I am pleased to be here today, Bloomsday, to introduce the 2009 Revised Estimate and annual output statement for the Office of Public Works. On the last such occasion, 12 March 2008, I was on the opposite side of the table at the meeting of the select committee.
In line with the changing economic circumstances the gross allocation for the Office of Public Works will see a 27% decrease to €496 million comparing the Revised Estimates Volume for 2008 and 2009, respectively. Thus the OPW is making its full contribution to necessary reductions in Government expenditure, while maintaining core services. Committee members have a copy of the OPW annual output statement for 2009 and a summary brief on the subheads and allocations included in the OPW Vote this year. I hope these will prove useful when considering last year's output against allocation and the 2009 spending proposals.
With regard to the 2009 Estimate, although the gross allocation to Vote 10 amounts to €496 million, this does not reflect the full range of activities of the Office of Public Works. As well as expenditure under Vote 10, the OPW acts as an agent and incurs expenditure on behalf of a range of Departments and Government agencies. Funding for this expenditure is provided for the OPW by the sponsoring Department or agency and appears as a charge on the account of the client organisation. The cost of providing these services in 2008 was more than €117 million, the main areas of expenditure being major capital works, maintenance works, the purchase of school sites and buildings and leasing of accommodation. For example, the OPW's project management services provide specialist procurement and technical advice for the Government and various Departments on major projects such as Campus Stadium Ireland, the new Lansdowne Road stadium, the National Conference Centre and the redevelopment of the Mountjoy Prison site. These do not appear as expenditure items in the Vote but the OPW provides a valuable contribution to the overall process.
The reduced allocation for the Office of Public Works in 2009 reflects the overall Government priorities in leading the country and managing the economy through difficult times. The challenge for all Departments and Offices is to focus on their primary roles and ensure they can provide the optimum service for the public for the resources employed. I welcome the opportunity to demonstrate to the committee the value for money and premium service provided by the OPW. Its chairman and his staff have grasped the opportunity to seek maximum efficiencies and savings in carrying out their functions, while developing a greater focus on the primary responsibilities of the office.
I would like to outline some of the management and organisation measures implemented, before commenting on the programmes of work to be funded from the 2009 Vote 10 allocation. The Office of Public Works is first and foremost a service organisation. Our customers are the public, Departments and Government offices and the Government. Therefore, customer service is paramount. The acquisition and maintenance of ISO accreditation for each of the business units are priorities. All our services are being benchmarked against national and international best practice in the private sector and other public organisations. One example is the significant notional profit shown by the office's architectural service when notional income is measured against expenditure. This has recently been reinforced by a value for money report on the engineering service where a cost benefit analysis of the service proved very positive.
On the property side, a draft value for money report by independent consultants concluded that OPW negotiated rents compared favourably with market rents. The report suggested that, in effect, the OPW average rental rate approximated to the market rate for suburban space, even though many OPW properties are located in city and urban centres. A constant challenge for the office is the management of rental space for Departments. The annual allocation in Vote 10 for rents, rates, etc., in 2009 is €130.3 million. The office currently has a vacancy rate of only 1% of the portfolio, the minimum necessary to facilitate the efficient management of the portfolio.
The utilisation and rationalisation of space in office accommodation provided for Departments is a challenge for the office and will be all the more critical with the roll-out of decentralised accommodation in the coming months and years. Economies of space and cost, particularly in the Dublin area, will be a primary responsibility of the property management function of the office and the OPW is aware of the importance and scale of the task, particularly in the current economic climate. As part of that ongoing exercise, it is planned to surrender more than 10,600 sq. m of space in Dublin and Galway before the end of the financial year, with a reduction of more than €4 million in annual costs.
The committee will also be aware of the successful programme of surplus property disposals in recent years undertaken by the office generating in excess of €575 million in value to the Exchequer. Project management and property maintenance functions within the office have also continued to develop and refine construction cost norms for the wide range of building types for which it is responsible. Generally, the standard costs are below the industry norms for similar type buildings, and will continue to be benchmarked against best practice in the industry. As part of that ongoing process, the office is committed to fixed-price contracts for major construction projects and to framework contracts under the new conditions of engagement for the provision of professional and technical services.
