SELECT COMMITTEE ON FINANCE AND THE PUBLIC SERVICE díospóireacht -
Wednesday, 20 Mar 2002

Vol. 5 No. 4

Estimates for Public Services, 2002.

Vote 10 - Office of Public Works.

Chairman

The purpose of today's meeting is to consider the Estimates falling within the remit of the Department of Finance. A proposed timetable for today's meeting was circulated to members. It allows for opening statements by the Minister of State and the Opposition spokespersons, followed by a question and answer session. Is that agreed? Agreed. I ask for members' co-operation in adhering to the timetable as we must conclude not later than 2.25 p.m. to allow another committee to commence at 2.30 p.m.

On behalf of the select committee, I welcome the Minister of State at the Department of Finance, Deputy Cullen, and his officials. The Minister for Finance, Deputy McCreevy, is at a Government meeting but will attend later. We commence with Vote 10 - Office of Public Works.

Minister of State at the Department of Finance (Mr. Cullen)

I am very pleased to introduce the Estimate for the Office of Public Works for the year 2002. As I have stated on a number of occasions previously, my principal objective when taking office as Minister of State with responsibility for public works was that the Office of Public Works should adopt a commercially-minded approach to its operations and in particular to enhance its customer service, provide a clearer focus on value for money and identify possible new areas of business activity.

As I come to the end of my current term of office, I am pleased to report that the Office of Public Works has made excellent progress in these areas. Deputies will be aware that our project management service was the first Civil Service body to achieve ISO 9002 accreditation in 2000. Since then, the architectural, structural engineering, hydrology and hydrometric services of the office have each achieved ISO accreditation and the Office of Public Works is actively pursuing accreditation for our other business units. The office has also won a number of architectural awards in recent years and one only has to look at Leinster House 2000, the new Millennium wing of the National Gallery and Farmleigh House, to name but a few, to see that the office is capable of producing work of the very highest standard. This highlights once again the quality and service-led ethos I sought to develop and which I believe is now being achieved. I am particularly proud of the advancements which have been made within the office over the past five years and I take this opportunity to commend the staff of the Office of Public Works and, particularly, its chairman.

The total amount being sought for the Vote is €380,631,000. The major portion of this expenditure is comprised of the accommodation programme for which I am seeking funding of €287,573 million. A sum of €188,593,000 is being allocated for subhead E, which relates to new works, alterations and additions, the largest element of the accommodation programme. The major areas of expenditure this year are €30 million on the provision of new facilities at Backweston for the State Laboratory and the Department of Agriculture, Food and Rural Development, €18.5 million for the office rationalisation and refurbishment programme, €17.3 million on the cultural institutions programme, €16.7 million on the Garda building programme, €15.3 million on the ongoing refurbishment of Oireachtas accommodation, €14.3 million on the social, community and family affairs programme, €12.1 million on the refurbishment of offices in the Glen in Waterford for the Revenue Commissioners, €9 million on the north side civic centre in Coolock for the Department of Social, Community and Family Affairs and €4.9 million for asylum seeker accommodation.

The new laboratories at Backweston will provide 12,500 square metres of accommodation and will incorporate a conference and library facility for use by the Department of Agriculture, Food and Rural Development and the State Laboratory. The Office of Public Works is examining a number of tenders for the construction of the laboratory and it is hoped to enter into contracts by the end of March, with contractors coming on site in April. Deputies will be pleased to hear that as part of phase 1 of a major refurbishment of Kildare House, construction of a gym and acrèche will be fast-tracked and is expected to be completed during the summer recess. Members will be aware that the development was not held up by the Office of Public Works, but by the use of the space by Oireachtas committees and facilities. The contract has been placed.

Chairman

We hope to be back in the House to use it.

Mr. Cullen

The current policy of the Department of Justice, Equality and Law Reform on asylum seeker accommodation is to provide system-built accommodation on greenfield sites. Such accommodation will be developed at two sites in 2002. A site at Dublin Road, Kilkenny, will be developed to accommodate up to 250 asylum seekers. Work there should commence in April and should be completed in autumn or winter. The hotel at Cork Airport is being developed to accommodate up to 450 asylum seekers and is due for completion thissummer.

The Office of Public Works has undertaken a very successful Garda building programme in recent years - almost €25 million has been spent in the past two years to provide new Garda accommodation, to carry out major extensions and to refurbish existing Garda stations. The design and construction of these works is of the highest quality and will offer excellent working conditions and facilities to Garda personnel. Many of the new stations will benefit from the provision of CCTV which contributes greatly to personal security. Major schemes completed include new residential and education blocks at Templemore and €5 million on new forensic and storage facilities at the Talbot premises in Santry. It is estimated that €16.7 million will be spent on Garda stations in 2002. Work on Garda stations in Blanchardstown, Clifden, Cobh, Kilrush, Kilmacthomas, Tourmakeady, Thomastown, Ballinrobe, Ballymore and Roundstone will be carried out this year.

About €81 million is sought for rent and rates. The Office of Public Works manages about 11 million square feet of office accommodation, of which about 23% is leased. Significant increases in property rents in recent years in response to market conditions are reflected in the fact that the Office of Public Works's rent reviews on Dublin properties are currently increasing by between 20% and 25% per annum. Nevertheless, in 2001 the average Office of Public Works rental in Dublin was still under €30 per square foot, which compares favourably with the average rent for prime third generation space of about €50 per square foot. Provincial rents are increasing proportionately in line with Dublin rents. Good quality space is renting at €18 to €20 per square foot in the rest of the country.

