The select committee will consider the Revised Estimates for Vote 35 - Army Pensions and Vote 36 - Defence. The Minister will make a brief opening statement to be followed by any comments and questions from members.
Vote 36 - Department of Defence (Revised)
I am pleased to appear before the select committee after the long gap of time since I was last before it dealing with important financial and other issues. Today the committee is considering the 2014 Estimates for Defence and Army Pensions. I intend to give a short opening statement as opposed to a long statement, after which I will be happy to take questions from members. I know that members are generally familiar with the background.
The combined Estimates for Defence and Army pensions for 2014 provides for gross expenditure of €898 million. Of that sum, €677 million will be spent on Defence and €221 million on Army pensions. Over 74% of the Defence Vote goes towards providing for the pay and allowances of 9,500 Permanent Defence Force personnel, 625 civilian employees and 350 civil servants. The remaining allocation provides mainly for the replacement and maintenance of essential equipment and operational costs.
The re-organisation of the Permanent Defence Force which was initiated in July 2012 has been successfully completed. The re-organisation was required to accommodate the PDF strength of 9,500 within a revised two-brigade structure. I am pleased to state the re-organisation has met its intended objectives and will continue to deliver a high level of capability and efficiency within the Defence environment. Targeted recruitment was undertaken in 2013 and will continue in 2014. In total, there was an overall intake of 404 PDF personnel in 2013, comprising 353 general recruits, 34 cadets, nine engine room artificers for the Naval Service; seven Air Corps apprentices, and one medical officer. Members will be pleased to note that it is intended to commence a new recruitment campaign in March 2014. An induction of Air Corps apprentices and Naval Service engine room artificers is also planned during 2014. I think we will have to change that word "artificers" and see if we can invent a term that is from the 21st century as opposed to from the 18th century. We will vigorously engage in that appropriate initiative. Any suggested changes will be welcome.
Despite the difficult economic climate prevailing, the continued application of a prudent approach to equipment purchasing and maintenance programmes has ensured the Defence Forces continue to have access to modern equipment. The costs of procuring two new Naval Service vessels, scheduled for delivery in 2014 and 2015, are being met from the Defence allocation. The first ship floated out in November 2013. I should say it floated back again, otherwise we would all be in trouble. The fitting out of equipment is taking place. Sea trials are scheduled for the first week in February 2014 and the vessel should be ready for handover in the first week of March 2014. The keel laying ceremony for the second ship took place in November 2013 and the work continues apace. It is expected that the new vessel, LE Samuel Beckett, will be formally commissioned into service in April 2014.
Ireland will continue its long-standing commitment to overseas missions. Currently, 412 personnel are serving in 14 different missions throughout the world. These missions embrace a range of activities, including conflict resolution, peacekeeping, humanitarian missions, crisis management and strengthening international security. The two largest contingents are serving with the United Nations Interim Force in Lebanon, UNIFIL, with 210 personnel, and the United Nations Disengagement Observer Force, UNDOF, in the Golan Heights, with 119 personnel.
At home, the Permanent Defence Force will continue to provide an efficient military operational response to both the civil power and civil authorities, as required.
This work is ongoing and will encompass a broad range of diverse activities and services, including explosive ordnance disposal duties, maritime patrol, search and rescue missions and cash in transit escorts.
Following the value for money review of the Reserve Defence Force, a new organisational structure came into effect at the end of March 2013. A revised strength ceiling for the Reserve of 4,069 personnel is now in place. Work is continuing on the implementation of the reorganisation effort and the development of the single force concept. A review of the number of active members of the RDF is being compiled in this context. As part of this process, the criteria for participation in the RDF are also being reviewed and updated and a recruitment plan is being developed. The revised structure has improved access to equipment, expertise and appropriate training for Reserve members. It has also allowed for a significant reduction in the number of PDF personnel required to administer and train the Reserve on a full-time basis. This means we are now using our resources more effectively.
I intend to publish a new White Paper on defence in 2014 and work has commenced in that regard. In support of this, a Green Paper on defence was published in July 2013. The Green Paper has provided a useful consultative basis for the White Paper, which will set out defence policy for the coming years. It is anticipated that the draft White Paper will be submitted to Government for approval later this year. I thank the members of this committee who made submissions in response to the Green Paper, either on their own behalf or on behalf of their parties.
The Defence Vote also makes provision for certain costs related to the Civil Defence. The Civil Defence Board was disestablished and its functions integrated into the Department from January 2013. Civil Defence continues to develop its role of providing supports to front-line emergency services. In 2013, it supported the Garda Síochána in almost 100 searches for missing persons and was actively involved in supporting hundreds of community events across the country. I fully expect that Civil Defence volunteers throughout the country will continue to provide support to both front-line services and local communities in responding to emergencies throughout 2014.
