Written Answers Nos. 124-132
124. Deputy Bernard J. Durkan asked the Minister for Public Expenditure and Reform the extent to which insurance and procurement costs will be adjusted in order to maximise benefit to the Exchequer in the context of budgetary savings required in the coming year; the extent of the achievement in these areas in each of the past four years to date; and if he will make a statement on the matter. [43781/12]
Amharc ar fhreagraI fully agree that Departments and Offices should do all in their power to contain and reduce all administrative costs including both insurance and procurement costs. This is in keeping with Government’s overall reform and efficiency agenda. In light of the need to accelerate the reform agenda, my Department published the Public Service Reform Plan in November 2011. This plan identified procurement reform as a key instrument that can assist the public service to deliver services in an efficient manner.
The reform plan includes specific measures to ensure that:
1. aggregated procurement arrangements are utilised across the public service;
2. public bodies have appropriately trained staff to implement reform and to ensure the State is getting value for money; and
3. greater emphasis will be placed on analysing what the State purchases in order to assess other savings that can be made through more efficient procurement methods.
Since its establishment in 2009, the National Procurement Service (NPS) has put in place a number of national arrangements designed to secure better value for money from leveraging the public service’s buying power in relation to a range of goods and services that are commonly purchased across the public service. These national arrangements have benefits that include: cash savings; administrative savings from reduced duplication of tendering; greater purchasing expertise; improved consistency; and enhanced service levels. In some instances the take up of the NPS arrangements has been low. In order to increase the usage of the NPS arrangements and thereby secure best value for money, the Government decided that it should be mandatory for public service bodies to use specified national procurement arrangements.
The NPS has reported estimated procurement savings to the end of 2012 under its frameworks of €127m, comprising of €14m in 2010 and a further €35m in 2011 and projected savings of €78m for 2012. In addition the NPS e-Tenders website generates estimated administrative savings of on average €10m per annum. A breakdown of these procurement savings is not readily available by sector. The NPS has established a Working Group to develop the saving methodologies and reporting of procurement savings in the future.
Circular 06/12 implements the Government decision by making it a mandatory requirement that public service bodies avail of specified national arrangements put in place by the NPS. The list of categories subject to national procurement arrangements includes: electricity; natural gas; stationery and office supplies; paper; ICT consumables; managed print services; print media advertising; and, motor vehicles. These national arrangements will secure best value for money and facilitate contracting authorities to deliver services within their budgetary constraints.
The purpose of Circular 6/12 is to enable the State to do more with less by aggregating procurement to secure better value for money. While a number of the categories of goods and services mandated under the Circular are suited to single supplier national arrangements, it should not be taken that single supplier frameworks are to be accepted as the norm. The greater use, where appropriate, of multi-supplier frameworks can address local supplier issues while also ensuring ongoing cost competitiveness of the framework itself. Such multi-supplier frameworks may also offer SMEs the opportunity to participate in national level contracts, thereby offering valuable reference work when competing for public procurement contracts in other jurisdictions.
It is estimated that €9 billion is spent by public bodies annually on the public procurement of supplies and services. This is a very significant portion of overall spending and it is essential that the Public Service is achieving maximum value for money and operational efficiency in its approach to public procurement. It is for this reason that public procurement is one of the major pillars of key strategic importance under the Government’s Public Service Reform Plan.
In order to ensure that the necessary elements are in place to implement these ambitious reforms, my Department engaged Accenture to undertake a capacity and capability review of the central procurement function to identify the actions required to realise substantial savings in public procurement in the short and medium term. Of the estimated €9 billion annual spend on public procurement of supplies and services, there is a procurement addressable spend of approximately €7 billion. The review estimates that implementation of its recommendations, over a three-year period, could yield potential annual savings in the range of €249 million to €637 million, depending on the approach taken. The final report on this review is available on my Department’s website.
Following the review, proposals were recently submitted to Government. These proposals represent a new consolidated and integrated approach to public procurement that includes:
- integrating procurement policy, strategy and operations in one office through the establishment of a National Procurement Office (under the aegis of my Department) which will be headed by a Chief Procurement Officer, this position was recently advertised;
- strengthening spend analytics and data management;
- examining the specifications set out for goods and services;
- evaluating demand levels to assess how demand (volume) can be reduced; and,
- strengthening vendor and category management.
These proposals have now been agreed by Government.
These reforms will lead to reductions in the cost of goods and services; better procurement services at lower cost; introduction of technical standardisation; greater attention to contract management and better problem resolution; greater levels of professionalism among staff responsible for procurement; and better performance management of the central procurement function.
