With the permission of the committee I will ask Deputy Chris Andrews to substitute for me as Chair of the meeting. Is that agreed? Agreed.
Deputy Chris Andrews took the Chair.
Finance Act 2004 (Section 91) (Deferred Surrender to the Central Fund) Order 2010: Motion.
The purpose of today's meeting is to consider a motion referred by the Dáil in regard to the draft order on capital carryover 2010, the Finance Act 2004 (Section 91) (Deferred Surrender to the Central Fund) Order 2010.
I welcome the Minister of State at the Department of Finance, Deputy Martin Mansergh, and his officials and thank them for attending and assisting our consideration of the motion. A briefing note was provided by the Department. If we adhere to a reasonably strict schedule the Minister of State will address the committee, after which each of the Opposition spokespersons can respond. We can then have an open discussion. Is that agreed? Agreed.
I have only got an overview. Is there a note dealing with each specific carryover or is there just a generic note?
A note was circulated, a copy of which can be provided.
I have one but there is no detail on the individual Votes.
The Minister of State can address that point.
At the outset I would like to say that, despite the difficult budgetary circumstances over the past number of years, we have maintained a significant public capital programme. In 2009 we provided €7.334 billion on capital and in 2010 we will provide a further €6.429 billion, while we will provide €39 billion over the period to 2016. This will enable us to continue to build up our key infrastructure stock so that we are best positioned to face the economic challenges ahead.
The ministerial order before the committee is a technical instrument and its purpose is to allow the Dáil to approve formally the expenditure by Departments and agencies in the current financial year of capital moneys carried over from the previous year. The capital carryover facility forms an integral part of the five-year rolling multi-annual capital envelopes introduced in 2004. The multi-annual system is designed to improve the efficiency and effectiveness of the management by Departments and agencies of capital programmes and projects. The carryover facility means that moneys which would have been lost to the capital programmes and projects concerned under the annual system of allocating capital can now be made available for spending on programme priorities in the subsequent year. The introduction of the multi-annual capital investment system has been a major positive factor in the roll-out of the capital programme. Apart from allowing that resources that would otherwise be unspent by a Department are now made available for that Department in the following year, the multi-annual capital system has given greater medium-term financial security to Departments and implementing agencies. This in turn has facilitated better medium-term planning of programmes and projects.
The Exchequer and Audit Departments Act 1866 generally requires the surrender of unspent Exchequer moneys to the Central Fund at the end of each financial year. However, section 91 of the Finance Act 2004, which gives legal effect to capital carryover, allows the carryover of unspent Voted Exchequer capital to the following year of up to 10% of capital by Vote, by deferring this surrender requirement, subject to certain conditions. I suppose this is a progression from what one might call Gladstonian public finance.
Among those conditions are that the amounts of capital carried over by Vote be specified in the annual Appropriation Act of the year from which the carryover is proposed. The actual decision in principle on the amounts of carryover by Vote are therefore determined in the Appropriation Act. The Dáil again has the opportunity to endorse the amounts in its decision on the Revised Estimates Volume which shows the capital carryover amounts separately in the relevant Votes.
The carryover amounts provided for in the Appropriation Act are required to be confirmed in an order to be made by the Minister for Finance by 31 March of the following year after approval of the order by the Dáil to allow expenditure to take place. The order sets out the amounts by subhead consistent with the amount by Vote specified in the Appropriation Act. Capital carryover within a Vote does not have to be spent on the same subhead or programme where the saving occurred. It may be spent on a different programme depending on progress and priorities.
The 2010 draft order sets out the subheads or programmes under which Departments and agencies propose to spend in 2010 the capital carryover amounts specified by Vote in the Appropriation Act 2009. The total amount proposed in the draft order for 2010 is €125.717 million, which amounts to 1.7% of the 2009 provisional outturn. This compares with a capital carryover figure of €128.453 million in 2009, which is about 1.4% of the 2008 provisional outturn as published in the 2009 Revised Estimates Volume.