I conclude by referring to the Army pensions Vote and the increasing numbers and costs in that regard. Expenditure from this Vote is primarily non-discretionary and demand-led. Currently, there are some 12,000 pensioners of all categories paid by my Department under the Vote. Reflecting recent public service trends generally, retirements on pension from the Permanent Defence Force more than doubled from 2007 to 2012. During that period, expenditure on military pensions increased by 31%. In recent years, any shortfall arising on the Army pensions Vote provision has been met from payroll and other savings on the Defence Vote. In other words, there has been no extra demand on the Exchequer in respect of the Defence Vote group. An additional sum of €10 million has been provided to meet the anticipated increased expenditure requirements this year.
I commend both Revised Estimates to the committee and look forward to dealing with any questions members wish to raise.
Thank you, Minister. I propose to go through each of the subheads, as before. Under Vote 35, Army pensions, the first subhead is A1, administration - pay. There is a slight reduction under this subhead. Subhead A2 relates to payments by way of pension and gratuity lump sum to former members of the Permanent Defence Force and their dependants. Again, there is a very slight reduction under this subhead. The anticipated number who will receive payments this year is 11,670. Subhead A3 deals with wound and disability pensions, and allowances and gratuities to or in respect of former members of the Defence Forces. There is an allocation of almost €9.5 million under this subhead, which is an increase of 8.7%. Subhead A4 is payments to dependants of veterans of the War of Independence. Clearly, the number in receipt of this payment is reducing year on year. Subhead A5 covers compensation payments. I understand a contingency fund is in place in this regard but is rarely drawn down. Is that correct?
Yes.
The contingency fund is €200,000 but the provisional outturn last year was €6,000, which is quite small. Subhead A6, medical expenses and travelling and incidental expenses, shows a fairly large increase from €38,000 to €100,000. There is no major change in respect of appropriations-in-aid receipts. The data are well presented, with all of the details clearly set out. Do members have any questions or comments on Vote 35? No.
We move on to Vote 36, Department of Defence. Subhead A1 is administration - pay, which has increased from €17.318 million to €17.951 million. Are there any comments on this subhead?
PDFORRA has raised concerns-----
To clarify, this subhead relates to Civil Service salaries and allowances.
Apologies. My question relates to subhead A3.
The increased outturn under subhead A1 is mainly due to the transfer of Civil Defence employees to the Department following disestablishment. Subhead A2 is administration - non-pay, where there is a slight increase. This subhead relates to office equipment, IT and so on. Subhead A3, Permanent Defence Force - pay, shows an increase from €413.39 million to €422.466 million, or just over 2%. Does Deputy Mac Lochlainn wish to comment on this subhead?
Thank you, Chairman. At its conference this year, PDFORRA expressed concerns regarding the numbers of Defence Forces personnel who are in receipt of family income supplement. This raises questions about pay levels within the force. Will the Minister comment on that?
Perhaps the Minister might indicate, if he can, how many personnel are in receipt of that payment?
I do not have the exact figure to hand. The payment of family income supplement is reflective of the particular family circumstances and background of individual personnel. Issues relating to pay in the Defence Forces were addressed in the context of the Haddington Road agreement, the negotiations for which included engagement by the Defence Forces representative bodies. I cannot add a great deal more than that. We are not in a position to deal with pay issues other than as agreed and prescribed under the Haddington Road agreement.
I raised the issue of the 21-year rule with the Minister last year. Members who joined the Defence Forces in the past, when the numbers in force were much larger, had an expectation of long service and possible future promotion. Some of them now find themselves in a position where that will not happen and they have to leave after 21 years, even though they meet all the fitness requirements and so on. I realise that events have moved on but this seems somewhat unfair. Is there any way of addressing it?
Unfortunately, there is not. It is an issue we considered carefully. There has been substantial reorganisation in the Defence Forces, which was necessary to achieve the appropriate numbers of personnel across the range of areas and duties and ensure we did not have numbers at officer or senior officer level beyond what was required.
We must use our resources wisely. The 21-year rule was in place when people joined the Defence Forces and no one was misled into believing that automatic promotions would be forthcoming. Promotions are not automatic and there are rules and regulations relating to them.
