deliver their own review programmes. They indicated that when Secretaries General failed to implement such reviews, there were no powers to implement any sanction against them. Until some Minister decides there will be proper reviews and sanctions for officials who fail to act upon their findings, this will continue and we will have reports such as this, giving an appearance of activity that is entirely without substance.

For my penny's worth, the programme does not deserve even one quarter of a cheer. It is a major step backwards from its ambitions.

Chairman

Does the Deputy have a proposal with regard to the item of correspondence?

Deputy Bruton

My proposal would be to reject this and ask the Minister to introduce a proper programme of expenditure review that will fulfil the ambitions set more than ten years ago, when this programme was to be an integral part of the way strategic plans would set priorities and clear objectives for public spending, and implement effective reviews of how those plans were achieving objectives. That was the ambition but it has fallen off the table.

Deputy Finneran

Not too long ago the Minister came before the committee and answered questions for a long period on all areas of expenditure. This is an issue that is trotted out time and again by Opposition spokespersons. For a long time there was a false claim about waste, which has now been discredited. Most major public contracts not alone come in on time but under budget also. The facts are available to everybody. The claim that the Government is not meeting its targets is a smokescreen. It is the only way an attack can be made on the Minister for Health and Children, the Minister for Finance or the Department of Finance. What is wrong with the letter?

Deputy Bruton

I will explain if the Deputy wishes, but I do not want to——

Chairman

This is not a debate on the topic.

Deputy Bruton

No, but I will explain if the Deputy wishes. If one considers the programme, whenever it uses the term "rollover", it is referring to projects or evaluations that should have been completed in 2002 or 2003. Three or four years on the Minister is presenting the projects as if they are a fresh, new impetus to value for money. This is a failure of the system to do what it claimed it would do in a programme that ended in 2004. The projects are being presented afresh as if they are something new.

The Department of Health and Children has not done anything. It argued that because it was reforming the health system, it should carry out no value for money evaluations. It is when one is making changes that one must make sure one is spending wisely and doing the right things. We will have spent €80 billion in the area of health without any evaluation. The same is true of the Office of Public Works. It opted out of any evaluation because it claimed it was undertaking decentralisation. It is when a body is undertaking a major change such as decentralisation that it needs proper evaluation to ensure it gets value, buys sensibly, makes sensible commitments and has a sense that there are proper performance indicators, that it is honouring and delivering on them. I know there is a political point to be made, which Deputy Finneran will seek to make. The Minister appeared before the committee recently to speak about the national development plan. We are discussing the ongoing current programmes of spending, not new capital investment and the national development plan. If the positions were reversed and I was the Minister presenting this, Deputy Finneran would be first in line to describe it as shallow, a sham and not representative of the ambitions of the committee in evaluating public spending. I do not seek a political debate because it could take all night. This does not square up to our ambitions.

Chairman

In the interests of clarification, three value for money reports, Nos. 65, 66 and 67, deal with the Department of Health and Children and will be considered in 2007 and 2008. Deputy Bruton refers to the Office of Public Works, about which two value for money reports, Nos. 74 and 75, are included in our schedule.

Deputy Bruton

When will we receive those reports?

Chairman

The first will be presented in December 2007 and the other in 2008.

Deputy Bruton

In other words, we will not have any evaluation of the Department of Health and Children until 2008. Is the Chairman satisfied that this represents a serious attempt to ride shotgun on health spending? We will see nothing from a Department which will have spent €80,000 million of our money in the seven years from 2001.

Chairman

The Committee of Public Accounts has dealt with the issue of value for money in the Department of Health and Children every second quarter for the past five years. There are other fora for considering value for money. I know of a few such reports by the Comptroller and Auditor General.

Deputy Bruton

If the Chairman is arguing that the expenditure review is redundant and should be left to the Committee of Public Accounts, I do not agree. This was supposed to be integral to how Departments spent money. It was not dependent on the Comptroller and Auditor General catching out Departments, nor on Deputy Fleming and the Committee of Public Accounts identifying areas of waste. This was to be an integral part of the way in which Departments set targets, monitored spending and were independently evaluated. The latter has been abandoned. We saw the Departments' reports for the period 2002-04 in which it conducted 14% of the commitments made. Secretaries General admitted evaluations carried out had made no impact on spending and that they could not get Departments to carry out work to which they were committed. I do not wish to rewrite what the committee has heard on a partisan basis, but this is not acceptable. I would state this even if the Minister was a member of my party. This is not the ambition of the programme and we should not accept it.

Chairman

We will note the correspondence, as well as Deputy Bruton's comments.

Deputy Bruton

The Minister knows my views.

Chairman

The Deputy will have other opportunities to raise the matter.