The total 2010 gross Exchequer capital provision allocated in budget 2010 amounts to €6.429 billion. The capital carryover of €125.717 million will bring the total Exchequer capital available for spending in 2010 to over €6.554 billion.
The main priority areas for spending of the capital carryover of €125.717 million into 2010 as set out in the draft order are as follows: €79 million will be spent by the Department of Education and Science; €72 million on school buildings and €7 million on ICT; more than €20 million will be spent by the OPW for new works; the Department of Communications, Energy and Natural Resources is allocating more than €15 million for its ICT programme, and energy research; the Department of Enterprise, Trade and Employment is allocating €6.4 million for industry grants; the Department of the Environment, Heritage and Local Government is proposing to allocate €3.2 million to the carbon fund; and the Department of Defence will be spending €1 million on buildings.
Departments and agencies have delegated responsibility to manage their capital programmes and projects. The availability of these capital carryover amounts in 2010 will assist them within this framework in tackling economic and social infrastructural priorities in their areas. I commend the order to the select committee.
With the greatest respect, if this is supposed to be an exercise in transparency I give it a poor D rating. That we have been presented with a list of capital sums without any information as to the project concerned, the reason the projects were not delivered in the year in question, whether it was a question of cost overruns that are being carried forward, what projects have been lost, may fulfil some letter of some obscure law, but it does not shed any light on the efficiency, effectiveness or value of our capital programme. It is pointless bringing us in here to approve a 10% carryover when we do not know any of the background as to the reason the projects were delayed or whether the projects delayed continue to be worth pursuing. It appears that the Department of Education and Science had a large capital carryover. That is surprising, given that Department probably has the most standardised projects, they are not big lumpy projects where one could get the timing wrong. Instead they are a heap of many minor projects, relatively speaking, where one would expect the flow to be fairly easy to project and that it would be delivered on schedule.
This is probably the first debate of the 2010 cycle of Estimates and if the Department of Finance has not learned anything from all the debates here in the past concerning the desire of members to have more meaningful papers presented to enable us get an understanding of what it is we are rubber-stamping, I despair of financial accountability in that Department. If we are actually being asked to vote for something serious, a list of figures, as presented, is meaningless. Perhaps we are not being asked to vote for anything and maybe it is not serious.
We are not being asked to vote.
No. What are we here for? Why are we not outside having a coffee or lunch? Is this a meaningful procedure or is it not? It appears to me that it is totally meaningless. We are getting a list of figures. For example, if the Minister of State said in regard to the flood relief programme — which is of intense interest in my constituency where there is a series of flood problems — that he had got the first nine through the hoop and had hoped to have certain projects up to the gate by the end of December but there had been slippage for specific problems, then we could say that was a meaningful explanation on what had gone wrong. I am sure the Minister of State will be able to provide that information in connection with his responsibilities. We are being asked also to vet the failures of the Department of Education and Science to spend on time. I have no objection to the procedure, capital envelopes are right and the ability to carryover is right because there will always be unforeseen circumstances. If we are part of the process of vetting this work programme we should be given more information than is presented.
I ask the Minister of State not to come back to the Estimates debate for 2010, which will probably be voted on in April and June, with the same old format as in the past which is designed more to conceal than reveal. We get multiple details on what was spent on, for example, telephones but no real appreciation of how the money is linked to the delivery of the programme and what it cost to deliver certain projects.
I recall the 1980s when we did not have two cents to rub together, decent expenditure budgets were presented to the House where one could examine the FÁS budget, what was being delivered at what cost and whether the projects were priorities, the progression from different activities and the performance levels. We have gone backwards in the space of 20 years in terms of the quality of presentations to the Oireachtas. I am afraid I am like a long-playing record but, at least, we have a new Chairman to hear it.
I have a saving on equipment over the years.