I am confident the contract and procurement reforms will enhance the management and delivery of all such contracts by eliminating the scope for price variation and extras on major contracts in the future. Further inherent benefits that will accrue from that system of contracts will be greater clarity in planning, scheduling, timing and delivery of projects, while increasing accountability in the achievement of targets and goals and ultimately ensuring better value for money for the taxpayer — a key performance indicator for the future. Fixed-price contracts will also become the norm for major flood relief contracts, and is the basis on which the recently placed Fermoy flood relief project will proceed.
Apart from the major projects undertaken by the office, a huge staple of its activities is the provision of building maintenance and upkeep services. Recent improvements in that area have seen a move towards measured-term contracts for those services again providing enhanced value for money for the client and ultimately the public. In the area of procurement, the OPW has recently assumed responsibility for the newly established national procurement policy and operations unit. The unit will drive a programme of reform in the area of procurement aiming to provide a comprehensive shared service to Departments and other public bodies in this area. The immediate aim will be to extend the services currently provided for other public service organisations such as the HSE, while actively seeking opportunities to co-operate with our counterparts in the North, where possible. The scope of savings could be significant, and will focus on the provision of a wide range of services on a more centralised basis.
I now turn to the sub-programmes, as set out in the annual output statement. The first programme, decentralisation, is part of the economic infrastructure priority in the national development plan, and has a gross budget of €57 million. Decentralisation has provided the OPW with one of its greatest recent challenges. The office needs to continue to carry out its full range of activities — including delivery of the accommodation requirements for the decentralisation programme — while at the same time planning for its own move to Trim, Claremorris and Kanturk. At this point, we have advance offices functioning in both Trim and Claremorris. The fit-out of the Trim headquarters building is well advanced, and we plan to move there during the third quarter of the year.
Advance decentralised accommodation is now in place at 21 locations nationwide. While staffing numbers vary from town to town, there is now a significant presence in each of those locations. The construction and fit-out of the accommodation programme is proceeding in line with priorities set out by the decentralisation implementation group, and is provided for under subhead E, with a budget of €52 million for 2009. In 2008 work was completed and buildings occupied in Athlone, Killarney, Newcastle West, Na Forbacha, Department of Community, Rural and Gaeltacht Affairs, and Tipperary Town, the Private Security Authority.
I am pleased to say that 2009 will see further openings at new facilities in Clonakilty, Wexford, Newbridge, Buncrana and Trim is now under way. Subject to final approval, further contracts are planned in a number of the following locations: Roscommon, Tipperary, Charlestown, the Curragh and Claremorris and the midlands bundle at Carlow, Portlaoise and Mullingar. Part of the economic infrastructure priority of the NDP is the Government sites and buildings subprogramme. The function of the subprogramme is to respond to the accommodation provision needs of Departments, while continuing to achieve best use of State property assets through a balance of ownership, leasing and disposal and to maintain and upkeep the State property portfolio.
A number of individual projects and ongoing programmes will be managed in 2009 as part of the project development and management aspect of the programme under subhead E. Major works will advance for several clients in 2009, namely, the Department of Social and Family Affairs at Buncrana and Kings Inns and the Department of Transport at Dundalk and Leeson Lane, Dublin. Both projects will be completed in 2010. Other clients are the Department of Education and Science with a project in Sligo and the probation and welfare section of the Department of Justice, Equality and Law Reform with projects in Blanchardstown and Ashtowngate, Dublin. The latter is in respect of the Garda Síochána.
Due to the increase in numbers on the live register, 2009 will see an acceleration in the provision of additional accommodation for the Department of Social and Family Affairs local office network. The increase in customers and staff is putting extreme pressure on the local office accommodation. Additional resources have been assigned to provide for capital works in 2009 to assist the Department. As part of this, accommodation is to be provided in Balbriggan, Swords, Cavan, Killarney, Ballina and Mallow and refurbishment work. In many cases, the provision of additional office space is also planned for at least 11 other locations. The fit-out of the new Dublin north city local office at Kings Inns, Parnell Street, will be completed in 2009.