It is very important that there should continue to be an age balance across the Defence Forces in order that staff might have the capability to carry out all of their operational duties. There is a need for constant renewal within the Defence Forces. When I became Minister, we were faced with a situation whereby the possibilities for recruiting were limited. That remained the case for a number of years and there was a risk that the strength of the Defence Forces would fall to somewhere in the region of 7,000 to 7,500. The Government made a decision to the effect that the objective strength of the Defence Forces should be 9,500. This was conditional on our using resources wisely and reorganising appropriately, which is what we have done. The consequences of that are that we are in a state of constant renewal. This is in the interest of the Defence Forces themselves and it is also in the public interest.
As members are aware, in excess of 400 young people were recruited to the Defence Forces last year. This renewal only occurs in the context of people retiring either when they reach the prescribed retirement age. It would be quite wrong to create promotions that are not required simply in order to retain people within the Defence Forces. I very much appreciate that many of those who have served the State well as members of the Defence Forces for 21 years would aspire to remain in their positions. The great benefit for them upon ceasing to be members of the Defence Forces is that employment opportunities of the sort that are not always available to the wider public become open to them. I understand that there are those who would wish to stay on longer. However, I cannot change the rules and regulations which are in place in that context.
It would be useful if the Minister could provide details on the numbers who will be obliged to retire as a result of the 21-year rule in the coming period.
That information would be statistically available and I will revert to the Chairman in respect of it.
In the context of what I was saying with regard to the huge importance of both renewal and the decision the Government made in the late autumn of 2011 to maintain the strength of the Defence Forces at 9,500, in 2008, when the financial crisis struck and the economic collapse began, some 556 people were recruited. Their recruitment was based on retirements and the need to bring in replacements. In 2009 only 47 staff were recruited and in 2010 only 45 were recruited. When I became Minister, the overall numbers were falling below 9,000. If there had been no recruitment in 2011, we could have reached the point where the strength of the Defence Forces would have fallen to 8,500. We steadied the ship at an early stage by recruiting 526 staff in 2011. This stabilised matters and brought numbers up well past 9,000. We then recruited 633 further staff in 2012 in order to try to bring numbers up to the objective strength level of 9,500. We solidified the position in this regard by taking on 404 recruits in 2013. This would not have been possible without people retiring on reaching 21 years of service. If the 21-year rule were not in place, we would be faced with greying and aging Defence Forces personnel.
Some 87 officer promotions took place in 2013. A total of 607 enlisted personnel were promoted last year. A further six such personnel were promoted in the period 1 to 14 January. A reasonable number of promotions are, therefore, taking place. These are promotions that are required. We must proceed on the basis of what is necessary in order to maintain operational efficiencies. That is the way in which we are approaching this matter.
I thank the Minister. We will now move to subhead A.4, which relates to allowances. Again, there is a slight reduction under this subhead. Subhead A.5 relates to the Reserve Defence Force, RDF. I note that the provisional outturn for last year was €1.9 million, that spending exceeded this and that a further increase is provided for this year. I presume changes are happening in the context of the RDF.
That is correct. As a result of the reorganisation of the RDF, we have a very clear view - I still have to obtain the final figures - in respect of those who are active members and those who are no longer active. This is a very important issue. I anticipate that I will have final visibility in respect of this matter in a very short period. The likelihood is that we will then be recruiting to the RDF. I cannot provide a final number in this regard but I am of the view that we will bring in an influx of new people who will be committed to the RDF and who will actively engage in training. We have made financial provision in respect of this eventuality.
I take this opportunity to highlight the importance of the naval reserve. The numbers involved are very small but perhaps it might be possible to increase them.
Yes.
Subhead A.6 relates to the pay and allowances of chaplains and officiating clergymen. Again, there is a slight increase under this subhead. Subhead A.7 relates to civilians attached to units in the context of pay, etc., and another increase is included here. Subhead A.8 relates to defensive equipment. The figure in this regard is slightly down on the outturn for last year but the estimate is something similar. I presume the Mowag armoured personnel carriers are being upgraded.
Yes.
Subhead A.9 relates to Air Corps equipment and expenses.
A number of members had the honour of visiting Baldonnel and, in that context, I repeat what I said earlier about the professionalism of Air Corps staff. It makes one very proud when one sees the calibre of people who are representing the country at that level. It is understandable that the Air Corps regularly submits requests for upgrades, new planes and to have older aircraft replaced. Those in charge want to have the best aircraft and equipment to the members of the Air Corps in order that they can do their jobs properly. I tabled a parliamentary question on this matter previously and I would like the Minister to indicate whether there is a biannual budgeting process for the Air Corps or are matters dealt with on a year-by-year basis? How does the process work? What is the position if the Air Corps wants to replace three aircraft that are over 20 years old? People get their cars serviced regularly but eventually they must be replaced. Must aircraft be replaced when they reach a certain age and, if so, how does this fit in with the Government's budgetary process?