Exactly. Sadly it is not making any impact. Perhaps the Acting Chairman would take up the cudgels on my behalf in his new found role.
Yes.
There is no particular secret about any of the changes being made. Fuller explanations can be given, Department by Department. Perhaps I will take up Deputy Bruton's offer and by way of illustration explain the savings in the Office of Public Works or the money not expended. There was a saving of €4.7 million on the purchase of sites and buildings, which had mainly to do with the postponement of most of the decentralisation programme to further review in 2011. There was a €22.2 million saving on new works, alterations and additions and they occurred due to some projects not proceeding as quickly as planned for a variety of reasons and competitive tender prices were received across a range of programmes and projects. What I was particularly interested in was the saving of €6.5 million, or money not spent on flood risk management. These were due to late commencement of works on the Fermoy flood relief scheme, due to the need to retender under a fixed price contract, which has to do with value for money considerations. The high level of objections to the Enniscorthy scheme as originally proposed when it went on public consultation has resulted in delays in getting any construction work started and delays in placing some contracts and the strategic information development programme. This was offset to a small degree by nearly €2 million grant for refurbishment works and a grant to the Leuven Institute of €1.3 million. The other buildings where there is ongoing refurbishment work are the Irish College in Rome, the Irish College in Paris, the Mariner's Church, which is meant to be a maritime museum in Dún Laoghaire, which people are anxious to have re-opened and the ongoing Glasnevin Cemetery restoration project.
This is the area I know best and have used it by way of illustration of the sort of thing involved. However, if there is any other Department that the Deputies would like me to go through——
That should be routinely presented to Deputies against the background of the existing programme. We should be able to view what is happening, what is being taken off and what is being added. I do not know whether we are giving sanction for the investment in the Leuven Institute or the Irish colleges. Is that what we are being asked to do?
The work has been ongoing for several years.
We should be presented with what is happening to the programme that has given rise to this shortfall. It should not be a matter of luck that the Minister of State is able to do it on €20 million when there is €105 that we do not know about.
I would be interested in the Minister of State's comments on two very parochial concerns, namely, the flood relief on the Clontarf seafront, works to prevent further flooding on the seafront and the flood relief on the Wad catchment, Donnycarney. I know the Minister of State has visited those sites. If he is not in a position to reply, will he provide a note for me in due course?
I do not have the details off the top of my head, but I will happily do that. We are due to make an announcement at the end of this week on the first tranche of minor flood relief works for this year. There have been a host of applications, which we are processing, particularly since last November and December. The applications that were easiest to approve quickly are going first, but we will be making a couple of announcements on that front during the course of the year.
Deputy Bruton mention the Clontarf seafront, but that sounds to me like coastal defences that the OPW took from the Department of the Environment, Heritage and Local Government at the beginning of January last year.
It is between the Department and the OPW. They are laying a water main and the OPW is doing the flood defence.
I will write to the Deputy on both matters.
I wish the Acting Chairman well in his new role. I hope it will continue.
I hope he is not called away.
I like the way the Acting Chairman allows proper interaction.
Deputy Bruton has covered the broader point in terms of the way things are presented. In terms of the detail, the total is 1.7% of the 2009 provisional outturn, but within each of the individual programmes for the OPW, what is the total voted expenditure? What is the percentage amount that is being carried over? There are six individual programmes listed under the various Votes 10, 25, 26, 30, 34 and 36. What percentage of their actual expenditure——
I do not have a calculator and I am not a human calculator. I can give the Deputy the figures in order to work out the percentages. The total 2009 revenue under seven different headings was effectively €203 million and the savings——
Will the Minister of State set out the figures for Vote 10, Vote 25, Vote 26, Vote 30, Vote 34 and Vote 36?
Is the Deputy talking about the OPW or——
I am referring to each of the headings.
I see. I read out the figures for the OPW. Does the Deputy want the percentage for each Department?