Deputy C. Murphy

The point was made that this should be rejected. Noting it is soft in comparison and I support rejecting it. The committee is being asked to take matters at face value. Insufficient detail is provided in the review of the motor taxation on-line initiative of the Department of the Environment, Heritage and Local Government. The take-up of the scheme is great in some areas and appalling in others. There is merit in what has been stated about scrutiny from the point of view of achieving value for money.

Chairman

Of the 92 reports listed, 43 are scheduled to be submitted by the end of this year.

Deputy Bruton

Some 31 of those were supposed to have reported in 2003.

Deputy Finneran

There is a commitment for 43 reports by the end of the year.

Deputy Bruton

The Chairman is being disingenuous. This was supposed to be a three-year rolling programme in which we examined all programmes of public spending. We have reduced it to a three-year rolling programme that will examine only one tenth of the original ambition and of that one tenth, one third of those are bogus because they should have been done three years ago. It is being pared back and the attitudes of Secretaries General to the obligations to do this work have not changed. They do not want to do it, they will not do it and nobody is making them do it. We continually roll back our ambitions because it is not happening. Instead we should tell people that if this does not happen, the Estimates will not be passed and their administrative budgets will be cut by 3% for every year they fail to deliver this material. This is important. We want to see programmes delivered to the clients for whom they are intended and we want to see that independently evaluated. We should say that the administrative budget of each Department that fails to deliver will be cut each year until they deliver. They would then sit up and take notice. This would benefit not just the Opposition but everybody.

Chairman

These reports across all Departments are to be considered by each of their respective Oireachtas committees. This is just one of the 12 or 14 committees. It is not our job to examine the detailed reports.

Deputy Bruton

It is our job to ensure the framework operates and delivers, but it has failed. This is not an adequate way to address the failure of this framework for ten years.

Chairman

Do members wish to hold this issue for a more detailed debate on another day?

Deputy Finneran

We have a programme to deal with 43 of these reports out of 92 this year. I agree with the Chairman's suggestion that we note this report and move on.

Chairman

We note it and move on-----

Deputy Bruton

I oppose the motion.

Deputy Finneran

In addition, we are approaching a general election.

Deputy C. Murphy

Does Deputy Finneran agree that waste of money is acceptable?——

Deputy Finneran

I do not agree with waste of money.

Deputy C. Murphy

That is what he is saying. Without adequate scrutiny——

Deputy Finneran

That is not what I am saying. Deputy Catherine Murphy should not try to misrepresent me. We have 43 reports to deal with this year and we should get on with it.

Deputy Bruton

This is a democracy. The Deputy might not like it, but people do not agree with him.

Chairman

Is it proposed that we do not want to see the 43 reports?

Deputy Bruton

It is proposed that this report be rejected and that we request that the Departments submit a proper set of value for money evaluations that impact a sufficient volume of their work to ensure they represent a real contribution to ensuring that we are delivering performance in critical areas. This report does not represent an adequate response to the requirements and should be re-done. We should see what they come up with. There should be sanctions for failure to carry out these evaluations, which has never occurred. It is unacceptable that 85% of the reports in the last review were not undertaken. Nobody was sanctioned for that.

Chairman

We have an item of correspondence from the Minister asking us to bring the letter to the attention of the other members of the committee and my only role is to bring it to their attention. Whether they agree with the content is their own concern.

Deputy Bruton

I propose that we reject the Minister's report and say it is inadequate.

Deputy C. Murphy

I agree with Deputy Bruton.

Chairman

I will complete the rest of the correspondence and will revisit this issue at the end.

Deputy Bruton

The Chairman should take it now.

Chairman

There might be three or four more issues in the correspondence which people oppose. I propose to put one composite vote at the end of the correspondence.

Deputy Bruton

The Chairman cannot do that.

Chairman

I can.

Deputy Bruton

The Chairman cannot put a composite vote. If there are different views on other pieces of correspondence we should make our decisions on those separately. We cannot have a composite vote saying that every piece of correspondence will be treated in the same way.

Chairman

There is a proposal to note the correspondence.

Deputy Finneran

I propose that we note the contents of the Minister's correspondence and continue with our programme of dealing with the 43 reports over the year.

Chairman

Is that agreed? I will put that to a vote but, rather than interrupting the business as we go along, I will defer the vote until we clear the rest of the topics on the agenda.

The next item on the agenda is 2006/525, the autumn issue of Action on Poverty Today received from the Combat Poverty Agency. Members have received copies of that. The committee will note it. Item 2006/526 is a letter from Mr. Eddie Sullivan, Secretary General, with attached note of background and terms of the retirement gratuity scheme for branch managers. Members may want to send that to social welfare branch managers in their area. Item 2006/527 is a faxed report received from the Department of Health and Children regarding the provision of services for the elderly in their own homes. We are awaiting other items of correspondence on the topic of VAT on home help services. We will consider the matter when we have received all the replies. Item 2006/528 is an e-mail from the central decentralisation unit dated 5 October. We have already covered decentralisation. The committee will, therefore, note that. Item 2006/529 is a letter from the clerk of the Sub-Committee on European Scrutiny. No proposals have been referred to this committee for its consideration. Item 2006/530 is an invitation to the conference Recent and Pending Cases at the ECJ on Direct Taxation. Does any member have an interest in attending that conference? The date of the conference is February 2007.