A provision of €17.907 million is sought for the purchase of sites and buildings under the Office of Public Works's accommodation programme, particularly for the Garda building and office purchase programmes. The decrease in provision compared to 2001 can be accounted for by the fact that the Office of Public Works bought the former offices of The Irish Press at Burgh Quay in Dublin last year as a one-stop-shop for immigration and citizenship, at a cost of €35.5 million. Property acquisitions by my office are part of its policy to purchase strategic properties and to acquire the freehold of properties held under long and onerous leases. Specific target properties are being identified on an ongoing basis. The purchase of such properties makes good economic sense given the high rental levels demanded in Dublin in particular. Proposed acquisitions in 2002 include sites for the Garda programme at Kevin Street and Bride Street in Dublin, Abbeyfeale, New Inn, Bantry, Cobh and Kilfinane

The other major programme in this Vote is that for drainage and engineering works for which €29.492 million is sought. This programme comprises arterial drainage maintenance, for which a sum of €13.8 million is being sought, and various flood relief schemes. The Office of Public Works is implementing the recommendations of the PricewaterhouseCoopers report to continue with arterial drainage maintenance and to prepare a programme of work to deal with the Office of Public Works' responsibility for bridges, embankments and drainage districts.

Following flooding problems in recent years, I reactivated an interdepartmental committee originally set up in 1995 to monitor the effects of bad weather. Arising from the committee's recommendations, I instructed the Office of Public Works to undertake a number of initiatives to contribute to addressing the flooding problem nationwide. The principal initiative is a major flood event mapping project to identify the location and extent of areas prone to flooding and this will continue in 2002. Deputies will be aware that the Office of Public Works is carrying out a programme of flood relief schemes in various parts of the country which are subject to periodic temporary flooding. The Office of Public Works sometimes co-operates with and provides support for local authorities in the preparation of flood alleviation proposals within their jurisdictional areas.

The flood relief programme will require €14.4 million in 2002. Local flood relief schemes completed in 2001 include Maam Valley in County Galway, Shinkeen stream at Hazelhatch in County Kildare and the River Bandon at Dunmanway in County Cork. Site works which commenced at Carrick-on-Suir are due to be completed by mid-2002, work which commenced at Kilkenny in September 2001 is due for completion in 2004, the schemes at Clonmel and Cregclare in south Galway have reached public exhibition stage and the scheme relating to John's river in Waterford city will go on display in 2002. A flood relief feasibility report into the study of flooding in Ennis was co-funded by the Office of Public Works and Clare County Council, and my office is examining the report.

Deputies will recall that the Government acted quickly to deal with problems suffered by people whose houses and business premises were affected by the flooding of 1 and 2 February and put in place a scheme of humanitarian assistance administered by the Irish Red Cross Society. I am glad the Government was in a position to respond quickly to assist unfortunate victims of flooding and the humanitarian assistance provided should help restore their lives to normality. When the Irish Red Cross Society submits its report, I intend to place a copy in the Oireachtas Library.

The Office of Public Works's administration costs are expected to amount to €30.237 million in 2002, representing 8% of the Vote or about 6% of the expenditure handled by the office. I thank members for their attention. I will be pleased to hear their views and will do my best to answer questions they may ask.

Mr. McGrath

Rather than make a statement, I would like to ask questions on a number of elements of the Vote.

Chairman

I will ask a question first.

Mr. McGrath

It is unheard of that a Chairman should jump ahead of members of the committee whom he is supposed to protect.

Chairman

I am learning. It took me a long time to learn from Deputy Jim Mitchell, but I have finally done so.

Mr. J. Mitchell

I agree with the Chairman as he is our leader.

Chairman

I wish to ask about the Garda station in Cobh.

Mr. McGrath

Is it in the Chairm an's constituency?

Chairman

It is.

Mr. J. Mitchell

Deputy Stanton has asked a question about that.

Chairman

I commend whoever was responsible for the design of the new Garda station on the quays in Cobh. The fact that it is shaped like a ship complements its surroundings and highlights local history. I understand that this terrific job is almost finished and will be handed over to the Garda in the near future. Will the Office of Public Works be able to hand the station over before the end of April so we can announce its completion? Why is Cobh mentioned among the proposed acquisitions for the Garda programme in 2002?

Mr. Cullen

The station is virtually complete and that is the reason for the hangover in some of the payments that will be made in the current year. The architect involved is Deirdre Houlihan of the Office of Public Works and the Deputy's remarks are very much appreciated. The station is almost ready to be opened.

Chairman

I have been watching it closely. A proposed acquisition quote was mentioned also.

Mr. Cullen

I do not have the exact information with me, but I think that is to provide car parking space.

Chairman

I will not bother to ask about Mallow and Fermoy flood relief.

Mr. Cullen

You can, Chairman. That programme, along with many others, is being studied at the moment and we are proceeding in consultation. The relevant officials and people from my office have formed a group which is working away. This highlights the fact that there is a long lead-in time on these matters, but members can take comfort from the bigger projects. We are on site in Kilkenny, we have finished the public exhibition in Clonmel and the Cregclare public display is being exhibited. Members have a lot of confidence in——

Chairman

Are studies being done of models in Fermoy and Mallow?

Mr. Cullen

The consultants will be appointed, when we get to the point, to build the actual models. That is an essential part of ensuring that the effect of intervention is not negative elsewhere. All schemes are designed to ensure that and, unfortunately, it takes a lot of time to gather, assemble and model that information.

Chairman

Deputy McGrath, you can now go back to Westmeath.

Mr. McGrath

Now that we have finished with Cork we can move on to the broader issues.

Generally speaking, the Office of Public Works does a good job and that is recognised in many quarters. There is a general feeling that sometimes jobs drag on for an awfully long time and that it takes a long time to make decisions, particularly new ones. That is my one criticism of the Office of Public Works.