Whether one is referring to aeroplanes or helicopters, the crucial issue which arises relates to the need to ensure that they are properly maintained, serviced and checked and are absolutely safe to use. As everyone is aware, the State has limited funds and resources and the question of whether we might, at some point in the future, invest in new aircraft has not really been on the agenda. A reasonable sum of money - on occasion it is substantial - is required to purchase replacement parts for aircraft.
A sum of €8.8 million is provided for the maintenance of aircraft.
In the context of dealing with aircraft equipment and expenses, the priority expenditure for 2014 remains the delivery of the full range of airport and operational services associated with the roles assigned to them by the Government. The operational requirements are outlined in the Defence Forces annual plan that we published for 2014. Major projects currently under way or planned for this year include an overhaul of a CASA engine which will cost approximately €600,000; a continuation of an upgrade programme of on-board software for the AW139 helicopter fleet, the cost of which is also estimated to be approximately €600,000 in 2014; and the commencement of an end-of-life upgrade of the PC-9M simulator projection system, which is estimated to cost approximately €280,000.
In the context of the annual maintenance of aircraft, at some stage an issue could arise where, when maintenance work is being undertaken, the level of expenditure that could be identified as being required to replace parts may give rise to questions about the economic advisability of spending that money as compared to getting some alternative aircraft. That has not occurred to date. None of us can anticipate whether it would. To ensure I am not misunderstood in any way, I point out that it is not in the plans to purchase any new aircraft.
The aircraft perform a variety of functions. The focus in the media is always the use of aircraft by Ministers to attend on Government business abroad but the same aircraft that are used for those purposes are used very often for emergency reasons to provide urgent medical assistance to individuals. They have been used on occasions to assist with regard to Irish nationals in trouble-spots in the world. There is a whole range of uses to which they can be put. The reality is that we are unlikely to be replacing anything in the short term.
The aeromedical helicopter operation is run out of Custume Barracks in Athlone, and we have addressed that previously. That operation has proved to be very successful and it is continuing. In a sense it is a joint venture between ourselves, the Department of Health and the HSE. We are currently carrying out a review of that operation in the context of efficiencies and how it is working. It is not envisaged, in any shape or form, that a service of that nature will not be maintained. That is where matters stand.
There is an obvious issue in this context. If we reach a point where a decision is made, for operational reasons, that there will be a need for new aircraft, the Deputy and I can predict with certainty that instead of focusing on all of the other usages for an aircraft, the only thing the media will focus on is some suggestion that Ministers want a new airplane so that they can go on some sort of junket. No one realises that the only occasions they are used is when there is major public business abroad and when there is a need for Ministers to go from this State and return with efficiency and speed because of all of the other public duties they have to engage in, but that is never the narrative in the media and, on occasions, it is not the narrative from Opposition Deputies. There is no question of us rushing into anything here. The big capital expenditure this year and next is on the new naval vessels.
There seems to be a significant reduction of 20% in the budgetary allocation under this subhead. My question on the aircraft was not answered. Is there a timeframe involved whereby following a period of 20 years an aircraft would need to be replaced?
It is an issue of maintenance, not of age. Many of the parts in the aircraft have been substantially replaced and they are not remotely 20 years old; some of them would be very recent. An annual maintenance is undertaken on all of them. In dealing with the Estimates on this, one cannot be absolutely right in one's predictions because it can vary. A substantial sum can be spent one year and it would need to be considered if such a sum is needed the following year. What arises may also depend on the extent of the usage of the particular aircraft.
We will move on to subhead A.10 - Military Transport. There is a slight increase in the allocations under this subhead. We have the provisional outturn but not the actual outturn for 2013. Moving on to subhead A.11 - Naval Service: Equipment and Expense, we have already discussed some of what is covered under it with regard to the new vessel. Is there an option for a third vessel?
As part of the arrangements for the first two vessels, there was an option for a third vessel. As I understand it, that option is still a possibility. In that context there is an issue with regard to terms of contract, price and when it might be delivered. My focus at present is on the delivery of our first one. It is appropriate that we have called it the Samuel Beckett. It was one of the first decisions confirmed by the Cabinet on the formation of this Government, on foot of a memorandum I brought to Cabinet with regard to the purchase of this vessel. One of the reasons for calling it the Samuel Beckett is that we have been waiting for Godot since March of 2011, but we are currently doing an assessment. I am very conscious of the age of the naval fleet - this is more relevant in regard to ships than in regard to aircraft because of the capacity to replace parts and the manner in which aircraft age - and it is very important that we continue to retain essential capacities around coasts. I am looking at that issue at present but I cannot say any more than that.