Deputy P. McGrath

Where will it take place?

Chairman

In Vienna.

Deputy P. McGrath

I may be interested in attending that.

Chairman

We will put it on the agenda to get approval for travel at the next meeting. We will ask the Whips to find out how many members are interested and decide on the numbers to attend at the next meeting.

Item 2006/531 is a report from the joint committee meeting of the European Parliament and the national parliaments on the role of budgetary control held in Brussels. That conference has taken place. No member volunteered to attend. Item 2006/532 is an e-mail from Mr. Kevin Leydon regarding the visit of the equitable life committee in London to gather evidence. I suggest we note that e-mail. Item 2006/533 is an e-mail from Fingal Development Board regarding a conference on sustainable airports development. The attachment file was corrupted so I propose requesting a further copy and it will be included on the agenda for the next meeting. Item 2006/534 is an e-mail from Mr. Kevin Leydon, an invitation to attend a workshop on the role of national fiscal rules and instructions in shaping budgetary outcomes. It appears to be aimed at officials rather than elected members. I suggest we note that and move on. I think that was the last item.

Deputy Ó Caoláin

There are additional ones.

Chairman

Item 2006/535 is an e-mail from an individual in regard to tax proposals in respect of the charity and sporting bodies sector involving the donation and re-distribution of credit card stamp duty to charities and sporting bodies. We have decided to invite the Irish Charities Tax Reform Group to discuss that. Item 2006/536 is a reply from the Department of Finance to a request for information regarding SIs 447, 448 and 449. That is for the information of members. The committee will note it. Item 2006/537 is a request from Senator John Paul Phelan that a delegation from a representative body in Kilkenny be heard on the matter of pension entitlements. Deputy Bruton has requested that we defer consideration of that topic until the Senator is present. Item 2006/539 is an e-mail from Mr. Kevin Leydon regarding the 18-month programme of the German, Portuguese and Slovenian Presidencies of the EU. The committee will note that.

Deputy Ó Caoláin

I have a question in regard to that.

Chairman

I did not read the entire document. The Deputy should not be too hard on me.

Deputy Ó Caoláin

Perhaps the Chairman can reply off the top of his head. Is there a precedent for a joint programme covering a period greater than six months? Is this a first, is it unique?

Chairman

The Presidency is always operated on a Troika basis involving, the outgoing, current and incoming Presidencies. Foreign Ministers do this all the time.

Deputy Ó Caoláin

Was the programme for the Irish Presidency based on a joint document drawn up with the preceding and subsequent administrations?

Chairman

I do not know. I will find out for the Deputy and communicate with him in that regard.

Deputy Ó Caoláin

I am curious to know if that was the position.

Chairman

As the committee secretariat does not know the answer to the Deputy's question, we will correspond on the matter with the appropriate body and will circulate a copy of the reply to him.

Deputy Ó Caoláin

Thank you.

Chairman

Item 539 is a report from the Department of Finance and Revenue regarding taxation matters for the provision of services to the elderly in their home. We will consider this issue when we have received all the relevant documents.

We return now to document 2006/524, a letter from the Minister for Finance, Deputy Cowen, dated 5 October 2006 informing the committee that the Government has decided on a number of steps to improve the efficiency of the expenditure review initiative. Is the proposal to note the correspondence from the Minister for Finance, Deputy Cowen, dated 5 October 2006, agreed?

Deputy Bruton

No.

Question put: "That the correspondence be noted."

The Committee divided: Tá, 8; Níl, 5.

Tá

• Deputy P. Carey,
• Deputy J. Cregan,
• Deputy M. Finneran,
• Deputy S. Fleming,
• Deputy M. Hoctor,
• Deputy J. McGuinness,
• Senator M. Mansergh,

Níl

• Deputy R. Bruton,
• Deputy J. Burton,
• Deputy P. McGrath,
• Deputy C. Murphy,

Question declared carried.

Chairman

The next item on the agenda is No. 3, EU scrutiny reports. We can deal with them very quickly. As a formality we need to complete the reports by approving them. This should have been done 12 months ago.

No. 10, COM (2004) 227, was discussed on the 5 April 2005; No. 11, COM (2004) 641, was discussed on 6 April 2005; and No. 12, COM (2004) 728, was discussed on 6 April 2005.

Deputy Ó Caoláin

They deal with excise duties and value added tax.

Chairman

Is it agreed that the reports be approved and noted? Agreed.

Sitting suspended at 4.02 p.m. and resumed at 4.04 p.m