A few questions arise from what the Minister of State says and the first that jumps out concerns his references to rental properties in Dublin. He says that €30 per square foot is being paid for office accommodation and he goes on to say that the average price in rural areas is €18 to €20 per square foot. Perhaps the Minister of State will take note that in Mullingar a property developer developing state-of-the-art offices served by fibre optic cable and mains gas is offering space for £9 per square foot, which is about €11. There is another developer who has the same facilities and someone moving into part of his building shortly will pay £7 per square foot, or about €9. Surely, when the costs of decentralisation are being looked at, those developments should be taken into account. Another property developer in Mullingar, who may be known to the Minister of State, is offering office accommodation at €20 per square foot.

The Office of Public Works has a responsibility to look at where it can get the best value for taxpayers' money. We are all taxpayers and we have to get the best value for our money. The Minister of State should be moving to more accommodation outside Dublin since he knows that in prime provincial locations top-class accommodation can be found which is a lot cheaper than in the city, which has the facilities that are needed and which saves the taxpayer lots of money.

The Garda station in my parish, which is on the list, is an example of one that is run down. It is on a one acre prime site and a local developer has made offers to the Department saying he will build a Garda station to meet its requirements in return for the land, offering extra money if it is needed. That would allow for the provision of state-of-the-art accommodation for the Garda, the clean up of an old site, value for money and an injection of life into a rural area. Old Garda stations were often well located and a small townhouse development or local authority housing development would add much to many villages. It would take away the cost factor that is being built into the proposals before us. The Minister of State could produce a template of what was required in a rural Garda station and offer the development for tender, while having his architects oversee what is done so that there is a sensitive treatment of the environment. The station I am thinking of, which I know well as my father served in it, is an old, stone building and it could be beautifully preserved. We need to be imaginative in looking at what we can do. The proposal is something of a public private partnership, but is a new way of doing things which would save the taxpayers money.

Regarding the use of taxpayers' money, I see the consultancy figures have gone up by 19%. I get a bee in my bonnet about this every year when I see the levels of consultancy, particularly in the Department of Finance which last year spent millions in this regard. Consultants come in for all sorts of things, but surely there is a lot of expertise in the Office of Public Works. Why is so much additional consultancy needed? What do the consultants do and what is the main thrust of what they are asked to do?

I note and welcome the expenditure on the Irish College in Rome and the Irish College in Paris. I see that the restoration of a church in Waterford has crept in at the end of the list. How was that chosen from among all the churches around the country? Were there applications from various churches to be included for restoration, or is this a special one? How did the Minister of State pick this one and what was the process behind that decision? It would be very interesting for those of us who do not live in Waterford to know how that church came to the top of the pile.

I very often see plant and machinery for drainage works lying idle in certain locations for quite a long time, getting rusty and looking terrible. Are inventories made?

Mr. Cullen

They are not ours.

Mr. McGrath

Are the ones along side the Royal Canal not the Office of Public Works's?

Mr. Cullen

They are not ours.

Mr. McGrath

Who owns them? Are they owned by Waterways Ireland?

Mr. Cullen

We got Waterways Ireland to do the work.

Mr. McGrath

That is the crowd that objects to planning permission as well.

Mr. Cullen

There you are. It is not us I am happy to say. You will never find Office of Public Works machinery lying idle. We are too busy.

Mr. McGrath

It must be the other crowd so. Generally, when you have plant and machinery you need to have it superbly managed to get the best value for money out of major capital. These machines cost a lot and unless you are getting the best value out of them you should be hiring in. It is an awful waste to have them lying around.

The Minister of State said that by the summer a gym will be in place and our chairman is looking forward to using it again. No doubt he will.

Mr. Cullen

No doubt he will and there is no doubt about the Deputy's prospects.

Mr. McGrath

We will keep our fingers crossed and hope for the best.

Mr. Cullen

He has my support anyway. He will reciprocate.

Mr. McGrath

Can I tell Senator Cassidy that?

When I was not too long in the House the Evening Herald or the Evening Press telephoned me to say there was talk about putting in a gym here. The headline was “Paul McGrath to get a gym in the Dáil”. The paper was obviously using the fact that I share a name with a very famous sportsman. That was about ten years ago and nothing has happened since. I am involved with the Committee on Members’ Interests and we have not seen any plans for the gym nor has the matter been brought to our attention. Has there been consultation with groups in the House?

Mr. Cullen

There has been endless consultation.

Mr. McGrath

Perhaps it was among the Whips.

Mr. Cullen

The Whips, Members' services and the Committee on Procedure and Privileges consulted on the matter.

Mr. McGrath

That committee, a sub-committee of which I am a member, will meet later this evening. The matter has not been drawn to our attention. We need to make sure this is done properly in order that the facility will be used. There are many reasons for housing it in the main complex rather than an outbuilding. I hope this is done. The Minister of State also mentioned a crèche. Has this been discussed with Members?

Mr. Cullen

We had a commission to address this matter and it was us, rather than the Office of Public Works, who caused the lengthy delay. Planning permission was received and all other requirements were met long ago, but there have been difficulties with Members and Oireachtas staff.

I thank Deputy McGrath for his questions which are to the point. He has taken a great interest in my Department in recent years. I could not agree more with his opening remarks on value for money. Certainly, the Department and the Office of Public Works have travelled an immeasurable distance down the road of seeking value for money.

The Deputy also made a valid point about decentralisation. As he is well aware, the decision on this matter does not rest with me, but with the Government. Nevertheless, because of the enormous number of requests for property we were receiving from Departments and State agencies, the Department decided about two and a half years ago that, unless absolutely essential, these properties would not be located in the centre of Dublin. Instead, we encouraged the various bodies and Departments to move accommodation elsewhere. This policy, which is outside the much larger decentralisation programme that we very much support, has had some success.

Despite the whole range of positive aspects of decentralisation - it is good for business, cost effective to the State and offers good value for money - we acted purely on the basis of property considerations. We want to implement decentralisation and have been doing our level best to encourage State bodies and Departments not to take accommodation in Dublin 4, in the area around Leinster House or in other central Dublin locations where everybody wants to be.