125. Deputy Michael Healy-Rae asked the Minister for Jobs; Enterprise and Innovation the way that he can stand over a situation whereby €69 million, which was earmarked for job creation here, was not actually spent on job creation. [43576/12]
Amharc ar fhreagraThe Department and its Agencies are extremely diligent and careful in their management and allocation of taxpayer monies in the support of different enterprise objective. The drawdown of exchequer monies through the Enterprise Development Agencies of my Department is based on commitments made in a given year and projected draw-downs against those commitments in the year in question. It must be remembered that drawdown of exchequer financial support by companies or other bodies (e.g. Competency Centres) is demand-led and can only take place if the company or body in question has progressed a given project in line with the agreement entered into with the State at the time of the financial commitment.
Due to this demand-led nature of grant payments and issues relating to the timing of expenditure, the bulk of an allocation is often drawn down in the last quarter of the year. It is expected therefore, that the snapshot figure referred to in the Question, will not be reflected in the end of year figure. One example is the new Microfinance Scheme that I launched on 27 September, which is now open for business and will have an associated Exchequer expenditure of €10m before year end.
In addition, there are other timing issues around finalising legal agreements with the private sector when setting up funds, for example under the Innovation Fund initiative, which means that while drawdown will take place, it may be pushed back by some months, thereby showing up as an “underspend” in a particular accounting period.
Despite the very difficult domestic and external economic environment, we are beginning to see the positive impact of the Government’s policies. 2011 saw an increase of 6,000 jobs in IDA-supported companies, compared with net losses of 15,000 jobs between 2008 and 2010. So far this year, the IDA has announced investments with the potential to create more than 6,000 further jobs as these projects come on stream. IDA allocation for Capital Grants for the year 2012 is €85m. The IDA has assured me that they will draw down their entire grant allocation before the end of 2012.
Jobs in Enterprise Ireland companies started to grow again in 2011, for the first time in three years. In the first eight months of 2012, a total of 4,669 job commitments over the next three years, linked to Enterprise Ireland approvals to client companies, have been secured. Yesterday, the Kerry Group announced the establishment of an industry-leading Global Technology and Innovation Centre in Ireland. This €100m investment will create 800 jobs over the next four years, as well as 400 jobs in the construction phase, which will be part-funded by my Department through Enterprise Ireland. Job creation is at the core of this Government’s policies and the evidence to date in 2012, despite a challenging external environment, is that it will be a strong year for agency outputs in terms of job creation and exports.
126. Deputy Barry Cowen asked the Minister for Jobs; Enterprise and Innovation the expected total legal costs to be incurred in his Department in 2012; his proposals to reduce these costs; and if he will make a statement on the matter. [44069/12]
Amharc ar fhreagraI can advise the Deputy that, in so far as it is possible to give an estimate at this point of the amount that will be incurred by my Department and its offices by way of legal costs in 2012, this is likely to be in the region of €1m. This is based on current knowledge and does not include, for instance, any legal proceedings that might be instigated between now and year end 2012, any awards of costs in any cases arising, the timing of payments or any alteration in fees further to any references and examination by legal cost accountants, etc.
I should emphasize also that the estimated costs are inclusive of legal costs incurred by the offices under my Department’s aegis, principally the Companies Registration office (CRO), the Office of the Director of Corporate Enforcement (ODCE), the Employment Appeals Tribunal (EAT) and the National Employment Rights Authority (NERA), in the normal conduct of the enforcement, judicial and regulatory functions carried out by those offices.
In responding to the Deputy’s question, a very broad interpretation of the term legal costs has been assumed. The services that make up the estimated total cost cover a very wide range of legal services including the bill of costs in legal cases taken against the Minister/Department, legal settlements, the provision of legal advices across a wide range of issues in the Department/offices, the servicing of documentation e.g. signing of affidavits, the prosecution of cases including court appearances and representation.
My Department seeks, where possible, to minimise legal costs and has adopted a number of measures to achieve this. The Department/offices avails of the services of the Chief State Solicitors office and the Attorney General’s office in terms of the provision of legal advice and in terms of representation of the Department/offices in Court cases. In the case of the ODCE for instance and in line with overall Government policy, the ODCE obtained a reduction of 8% in legal fees. The services of legal cost accountants are availed of where fees demanded appear to be high. Additionally, my Department has recently completed a tendering process for prosecution and civil debt enforcement services in the case of the pursuance of employment rights cases on behalf of individuals which is expected should reduce further the Department’s legal costs in 2013 provided the number of cases to be prosecuted does not increase significantly.
127. Deputy Brendan Griffin asked the Minister for Social Protection her views on a matter regarding defined benefit pension schemes (details supplied); and if she will make a statement on the matter. [43624/12]
Amharc ar fhreagraI am very aware of the serious funding challenge facing pension schemes. It is acknowledged that the fundamental problem is that pensions are significantly more expensive due to increasing life expectancy and lower than expected investment returns which are reflected in increased annuity rates.