The Minister of State referred to 1.7% of the overall expenditure, but I want to see the breakdown for individual Departments. For instance, the Minister of State mentioned a figure of €22 million——
By my rough calculation that would be about 15% in the case of the OPW.
In the case of the Department of the Environment, Heritage and Local Government, it is a much smaller amount.
That is much smaller.
In the case of the Department of Education and Science it was €72 million.
That is about 10%.
The other large one was for the Department of Communications, Energy and Natural Resources.
That was in the range of 12% or 13%.
What about the Department of Enterprise, Trade and Employment?
That was just over 1%.
In respect of headline items, the Minister of State referred to the OPW.
Will the Deputy go through it Department by Department please?
The Minister has already covered the Department of Finance and the OPW.
The figure for the Department of Education and Science is €72 million of an underspend. Will he indicate the specific school building to which this money applied and the reason for a €72 million underspend in a capital programme?
In the Department of Communications, Energy and Natural Resource there was an allocation of €14.2 million for an ICT programme. What does that relate to and why is there a carryover? That seems a significant amount of money for an ICT programme. In the Department of Enterprise, Trade and Employment, there is an allocation of €5 million for IDA grants to industry and SFADCo, Shannon Development, of €1.4 million. Why were those grants not spent? Were they not drawn down in 2009, or were they unspent? The Minister of State is effectively presenting bulk figures and the devil is always in the detail.
For starters, let us go through the budget for the Department of Education and Science. There was an overspend on school ICT of €12.5 million, there was also an overspend of nearly €6 million on second level school building grants. The only shortfall of any significance was for building equipment and furnishing of national schools, a deficit figure of almost €94 million. In part, this is explained by new fixed price contracts being bedded down and cheaper tender prices, but the bulk of the unspent allocation is being carried over. One will find concerning anything that relates to construction that sometimes it is possible to go faster than one anticipated while at other times progress is slower.
Where does that €94 million sit in the context of the national school building capital programme? There are many schools in Limerick in that category. Was it simply that the money was not allocated?
If the Deputy listened carefully, I said it was done under a new contract system for public works which is now being used throughout the public sector. That new system is a better safeguard regarding value for money but its implementation and bedding down may have caused some delay. Its introduction led to some teething problems in the external construction industry, in other words, tenderers had to get used to a new system. The other point is that tenders obtained for the programme yielded a reduction of 30% compared with prices at the height of the construction boom.
I refer to two further items, the €14.2 million spend on ICT in the Department of Communications, Energy and Natural Resources, and in the Department of Enterprise, Trade and Employment, a €5 million spend for the IDA and SFADCo.
Is the Deputy talking about ICT for schools?
No, the figure concerns the Department of Communications, Energy and Natural Resources. Perhaps the Minister of State might deal also with ICT for schools as he brought up the subject.
An excess of €12.5 million formed part of the distribution of €22 million in primary ICT grants as part of the "Smart schools equals smart economy" report which was the new action plan for integrating ICT in schools. That went ahead of schedule.
Surely with an underspend of €7 million the schools programme is behind schedule.
An extra €12.5 million was spent so it is not behind in that respect.
Where does the €7 million underspend on ICT come from?
I did not say there was an underspend of €7 million. Are we talking about the Department of Education and Science?
If one looks at the spend for ICT in the Department of Education and Science there is a figure of €7 million.
I am talking about subhead B18. Extra money is going into ICT as part of the carryover which will come to €79 million. As far as last year is concerned, a quarter as much again was spent as was originally provided for.
Extra amounts were provided for ICT but there was still an underspend of €7 million.
That is not the case under the schools information and communication technology activities.
The B18 subhead for ICT has a €7 million underspend, a carryover.
I ask the Minister of State to clarify whether this is the departmental figure or the figure for schools ICT?
That is extra money for next year. It is not related to an underspend last year. What is carried over does not necessarily come from the same source as the underspend. It is possible to have an overspend under a heading and yet provide extra money from the carryover for that particular heading if it is a priority. Therefore, there was no underspend of €7 million last year.