The rental figures provided are average figures. Outside Dublin the average is €18 to €20, but it can be as low as the £9 figure quoted by the Deputy, which is about €13.

Mr. McGrath

I quoted a figure of €9.

Mr. Cullen

The figure quoted was in pounds.

Mr. McGrath

There is another figure of €9.

Mr. Cullen

They are facts which I do not dispute. It is possible to find accommodation at that price in other areas which would have huge benefits, some of which Deputy McGrath and the Chairman have enunciated. They include the value which decentralisation would bring to local communities and local economies and the benefits in terms of the lifestyle of the civil servants who would work in these areas as regards such matters as access to schools and safety, both of which have a huge resonance. My Department hopes to be involved in implementing this in the near future and has been involved in promoting decentralisation outside the main programme.

We bought a substantial number of properties in recent years and reduced the balance between rented and owned accommodation. In the past five years, we strategically purchased properties or bought out substantial leases we held. We brought the National Treasury Management Agency into the process to give advice on the costs of continuing to rent certain properties, some of which were design, build and finance, vis-à-vis buying them outright. We have done exceptionally well in terms of the properties we have bought back for the State.

The Deputy will also understand that we need to balance property which we own with rental accommodation. We need flexibility in the portfolio. We have achieved the right balance with slightly more than 70% of the total portfolio owned and 30% rented. As with any good business, we must also keep an eye on market developments to ensure that if good opportunities for property acquisition arise we can form a view as to whether they would be of strategic benefit to the State.

The Deputy's second point with regard to Garda stations on prime sites is also very valid. Disposal of these properties is not our call which perhaps explains some of the delay. The Department of Justice, Equality and Law Reform must decide whether to keep or dispose of a property and produce the property list for carrying out work. My Department might have a view on these matters, but the Department of Justice, Equality and Law Reform is the line Department on whose behalf we act and generally we agree with its decisions.

We cannot do everything overnight. There are opportunities, one of which in my county fits into the bracket to which the Deputy referred. It involves an old Garda station where there was a possibility of selling it to a developer and building a much better station on another site. Given that there are many public procurement procedures which make it necessary to have a transparent process, I wish to ensure that I do not have to appear here at a later date to answer questions about bypassing transparency.

This brings us back to the procurement process which in many cases, notably where larger properties are concerned, requires publication in the EU journal. Therefore, while it takes time, we have been trying to act in accordance with the principle expressed by the Deputy and it is no accident - I assert this with absolute confidence - that my Department has achieved a higher level of ISO accreditation than any other Civil Service Department in the world. Receiving accreditation for, I believe, four of our six business units is a remarkable achievement and one of the major achievements of the past five years. However, I do not take all the credit for it as the Chairman, one of our commissioners and I collectively took this view five years ago when people in the Department may well have thought we were mad and would not achieve this aim. I took the view, however, that if we claim to be as good as the private sector, we must demonstrate and prove it in a way the public understands, and we have achieved this.

The Deputy asked a question about consultancy. The consultancy work refers to the new financial management systems which we brought in experts to implement, rather than report on, as part of the strategic management initiative. I disagree with the Deputy, we are very parsimonious in some respects where consultancy is concerned because the expertise exists in the Department. Nevertheless, the Department has a huge interaction with the private sector in all its disciplines, a combination which brings out the best in us. Flooding is a good example of an area in which we bring in outside expertise to work with us.

The Deputy's question on Christ Church Cathedral was slightly tongue in cheek. I have believed for years that there are numerous important buildings belonging to many of the Churches which they no longer have the capacity to maintain and preserve. These buildings are an important part of our built heritage. However, it is important to make clear that we are not in the business of restoring buildings for the Churches. When the approach was made concerning the property in question, agreement was reached on the basis that it would become a major public facility. This is what the money is being spent on by both the State and the public. The church, which will continue to serve its very small remaining congregation, houses the most important organ in the country which is being restored and refitted by experts brought in for the purpose. It will become a major national location for recitals. Not everything must take place in Dublin.

I have also spoken to my staff in Dublin Castle who form part of an international group which organises concerts featuring foreign performers and the RTE orchestra. The dean was a much more forward-looking man than many of his colleagues. It took four years to put together and was not something that happened overnight.

Mr. J. Mitchell

We should rename it the Martin Luther Cullen concert hall.

Mr. Cullen

I have not requested that my name be put up over the door but as it is a Church of Ireland church, I do not think they would be too happy with a Lutheran name on the door. Future Governments will have to face up to this policy issue. I am glad my Department led the way in regard to this facility. We have also done much on the international front as the references to Rome and Paris indicate. We must remember that there are important aspects of Irish heritage that are not located here.

With regard to plant and machinery, we hire in a lot of machinery and try to keep what we own to a minimum. The machinery we own is used to its greatest capacity on a 24 hour basis. It is disappointing that much of the fantastic work undertaken by this Department during the foot and mouth disease crisis is often forgotten. Office of Public Works staff delivered where it counted. It was Office of Public Works staff who moved in machinery and manpower with the know-how to deal with the issue and they deserve more credit than they got.

We have had planning permission for some time in Kildare House for the gym and crèche. The location was chosen due to its better access. It is not possible to have children in here. At the rear end of the building where Statoil was located there is access on the other side of the square for the proposed crèche which will also have an outdoor area. It has all been agreed and the size of the gym has been enlarged several times. Deputy Mitchell was one of the people who looked at this. We got planning permission about a year or 18 months ago but we could not get into the building. Oireachtas Members and various committees of the Houses had their views about facilities and usage. We are the ones who have been left to pursue it and we have now reached agreement between all parties.

The building we are sitting in today is one of the major achievements during my tenure in the Office of Public Works. This project was presented before each Minister of State in my position for the past 20 years and it was the first project the chairman put to me, almost tongue in cheek, not believing it would happen, but we delivered and won an international award for this building.