The Pensions Regulator suspended the Funding Standard four years ago, following the downturn in the financial market, to give trustees/employers an opportunity to assess the impact on pension funds and to enable them time to develop responses to the challenge. The re-introduction of the Funding Standard was delayed on a number of occasions pending changes to legislation which were designed to help trustees respond to the funding challenges facing pension schemes. Among the measures introduced at that time was provision for Sovereign Annuities. Sovereign Annuity products are now available and it is expected that the range of products will grow over the coming months.
The Funding Standard provides a benchmark against which the “health” of a scheme can be tested. The existence of the Funding Standard itself is not the central issue in relation to whether a scheme is properly funded. Rather the responsibility rests with the employer and the trustees for ensuring that the scheme is properly funded and managed. However, the Funding Standard does provide the regulatory mechanism for ensuring that a scheme can live up to the “promised” level of pension benefits.
The requirement for a risk reserve is also being introduced from 2016, to provide a level of protection for scheme members against future volatility in financial markets. It is accepted that the requirement for a risk reserve presents an added challenge for schemes, however, guidance issued by the regulator identifies options which the scheme can consider in meeting this requirement by 2023. This guidance is being kept under review.
Reference has been made to the easing of the solvency regime in a number of other countries. It should be noted that the solvency regime even after those changes is still more onerous that the current Irish regime. It should be noted that the changes to the Funding Standard are being implemented over the next 11 years, not immediately. This is the longest recovery period generally allowed in any European country.
The Pensions Board recently announced that the timeframe for pension schemes to submit funding proposals has been extended to 30 June 2013. This extension will give schemes additional time to help them address the issues they are facing.
Overall, the changes made to defined benefit schemes are intended to lessen schemes’ exposure to risks and bring increased stability for pension scheme members so that they receive the pension promises in the future.
128. Deputy Bernard J. Durkan asked the Minister for Social Protection if a contributory pension will be issued in the case of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [43531/12]
Amharc ar fhreagraAccording to the records of the Department, the application was disallowed as the person concerned does not have sufficient paid social insurance contributions. This case has been referred to a Social Welfare Inspector to further investigate the employment record and, on receipt of this report, the case will be reviewed and the outcome communicated to the person without delay.
129. Deputy Bernard J. Durkan asked the Minister for Social Protection if and when an application for carer's allowance will issue in the case of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [43533/12]
Amharc ar fhreagraI confirm that the department is in receipt of an application for carer’s allowance from the person in question on 17 September 2012. The medical evidence that was received has been forwarded to the Department’s medical assessor for consideration and the application will be processed as quickly as possible. When a decision is made the person concerned will be notified directly of the outcome. In the meantime, if the person in question has insufficient means to meet her needs she should apply for a means tested supplementary welfare allowance from her local community welfare officer.
130. Deputy John O'Mahony asked the Minister for Social Protection when a person (details supplied) in County Roscommon will receive a decision on their application for illness benefit; and if she will make a statement on the matter. [43538/12]
Amharc ar fhreagraThe Social Welfare Appeals Office has advised me that an appeal by the person concerned was registered in that office on 18 January 2012. It is a statutory requirement of the appeals process that the relevant Departmental papers and comments by or on behalf of the Deciding Officer on the grounds of appeal be sought. These papers were received in the Social Welfare Appeals Office on 6 September 2012 and the case will be referred to an Appeals Officer who will make a summary decision on the appeal based on documentary evidence presented or, if required, hold an oral hearing.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions on social welfare entitlements.
131. Deputy Bernard J. Durkan asked the Minister for Social Protection if and when back to work allowance will be paid in the case of a person (details supplied) in County Kildare; and if she will make a statement on the matter. [43550/12]
Amharc ar fhreagraThe person concerned was requested to contact County Kildare Leader Partnership for an assessment of the viability of his business venture. When the Partnership have provided the assessment a decision will be made on his application for the back to work allowance.
132. Deputy Noel Harrington asked the Minister for Social Protection the position regarding an appeal for invalidity pension in respect of a person (details supplied) in County Cork; and if she will make a statement on the matter. [43552/12]
Amharc ar fhreagraThe Social Welfare Appeals Office has advised me that an appeal by the person concerned was registered in that office on 13 April 2012. It is a statutory requirement of the appeals process that the relevant Departmental papers and comments by or on behalf of the Deciding Officer on the grounds of appeal be sought. These papers were received in the Social Welfare Appeals Office on 25 July 2012 and the case will be referred to an Appeals Officer who will make a summary decision on the appeal based on the documentary evidence presented or, if required, hold an oral hearing.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions on social welfare entitlements.