I do have a strong view on this but I was asked this question and I will put it to the Minister. I admire Samuel Beckett as much as the next person but why has there been a move from the tradition of naming vessels after Irish female names?
I will take entire responsibility for that. There was a tradition of using Irish female names, substantially the names of mythical Irish females. I gave some thought to this, discussed it with colleagues and we discussed it within the Department. Our naval vessels on occasions visit ports abroad as flagships of this State, engage in events internationally, as we ask other states to engage with us with their vessels, and we have had various examples of that. In the context of the naming of naval ships, I concluded that to ensure when they go abroad the wider global public would see some identity with Ireland and some identity with a figure that is internationally known and respected, we should rethink an approach that has been adopted, effectively since 1922. We have very many literary giants, a disproportionate number compared to the size of the numbers on this island. In those conversations I concluded, having discussed it with other colleagues, that we should name some of our future ships after our major literary figures. We chose the name Samuel Beckett for the first ship and the name James Joyce for the second, although they are not all going to be named after male literary figures.
Should we purchase a third ship, we have a name in mind that I think may be widely welcomed, if we manage to get to a point where we can contract for a third ship. There is no certainly about that at the moment because there are obvious issues about price and identifying the funding possibilities. It is not a matter I have yet discussed with Cabinet colleagues.
I expect the delivery time, should we do so, would probably not be until about 2017. These are issues for the future but I hope it would be seen as a change that is welcome and constructive. I know that whenever change is effected some people appreciate and applaud it and others criticise it but if it draws attention to the fact that we have new, fit-for-purpose ships coming on line to the benefit of our Navy and to the country, it is a welcome event. When we launch this ship we are hoping to have a Beckett-related event on the day, and I would anticipate that all members of this committee will be invited to the naming and the launch.
We look forward to it. We visited the naval stores and the Air Corps and we were impressed with what we saw.
There is a slight reduction in the next subhead, A.12, barrack expenses and engineering equipment. I think we have dealt with that.
There is an increase in subhead A.13 for new building works and maintenance of existing works. We note there is a good deal of work taking place in various barracks including gym refurbishment in Cathal Brugha Barracks, re-roofing in Magee Barracks and so on. The archives are important also.
Subhead A.14 on ordnance, clothing and catering and so on is worthwhile, and I thank the Minister for the interesting detail given in the commentary. Subhead A.15 is communication and information technology. There is a slight decrease in that but it is not a huge amount. Subhead A.16 is military training. There is a slight decrease on last year's Estimate.
Subhead A.17 is travel and freight increases. There is a large increase on the 2013 Estimate. Does the foreign travel element have to do with Lebanon?
Yes.
Subhead A.18 is medical expenses. There is a slight decrease on the 2013 Estimate. It concerns primary care, physiotherapy and so on.
Subhead A.19, on lands, provides for land maintenance costs and additional expenditure. That Estimate has decreased substantially. There is no major change in Subhead A.20, equitation.
Regarding Subhead A.21 on compensation and additional costs, as stated in the commentary, the Department has no control over that substantial increase in the Estimate. Subhead A.22, miscellaneous expenditure, has increased slightly also. It relates to the Ombudsman for the Defence Forces and so on.
Subhead A.23 on costs arising directly from Ireland's participation in the European Union's Common Security and Defence Policy has increased by 20%. Subhead A.24 on Civil Defence has been reduced. Changes have been made in that respect.
There is no change in Subhead A.25 on Irish Red Cross Society grant-in-aid. It is the same as 2013. Subhead B on appropriations-in-aid is down 24% on 2013. The commentary refers to bank escorts, UN receipts, pension levies and so forth.
That concludes the select committee's consideration of the Revised Estimates for Vote 35 - Army Pensions and Vote 36 - Defence. It strikes me that next year we might have two separate sessions because dealing with the Estimates of two Departments requires a long session. The detailed work done by the Departments in producing the Estimates is very interesting and it would be useful to give each Department its own block of time.
I have no difficulty with that.
If that could be agreed it would be a better way to proceed.
I thank the members of the committee for their assistance and co-operation in this morning's session. I will see all of them again this afternoon.
Indeed. The select committee will adjourn until Wednesday, 12 February, when it will resume consideration of the Legal Services Regulation Bill.