Mr. J. Mitchell

I do not want to cast any clouds over the Minister of State's view of his Department but the Office of Public Works is not known for keeping to timetables. I will not even raise the question of budgets.

Mr. Cullen

Would the Deputy like to highlight one?

Mr. J. Mitchell

What was the original deadline for completion of the building in Cobh and is it on time? It is a hallmark of the Government that deadlines are being missed everywhere, not just by the Office of Public Works. Promises are being made but no deadlines are being met. With regard to projects over the past three years, what were the original deadlines and what were the actual completion dates? If there is a disparity between the two, will the Minister of State account for it.

I do not mind that we are working on the church in Waterford, but it is stated in the Constitution that we should not endow any religion, and that is construed to mean that we cannot help churches in this situation. Dublin City Council has been maintaining the park attached to St. Patrick's Cathedral and the one at Christchurch Cathedral. This started many years ago when I was Lord Mayor of Dublin, although it strains the Constitution to do so. We ought to look at this question because in other countries churches are supported. I do not have a problem with it as long as we do so reasonably and fairly across the board and use them for purposes that are not contradicting their sacred nature.

Mr. Cullen

I am very happy to answer the Deputy. I am delighted to have the opportunity to come before the committee to say that in my area of responsibility every project has been brought in, not alone on time, but on budget as well. That is one of the hallmarks of getting ISO accreditation. Indeed, it is central to it and we would not have got it if we could not demonstrate an ability to finish a job according to deadline. Every project in the past five years was brought in on budget and on time.

Mr. J. Mitchell

Does that include the job in Cobh?

Mr. Cullen

I do not have the details in front of me but I will give them to the Deputy.

Mr. J. Mitchell

Is the project in Cobh on time or is it like the gym, in that it has been talked about for years?

Mr. Cullen

The gym was stopped by the Members of the Oireachtas, not by the Office of Public Works.

Mr. J. Mitchell

It was stopped because what was proposed was ludicrous.

Mr. Cullen

No.

Mr. J. Mitchell

I know it inside out. A halfpenny stamp in this building then a penny halfpenny stamp in the other building is far too small. I was to be told what the new version is but was not told. From the beginning the proposals on the gym were ludicrous and the last one I saw was still unrealistic. I do not want to be drawn into criticism of the project, which is good in theory, but I suspect that it will not start in the summer. If I have anything to do with it, it will be sent out to the public sector. Time has overtaken the idea as it stands and we need a different approach to it. Let us move on to the Cobh issue now. Is it on time?

Mr. Cullen

I do not have the information to hand. I did not come in here with a specific brief on Cobh, as the Deputy is well aware, but to my knowledge, it is on time. I will get the current details for the Deputy.

I am surprised by the comments the Deputy made regarding the gym going to the private sector. I do not understand the basis for this argument. I agree with the Deputy's point that the facilities for Members are inadequate. I have just come back from a Parliament building that has swimming pools, gym rooms, living accomodation and rest rooms for members, and I agree with that. The problem here is that there is a political divide between Oireachtas Members on it.

Mr. J. Mitchell

There is no political divide.

Mr. Culllen

It should be supported by all Oireachtas Members and we should go down that road.

Mr. J. Mitchell

I do not want to make the gym the central focus, but it is a case in point that has been delayed for years. It should be commercial because if it is to be viable it will have to be open to more than Members of the Oireachtas.

Mr. Cullen

I agree with the Deputy but that is not an Office of Public Works decision. That is a House decision and the Committee on Procedure and Privileges has to be involved. The difficulty is that there is no agreement on the issue. There is not even agreement on who should use the crèche. I cannot solve those problems. I can build it and install state-of-the-art facilities, but who uses them is a matter for others.

Mr. J. Mitchell

Then it becomes a chicken and egg situation. If it has not been decided who is going to use it, how can it be designed with regard to capacity and so on?

Mr. Cullen

It is not for me to say.

Mr. J. Mitchell

Enough said. I would like to get a report on how the Minister of State has met timetables during his five years in office.

Mr. Cullen

If the committee invites me back, I will prepare a detailed report.

Mr. J. Mitchell

We cannot invite the Minister of State back because an election is due shortly. The Minister of State should send the details to us in writing to justify his claim that deadlines have been met.

Mr. Cullen

I am happy to do that.

Chairman

That concludes the discussion on Vote 10. I thank the Minister of State at the Department of Finance, Deputy Cullen, and his officials at the Office of Public Works, Mr. Murphy, Mr. Benton and others, for attending today. I thank the committee members for the manner in which they conducted the Estimate discussions.

I understand that the Minister of State, Deputy Cullen, will continue until the Minister, Deputy McCreevy, arrives. The Minister will read an opening statement when there is a change of personnel. I wish the chairman, commissioner and other members of the Office of Public Works well and look forward to meeting them in the next Parliament.

Mr. McGrath

Will the chairman still be in place?

Chairman

I hope not. I would prefer to be sitting down there.

Vote 1 - President’s Establishment

Vote 4 - Ordnance Survey.

Vote 7 - Superannuation and Retired Allowances.

Vote 8 - Office of the Comptroller and Auditor General.

Vote 11 - State Laboratory.

Vote 12 - Secret Service.

Vote 15 - Valuation Office.

Vote 16 - Civil Service Commission.

Vote 17 - Office of the Ombudsman.

Chairman

The Minister of State at the Department of Finance, Deputy Cullen, will make theopening statement. The spokespersons can also make statements. We will then proceed to a general discussion on the Estimates. I suggest that we proceed through the Votes in the order outlined in the timetable: Votes 2, 6 and 9 followed by the other Department of Finance group, Votes - Votes 1, 4, 7, 8, 11, 12, 15, 16 and 17. Is that agreed? Agreed.

