Thursday, 23 February 2006

Ceisteanna (47)

Breeda Moynihan-Cronin

Ceist:

17 Ms B. Moynihan-Cronin asked the Minister for Defence his plans to seek repayment from Irish banks for the cost of providing aerial surveillance by the Air Corps; the estimated annual cost accruing to the State from providing this service to banks; and if he will make a statement on the matter. [7178/06]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Defence)

The total cost in respect of the provision by the Defence Forces of assistance to the Garda Síochána in protecting movements of cash for the years 2000 to 2004 — the figures for 2005 are currently being collated — was as follows:

Year

2000

2001

2002

2003

2004

Total number of escorts

2,285

2,488

2,516

2,335

2,425

Cost of Escorts

€5.7m

€6.57m

€6.87m

€6.5m

€7.5m

Pay accounts for about 54% of the total costs of providing cash escorts. The non-pay costs include security duty allowance, subsistence, transport and aerial surveillance costs. The breakdown of these costs, on average is as follows: security duty allowance — 7%; subsistence — 8%; transport — 28%; aerial surveillance — 3%.

An annual contribution of €2.86 million has been paid by the banks to my Department in respect of the provision of cash escorts. This figure was set by the Department of Finance in the 1995 budget and had not been altered since. The contribution from the banks was designed to part-cover the total costs to the State of providing cash escorts. At that time, the contribution covered approximately 72% of the total cost arising to the Defence Forces. Based on annual costings by the Department, the relative level of the contribution had fallen in real terms over the years to the situation where it was only covering 43% of the total costs.

As the Deputy may be aware, I had a number of discussions with the Irish Bankers' Federation, IBF, in relation to this matter last year, with a view to increasing the level of contribution by the banks in respect of the costs incurred by the Department in the provision of cash escorts. Following detailed and intensive discussions between officials of the IBF, the member banks and the Department, a detailed formal agreement was signed on 11 May 2005.

This agreement, which is for a five year period, provides that the banks will pay the total actual costs incurred by the Defence Forces in the provision of cash escorts. Costs in respect of each 12 month period to end-December, will be paid the following year on or before 1 June. This is to allow for the compilation of returns from the brigades and allocation of costs following the year-end. The first payment under the new system will be paid in June 2006.

I have, at the banks' request, agreed to defer the first payment to that date to meet the banks' budgeting and accounting timeframe. In return for my agreement to this deferral, a transitional payment of €1 million, payable before end 2005, was negotiated as part of the overall agreement. Therefore, in 2005 the banks made their annual payment of €2.86 million plus the additional €1 million making a total contribution of €3.86 million. The costs for the banks in any future year will be determined by the actual costs incurred by the Defence Forces in the provision of the cash escorts in the previous year and thus are not available at this time. The payments by the banks will be paid directly to my Department.

We have now agreed a very open and transparent system for agreeing the costs in respect of the Defence Forces and this should stand the test of time. The agreement resolves the issue of the banks' contribution in respect of cash escort costs for the foreseeable future.