The Minister of State will probably have to provide an ABC version for me. If there is a carryover of €7 million from subhead B18 which is ICT €7 million——
No, it is from the general carryover into ICT. It does not come from there.
Is there a deficit of information here? There is a carryover from different sources into different headings and yet there is no indication as to where there was an underspend in 2009.
Yes, there is. I detailed this when I read out the spend.
We should have been provided with that type of detailed information. It is important to have that kind of detail circulated to committee members because we are speaking at cross purposes. If we had that level of clarification, even at this point, it would be useful. When the Minister of State comes before the committee to read the explanatory memorandum the point is to tease out different issues. We are on this side of the fence and are speaking on a subject without having full knowledge of the facts. It would be worthwhile if we were given details of where the underspends were last year and to which programmes the transfers have gone this year.
I gave members the details on the underspend for the Department of Education and Science. Do they wish me to move on to the industry figures?
We should be provided with a greater breakdown of detail in the future.
I take the Deputy's point. It is a policy consideration.
We do not want merely to be rubber stamps.
I understand and respect that. If I were in the Deputy's position I would take the same attitude. We shall discuss grants for the Department of Enterprise, Trade and Employment. Again, I shall mention only the significant savings. There was a €5 million saving for IDA Ireland. This happens frequently. It is due to the demand-led nature of IDA Ireland's grants to industry and also to a delay in the start up of the National Institute of Bio-processing Research and Development, NIBRT. The other item was almost €1.5 million savings due to the demand-led nature of the INTERREG programme.
Does that figure include E2 and SFADCo?
It does not include E2.
Was the €1.4 million transferred from an underspend under another heading?
An extra €1.4 million will go into SFADCo. That is similar to the other point the Deputy raised. The carryover does not necessarily come from an underspend under the specific subheading but in many cases is distributed differently.
The Minister of State has answered my general point. Even at this stage it is unfair to expect members to comment on figures without having the full facts. We still do not have a full account of the underspends in the 2009 capital programming. We know the subheadings and where they will go this year but even now I impress upon the Minister of State to give us a detailed breakdown of the underspends last year and the transfers into the various headings for this year.
I do not have a problem in giving the Deputy the information he requires. It puts more detail on the public record. Perhaps we might discuss modalities but we are not talking about State secrets.
I thank the Minister of State.
With regard to the carryover percentages, in 2008 there was 1.4% of the provisional outturn and in 2009 the figure was 1.7%. What about the three years prior to that? What percentages were involved relative to carryover?
They are not wildly different.
In 2008 the figure was 1.4% and in 2009 it was 1.7%. What was it in 2007?
It was €126 million for 2007, which was about 1%, and €159 million in 2006. The largest was in 2005 at €289 million.
What percentages were they for 2005 and 2006?
I do not have the calculations off the top of my head. It was about 1.5% for 2005. We can supply the Deputy with the exact details from 2005 to the present.
Those carryover amounts seem similar for 2008 and 2009, at €125 million and €128 million.
The Department of Finance and other Departments try to budget as accurately as they can. It is impossible to get it down to the finest detail. One does not necessarily want to encourage a situation where Departments are frantically trying to spend money to beat the 1 December deadline. One would not always get the best value for money by using that system, which is what operated previously. A certain carryover provides flexibility. As I know from the OPW negotiations with the Department of Finance, the carryover will be taken into account in determining the allocation.
It would make much more sense if more detail was provided on where the money is coming from for the projects.
I take the Deputy's point and I do not see why more detail could not be supplied.
Flood relief for Strand Road in Sutton is a big issue. There is a plan to build a wall there to prevent flooding along that stretch. Does the Minister of State have any update on that?
I do not have any such information off the top of my head, but I will communicate it to the Deputy when I have it.
That would be perfect.
I thank the Minister of State and his officials for attending.