Mr. Cullen

I apologise on behalf of the Minister for Finance. As Members probably know, he is at a Government meeting and will be here as soon as the meeting concludes. I have been asked to attend on his behalf.

The purpose of my appearance before you today is to introduce the 2002 Estimates for the Department of Finance group of Votes, excluding Vote 10, the Office of Public Works, which was taken by me earlier. The group of Votes which we are considering today comprises 12 Votes amounting to almost €713 million in 2002. Some of the larger Votes included are the Vote for the Office of the Revenue Commissioners, at €287 million; the Vote for superannuation and retired allowances, at €189 million; the Vote for the Department of Finance, at € 118 million; and the Vote for the Houses of the Oireachtas and the European Parliament, at €77 million. The Department of Finance has already provided members of the committee with a background briefing on the Estimates which are before you for approval today. I look forward to having a constructive discussion with the committee and I will be glad to provide any additional information members require.

Before dealing with the Estimates for the individual Votes, I will make a few brief comments on the economy and the public finances. One of the major achievements of the Government has been to create an economic climate that has helped all aspects of our economy to flourish. We have achieved one of the best economic performances in the world in the past four years. The following figures demonstrate this. Taking the years 1998 to 2001 as a whole, the economy has grown, in GDP terms, at an annual average of 9.5%. Our debt-GDP ratio stood at 74% in 1996, before we came into office. At the end of 2001, it stood at about 36%, the second lowest in the EU. With regard to income tax, over the past five years we have made major changes to the benefit of income earners and the economy generally.

We have increased the incentive to work and the reward for work by reducing the overall burden of personal taxation. More than 300,000 jobs have been created and as a result unemployment has fallen from 10.3% to an estimated average of 4% for last year, the lowest yearly unemployment rate since comparable records began. Our economic policies will ensure that today's prosperity will continue to benefit everyone now and in the future. The national development plan provides for an unprecedented public investment of €57 billion while the programme for prosperity and fairness provides increases in net take-home pay of up to 25%, improving real living standards to the maximum extent.

There is no doubt that we are currently living in very uncertain economic times. Budget 2002 was based on a reasonable forecast for GDP growth this year of just under 4%. Obviously, this is much lower than in recent years. However, I am confident that Ireland is well placed to benefit from the upturn in the international economy which is anticipated through this year.

I am proud to say that we have provided the State with good and effective government and our time in office has seen the creation of an economic climate which has helped all areas of our economy to flourish. It is clear there cannot be progress in other areas without the benefit of a strong economy.

The 2002 Revised Estimates for Public Services, published on 28 February 2002, reflect changes in voted expenditure announced by the Minister for Finance in the budget as well as certain other adjustments to voted expenditure that arose thereafter.

On the basis of the Revised Estimates and a provision of €150 million for benchmarking, total net voted expenditure in 2002 will be €28,995 million - €23,379 million current and €5.615 million capital. This represents an increase of 14.4% over the projected outturn for 2001. Since coming into office in June 1997, the Government has provided significant additional resources for key economic and social priorities and for physical infrastructure. It has also provided for long-term sustainability through the creation of the national pensions reserve fund.

I should mention one last topic before I turn to the detail of my Department's Estimate for 2002, the changeover to the euro. The Euro Changeover Board of Ireland, which is under the aegis of my Department, carried out very extensive public information and advertising activities in preparation for the changeover. These activities included a range of materials and supports to meet the needs of low-awareness and special needs groups. The board also made extensive practical preparations in conjunction with a wide range of other organisations.

The changeover itself was implemented smoothly and efficiently. By the end of the first weekend, the bulk of cash transactions were taking place in euro and the changeover was virtually complete within a week. I offer my thanks and congratulations to all those involved, including the public at large, for making it so successful.

I now turn to two of the principal Votes in the Finance group of Estimates, starting with the Vote for my Department. The Estimate for my Department for 2002 amounts to €118 million, a net increase of €24 million over the 2001 outturn. The following are the major programme expenditures in my Department's Estimate for 2002. A provision of €8 million is made in subhead N - the change management fund. This is a central resource to assist all Departments to carry through the strategic management initiative, which is the basis for the reform of the public service.

A total of €19.4 million is provided to meet expenditure on EU co-funded programmes, including O1 - peace programme, O2 - Northern Ireland INTERREG, P - other community initiatives, J1 - Structural Funds technical assistance and other costs, and J2 - technical assistance costs of regional assemblies. In addition to the co-funded programmes, €1.5 million is provided in subhead O3 - Special EU Programmes Body.

A sum of €15.4 million is provided to support the transition of the Irish public service to an information society. This includes €10.4 million under subhead Q in respect of information society expenditure. The information society fund was introduced in 2000 as a central fund supporting projects identified under the Government's action plan for the information society. For 2002, a total of €55.9 million has been distributed across a number of Departments to support major projects in the areas of e-government, e-commerce, telecommunications infrastructure and Internet access and awareness initiatives. The €10.4 million allocated to my Department's Vote is a central fund focusing primarily on e-government projects. A further €5 million is provided under subhead S - e-procurement initiative - towards the first stage of the implementation of e-procurement in the Irish public sector.

An amount of €3.3 million for child care is included in subhead R - Civil Service child care initiative - which will fund the building of crèches for the children of people who work in Departments.

A sum of € 9.9 million is being provided under subhead E - Ordnance Survey Ireland, grant-in-aid. OSI was established as a body corporate under the Ordnance Survey Ireland Act, 2001, with effect from March 2002. An Exchequer contribution will continue to be paid to OSI, based on a service level agreement, as provided for under the 2001 legislation.