A sum of €42 million is provided under subhead F.1 in 2009 for property maintenance tasks, which will be carried out to schedule and to the satisfaction of the client. Facilities management services are currently being delivered at Dublin Castle conference centre, Farmleigh, Áras an Uachtaráin and the Department of Education and Science, Marlborough Street, Castletown House and Kilkenny Castle.
The third sub-programme in the output statement is flood risk management, for which the capital allocation falls under the community infrastructure priority in the national development plan, NDP. It has a gross budget of €67 million on Vote 10, subheads G and H.1 to H.3, inclusive. The function of the programme is to advise the Government on flood risk management and flood risk management policy, develop detailed programmes and measures to implement the recommendations of the report of the flood policy review group, deliver on flood risk management work programmes and projects and maintain an effective programme of maintenance of river courses drained under the provisions of the Arterial Drainage Acts.
A budget of €43 million was provided for the flood relief capital works programme in 2009. Major flood relief schemes will be advanced to construction stage at Fermoy north, Mallow south, Mornington, Enniscorthy and Templemore and detailed design development is also under way for further stages at Clonmel north and east, Ennis lower and Fermoy south. In addition, flood relief schemes have been brought to statutory public exhibition at Enniscorthy and Templemore. A current budget of €18.1 million is provided in subhead H.3 for the arterial drainage maintenance programme to maintain a scheduled programme of maintenance of river courses drained under the Arterial Drainage Acts. In this context, the River Lee catchment area study has been on exhibition in Cork City Hall.
The OPW also has responsibility for the purchase of Garda sites and improvement works at Garda stations under the social infrastructure priority. This forms part of the justice programme and, in conjunction with the Garda Síochána, priority works will be carried out in 2009 for the Ballyshannon traffic corps and the Garda stations in Carlow, Ballymote, Blanchardstown, Buncranna, Craughwell, Delvin, Finglas, Mooncoin, Kilmainham, Ronanstown and Clonmany. Refurbishment and provision of enhanced Garda facilities to existing stations are due on site this year in Kilkenny, Cavan, Blarney, Wexford and Henry Street, Limerick.
The culture and built heritage sub-programmes are also part of the social infrastructure priority. The combined allocation for these programmes in 2009 is €75 million, which will allow for the payment of certain grants, improvement works at cultural institutions and the management of heritage services. Improvement works at the National Gallery, the Irish Museum of Modern Art and at Collins Barracks on behalf of the National Museum of Ireland will occur in 2009. The culture sub-programme also provides for grants, totalling €6 million, for Dublin Zoo, Glasnevin Cemetery and the Louvain Institute. Following the postponement of major works at Leinster House, a number of minor improvement works will take place during the summer recess, including the restoration of Leinster Lawn.
The heritage sub-programme has a gross budget of €63 million. The function of the programme is to cater for the conservation of heritage sites, deliver a premium visitor experience and promote the education of visitors on the significant historic aspects of national heritage sites. Heritage services will continue to manage in excess of 700 sites, catering for up to 3 million visitors annually, and protect site fabric from deterioration and damage by a continuing programme of planned maintenance, adopting best architectural and conservation principles. The OPW will manage and prioritise a works programme, partly in conjunction with the Department of the Environment, Heritage and Local Government, to include works at the following: Botanic Gardens; the Phoenix Park; the site of the Battle of the Boyne; the Pearse Museum, St. Enda's Park; Heywood Gardens; the Rock of Cashel; Nenagh Castle; Boyle Abbey; Castletown; and other heritage buildings within the State property portfolio such as the Four Courts complex and Áras an Uachtaráin.
The final sub-programme of the OPW Vote in 2009 is the universal access sub-programme which is part of the social inclusion programme and will see ongoing and new works on State-owned buildings to provide a disability-friendly environment for the public. The committee should be aware that the disability-friendly environment sub-programme does not represent the full extent of works taking place to make public buildings accessible to all. All major construction projects undertaken by the office ensure the best access facilities are included in the design solutions of all works, despite not accounting for them on a separate basis.
The committee can be assured that the State property portfolio is being properly and prudently cared for and managed. I compliment the chairman and staff of the OPW on meeting the many challenges presented to them. I am confident they will continue to provide an efficient and effective service under the comprehensive brief in their charge.