The net Estimate for the Office of the Revenue Commissioners is €286.8 million. This figure represents an increase of €28 million, or 11% on the 2001 outturn. The bulk of the Estimate, over €230 million, is for pay and allowances for more than 6,500 staff. Deputies may recall that the Minister for Finance approved substantial increases in the number of staff in the Revenue Commissioners, the cost of which is fully reflected in the Estimate.

The Revenue Commissioners have continued to make significant progress in putting their new organisational structure in place. The need for structural change was endorsed by the Department of Finance review of revenue which followed the Public Accounts Committee inquiry into DIRT and is a central component of Revenue's statement of strategy for 2001-03, which was approved by the Minister for Finance last year. The most recent advance has been the establishment of a new prosecutions division with a clear mandate to secure an increase in the number of convictions for serious cases of revenue fraud and tax evasion.

The programme of organisational change is designed to further strengthen Revenue's ability to collect taxes and duties in a fair and efficient manner. It will serve to consolidate the improvements that we have seen in recent years to the organisation's capacity for high quality client-oriented service, as well as enhancing the effectiveness of response to areas of non-compliance.

Also included in the 2002 Estimate is a provision for the Revenue on-line service - ROS. Since its inception in September 2002, ROS has provided Revenue's customers with a safe, secure and confidential electronic medium through which they can interact with the Revenue Commissioners. This Internet facility enables business users, including the self-employed and third party agents, to conduct business with the Revenue on-line. This includes the filing of tax returns, calculation and payment of liabilities and accessing their tax details 24 hours a day, seven days a week. The facility is free of charge, user friendly and compatible with all the major platforms that exist today.

The objective of ROS is to enable all Revenue customers to conduct their business electronically at a time and location that suits them best. The benefits of ROS include a speedier, more accurate and secure method of processing tax returns, a reduction in compliance costs and paper handling and an altogether more efficient service.

I commend the Estimates to the committee and thank members for their attention. I will of course endeavour to supply any further information members may require.

Mr. J. Mitchell

I protest at the Minister for Finance's absence from this meeting. I know that he is at a Cabinet meeting but it is the Government that orders business and this is the second time in a row that a Minister has been absent during a committee meeting. The Government has ordered that this meeting take place on a Tuesday morning in the full knowledge that the Minister would not be available to attend. This is not satisfactory. The Minister for Finance attends this committee only once a year to account for how he has run his Department and his absence is a bad example to other Ministers. One of the great gaps in our society which has been highlighted by the DIRT inquiry is in accountability. The Minister for Finance has accepted all the recommendations made by the DIRT inquiry and conceded the question of accountability, yet he is not here today to account for the actions of his Department.

Mr. Cullen

I hope that he will be here shortly.

Mr. J. Mitchell

The meetings should be scheduled for times when the Minister can attend from the beginning. The Minister of State at the Department of Finance, Deputy Cullen, has just read a speech on his behalf. The Minister's absence from this meeting is symptomatic of a poor governmental attitude to the Oireachtas. I do not blame this Government in particular for such behaviour, but it raises the issue of the right of the Oireachtas to achieve full value for public money.

In the budget of 5 December 2001, the Minister for Finance announced a growth in expenditure of 12%. At the end of the year, this figure was revised to 14% by the Department of Finance. Today, it has been revised again to 14.4%. That 14.4% is in addition to a 22% increase in expenditure last year. Compounded, that figure is 39.6%. The Government is presiding over an increase in public expenditure of almost 40% in two years. If the income, or income plus surplus, amounted to 40%, this situation would be tenable, but income rose by only 4% last year. For the first two months of this year, income rose by just under 4%. The Government is presiding over a disastrous crisis which will remain hidden until after the general election. The alarm bells must be ringing, especially in the Department of Finance. The situation appears to be completely out of control.

A growth rate of 39.6%, as predicted by the Government, will probably be exceeded by the end of 2002, if the first two months are anything to go by. An alarming situation is developing. It should be remembered that in 1977 it only took one outrageous manifesto to destroy the economy for 20 years. By working together through the Tallaght strategy and the Celtic tiger, we were eventually able to produce a very strong, sound economy, which we still have, but here we go again. The reality of a 39% increase is that such money cannot be spent efficiently if it is to be spent so quickly. Instead of output, the only return for this will be inflation and waste. Value for money will go out the door.

With this growth in expenditure, we should see tangible improvements in society, but as a regular visitor to hospitals over the past few years, I have seen terrible problems, and the situation is becoming worse. I have seen overworked, depressed doctors and nurses and strained patients who cannot cope with delays on waiting lists. Widows are living on £96 per week and people earning €130 per week are being refused medical cards. Some 20% of children leaving primary school have learning difficulties because there is a lack of resources to help them. There are people surviving on a disability allowance of €90 who cannot afford to get a haircut or buy a pint. Disabled people are being denied personal assistants and therefore lead restricted lives. Where has the money gone? Where is it going? I am beginning to wonder whether there is a direct pipeline to the Cayman Islands.

The Minister should feel the disillusionment of people on the street. Where are our new motorways? Only 33 km of motorway has been built during the lifetime of the Government. There is traffic gridlock everywhere. Are deadlines or timetables ever met?

Mr. Cullen

The Deputy should not make inaccurate statements. His statements are without fact.

Mr. J. Mitchell

Will the Minister tell me when is the deadline for Luas? How many years behind schedule is that project? Will he say how many years behind schedule the Kildare bypass is? If the Minister wants a long list, I will give him one. The reality is that, under the Government, deadlines are not met. The Government is spending money like it is going out of fashion. The problem is we will end up at the end of this year spending 39.6% more than at the beginning of last year. I would not mind if at the end of this we had the Bertie bowl, motorways and hospitals, with children getting assessments and schools repaired, but none of those things is done.

This is astonishing and it is time to start ringing the alarm bells about the economy. My party held a press conference yesterday in which we cited the great strengths of the economy and our pride in the achievements since 1985 when we got inflation down to 4%, achieved a balance of trade surplus for the first time, reformed the State sector and deregulated the airline industry. Inflation remained below 4% from 1986, when Garret FitzGerald's Government brought it down, until this Government came to power. The Government has allowed inflation to climb as high as 7%. That is not my greatest complaint as I concede that in the circumstances that was not too bad.

In 1997, 1998 and 1999 the Government managed the economy very well. Expenditure grew significantly and there were improvements, but income grew even more in those three years so we were able to drastically reduce our debt. Living standards were improved. In 2000, 2001 and 2002, however, all caution has been thrown to the wind. Let us assume the Government sticks to its targets for this year. By the end of 2002 we will have allowed expenditure to grow by €7.9 billion more than income has grown over these three years. To put this figure in context, 1% of €7.9 billion is €79 million. These are mega figures, yet there is nothing to show for the increased expenditure.

This is more than a party political debate, although there is such a dimension to it. I thought we had learned the lessons of profligate spending in the 1970s and early 1980s. I thought we matured as a democracy in 1987 when Deputy Dukes proposed the Tallaght strategy and Ray MacSharry accepted and delivered upon it. In the past three years, however, it has all gone wrong. It is a cardinal rule that if you continue to spend, the only way to pay for it is with more taxes and we know where that leads. We will depart the virtuous circle brought about by the Tallaght strategy in 1987 and re-enter the vicious circle of higher taxes and cutbacks of the period from 1977. This would depress an economy that has been the envy of the world up to recent months. Do not think it cannot happen. Just look at the state of Argentina, once a very rich country. Look what happened to Portugal for centuries - it has only begun to recover in the past decade. This is what is being risked by the reckless spending policies of the Government.

The Government tried to put the blame on foot and mouth disease and on the events of 11 September. These factors undoubtedly depressed levels of income but they had little or no impact on spending. Spending is the Government's fault alone. Spending is out of control and so is the Government.

Mr. S. Ryan

We have been told by various Ministers that it is the objective of the Government to create a climate that helps all aspects of our economy. That is not the way thing have worked out. We must accept that we are a rich country. The figures indicate we are in the top ten in the world in terms of economic performance. Yet if you meet people on the street they are very annoyed and disturbed by the way the country has been allowed to develop by the Government.

Many of the more vulnerable people in our society have not benefited from the so-called Celtic tiger. We are told there is an abundance of money, and there have been plenty of plans and consultants reports, yet projects are not meeting their time goals in many areas. One issue that particularly affects people in the Dublin area is the scandalous state of public transport. People have great difficulty getting to work. One arm of Government says that particular areas will be targeted for redevelopment, housing and infrastructural improvements, yet at the same time another is not providing the necessary finance to ensure that people retain a quality of life and that if they move to the suburbs they can get to work in the morning without having to rise at ridiculous hours to beat traffic jams.

Child care facilities are non-existent. The public transport system requires upgrading in areas of my constituency such as Balbriggan, Skerries and Donabate where people literally cannot squeeze onto the trains in the morning. I spoke to a girl last week who was in early pregnancy and had fainted on two occasions in the previous fortnight while standing on trains. We are told by Iarnród Éireann that finance is required to provide for major infrastructural improvements between Connolly Station and Pearse Street Station. At the same time messages are sent out that the Government is providing finance for infrastructure. However, the budget figures highlight that the necessary finance is not available. That is a major defect.

It is suggested that we will look after the quality of people's lives and allow everyone to share the benefits of the Celtic tiger. What about people queuing to get into hospitals which are the subject of an industrial dispute because the staff have had enough? They have listened to promises over the years, but nothing has happened.

We all know of the problem in the housing market and that young couples cannot afford to buy a home. How will we provide affordable housing for young people? The Department of the Environment and Local Government has put restrictions in place whereby someone earning over £25,000 is not eligible for a shared ownership scheme or an affordable loan to buy a house. The Department of the Environment and Local Government suggests that the Department of Finance has imposed restrictions regarding those who cannot get a loan from a building society or a financial institution. These people may be earning €25,000, €28,000 or €30,000 individually or as couples and they may be over the limit. Where are they to go? They are in limbo. If they are lucky, they may be paying £200 a week in rent. It makes me smile to hear the Minister and the Minister of State extolling the benefits of the Celtic tiger and how we are going to share those with everyone. However, that is not the reality. People are disillusioned——

Mr. Cullen

They are disillusioned with the Labour Party and Fine Gael. There is not much credibility in the Deputy's comments. That suits the Government and me fine.

Mr. S. Ryan

If the Minister of State does not like what he is being told——

Mr. Cullen

I do not mind it at all.

Mr. S. Ryan

The Minister of State will hear the real story when he meets the people. The real story is that the past four years has been a period of lost opportunity. At a time of unprecedented growth, the Government has failed the country and it will get that message clearly in a few weeks.

Vote 2 - Houses of the Oireachtas and the European Parliament.

Vote 6 - Office of the Minister for Finance.

Vote 9 - Office of the Revenue Commissioners.

Chairman

We will now proceed to Votes 2, 6 and 9.

Mr. J. Mitchell

I have no questions.

Chairman

Has Deputy Ryan any questions?

Mr. S. Ryan

I will not get the answers that would be appropriate in the context of the opportunities which existed for the Government.

Chairman

We will wait until the other officials come in before proceeding to the other Votes.

Mr. J. Mitchell

I have no questions.

Chairman

Does the Minister of State wish to make a closing statement?

Mr. Cullen

I thank Deputies for their comments. The matters raised are highly political and they are entitled to their points of view. We will await the public's view. I have every confidence in what the Government has done. Everyone can see the enormous benefits to the economy and, thankfully, that is recognised by the public.

Chairman

I thank the Minister of State and his officials. I also thank members for the manner in which they conducted this discussion.